Costco Wholesale Corporation (COST) Stock Analysis — Fair Value, Risk & Moat Rating
NMS · Consumer Defensive · Discount Stores
Is Costco Wholesale Corporation a safe investment right now?
Costco Wholesale Corporation's Altman Z-Score of 10.05 places it in the safe zone. Our fair value estimate is $745.60 (Overvalued). Moat rating: 3.4/5 stars.
Could Costco Wholesale Corporation go bankrupt? Altman Z-Score analysis
Z-Score of 10.05 is above 3.0, indicating the company is financially healthy by this metric.
- Below 1.8 — Distress Zone (high bankruptcy risk)
- 1.8 to 3.0 — Gray Zone (elevated uncertainty)
- Above 3.0 — Safe Zone (financially healthy)
What drives COST's Z-Score?
| Component | Formula | Value | Weight | Contribution |
|---|---|---|---|---|
| A · Working Capital / Total Assets | WC / TA | 0.0165 | 1.2 | 0.02 |
| B · Retained Earnings / Total Assets | RE / TA | 0.2938 | 1.4 | 0.41 |
| C · EBIT / Total Assets | EBIT / TA | 0.1423 | 3.3 | 0.47 |
| D · Market Cap / Total Liabilities | MCap / TL | 9.2941 | 0.6 | 5.58 |
| E · Revenue / Total Assets | Rev / TA | 3.5699 | 1.0 | 3.57 |
How has COST's financial health changed over time?
| Year | Z-Score | Zone |
|---|---|---|
| 2022 | 10.44 | Safe |
| 2023 | 10.45 | Safe |
| 2024 | 10.23 | Safe |
| 2025 | 10.05 | Safe |
Source: Calculated from COST's latest 10-K filing on SEC EDGAR.
What is Costco Wholesale Corporation actually worth?
How we calculated this
| Input | Value | Source |
|---|---|---|
| Predicted EPS (α) | $18.64 | Proprietary blend of reported actuals (2Q actual) + analyst consensus, weighted by α |
| Last Year EPS | $18.21 | Annual report (SEC EDGAR) |
| Analyst Consensus EPS (This Year) | $20.46 | 32 analysts consensus |
| Trailing P/E | 52.1x | Current market pricing |
| Fair P/E (β discount) | 40.0x | Trailing PE adjusted by value discount factor β, hard-capped |
| Earnings Trend (γ) | Stable | Directional signal: predicted vs trailing EPS |
Wall Street Reference: Analyst consensus target price is $1,072.16 (32 analysts). This is shown for reference only and is not used in our valuation model.
Source: Earnings data from SEC EDGAR filings. Market data via Yahoo Finance.
Does Costco Wholesale Corporation have a durable competitive advantage?
Moat rating: 3.4/5.
What makes up COST's moat score?
ROIC Stability
ROIC variability over the past decade. Score: 4/5.
Gross Margin Trend
Gross margin trajectory over the past decade. Score: 3/5.
Switching Costs
Estimated customer lock-in based on margin level. Score: 3/5.
How stable is COST's return on invested capital?
| Year | ROIC | Trend |
|---|---|---|
| 2022 | 17.6% | — |
| 2023 | 17.8% | Stable |
| 2024 | 19.5% | Rising |
| 2025 | 19.9% | Stable |
Source: ROIC calculated from SEC EDGAR filings.
Is Costco Wholesale Corporation's dividend safe?
Can Costco Wholesale Corporation afford its dividend?
Payout ratio is 27.0%. FCF covers the dividend 0.6x. 23 consecutive years of payments.
Costco Wholesale Corporation's key financial metrics
| Metric | Latest | 1Y Ago | 3Y Ago | Trend |
|---|---|---|---|---|
| Revenue | $275.2B | $254.5B | $227.0B | Rising |
| Net Income | $8.1B | $7.4B | $5.8B | Rising |
| Free Cash Flow | $7.8B | $6.6B | $3.5B | Rising |
| Gross Margin | 12.8% | 12.6% | 12.2% | Rising |
Recent events that affect our COST analysis
COST earnings report scheduled
Upcoming report. Consensus EPS estimate: $4.95. Revenue estimate: $68.93B. Our current Fair Value: $745.60 — a significant beat or miss could shift this estimate.
COST analyst consensus: 61% bullish (22 of 36 analysts)
3 Strong Buy, 19 Buy, 12 Hold, 2 Sell, 0 Strong Sell. Consensus target: $1072.16 (6.8% upside). Compare with our independent Fair Value: $745.60.
COST filed 8-K (material event)
8-K filings disclose material events — acquisitions, leadership changes, or guidance revisions that may affect valuation. View on SEC EDGAR →
COST filed quarterly report (10-Q)
Quarterly update with interim financials. May signal changes to earnings trajectory and balance sheet health. View on SEC EDGAR →
COST beat EPS estimates by 0.8%
Reported EPS: $4.58 vs estimate $4.54. Earnings strength supports our Fair Value of $745.60 (25.7% below current price).
COST filed 8-K (material event)
8-K filings disclose material events — acquisitions, leadership changes, or guidance revisions that may affect valuation. View on SEC EDGAR →
COST paid $1.3000/share dividend
Dividend Safety Grade: B. Payout ratio: 27.0%.
COST filed 8-K (material event)
8-K filings disclose material events — acquisitions, leadership changes, or guidance revisions that may affect valuation. View on SEC EDGAR →
COST filed quarterly report (10-Q)
Quarterly update with interim financials. May signal changes to earnings trajectory and balance sheet health. View on SEC EDGAR →
COST beat EPS estimates by 5.2%
Reported EPS: $4.50 vs estimate $4.28. Earnings strength supports our Fair Value of $745.60 (25.7% below current price).
COST filed 8-K (material event)
8-K filings disclose material events — acquisitions, leadership changes, or guidance revisions that may affect valuation. View on SEC EDGAR →
COST paid $1.3000/share dividend
Dividend Safety Grade: B. Payout ratio: 27.0%.
COST filed 8-K (material event)
8-K filings disclose material events — acquisitions, leadership changes, or guidance revisions that may affect valuation. View on SEC EDGAR →
COST filed 8-K (material event)
8-K filings disclose material events — acquisitions, leadership changes, or guidance revisions that may affect valuation. View on SEC EDGAR →
COST filed annual report (10-K)
Annual filing with full-year financials. Our Altman Z-Score, Moat, and Fair Value models are derived from this data. View on SEC EDGAR →
COST beat EPS estimates by 1.1%
Reported EPS: $5.87 vs estimate $5.80. Earnings strength supports our Fair Value of $745.60 (25.7% below current price).
COST filed 8-K (material event)
8-K filings disclose material events — acquisitions, leadership changes, or guidance revisions that may affect valuation. View on SEC EDGAR →
COST filed 8-K (material event)
8-K filings disclose material events — acquisitions, leadership changes, or guidance revisions that may affect valuation. View on SEC EDGAR →
COST paid $1.3000/share dividend
Dividend Safety Grade: B. Payout ratio: 27.0%.
COST filed 8-K (material event)
8-K filings disclose material events — acquisitions, leadership changes, or guidance revisions that may affect valuation. View on SEC EDGAR →
COST filed 8-K (material event)
8-K filings disclose material events — acquisitions, leadership changes, or guidance revisions that may affect valuation. View on SEC EDGAR →
COST filed quarterly report (10-Q)
Quarterly update with interim financials. May signal changes to earnings trajectory and balance sheet health. View on SEC EDGAR →
COST beat EPS estimates by 1.2%
Reported EPS: $4.28 vs estimate $4.23. Earnings strength supports our Fair Value of $745.60 (25.7% below current price).
COST filed 8-K (material event)
8-K filings disclose material events — acquisitions, leadership changes, or guidance revisions that may affect valuation. View on SEC EDGAR →
COST paid $1.3000/share dividend
Dividend Safety Grade: B. Payout ratio: 27.0%.
COST filed 8-K (material event)
8-K filings disclose material events — acquisitions, leadership changes, or guidance revisions that may affect valuation. View on SEC EDGAR →
COST filed quarterly report (10-Q)
Quarterly update with interim financials. May signal changes to earnings trajectory and balance sheet health. View on SEC EDGAR →
COST missed EPS estimates by 1.9%
Reported EPS: $4.02 vs estimate $4.10. Our Fair Value of $745.60 may face downward pressure if the trend continues.
COST filed 8-K (material event)
8-K filings disclose material events — acquisitions, leadership changes, or guidance revisions that may affect valuation. View on SEC EDGAR →
COST paid $1.1600/share dividend
Dividend Safety Grade: B. Payout ratio: 27.0%.
COST filed 8-K (material event)
8-K filings disclose material events — acquisitions, leadership changes, or guidance revisions that may affect valuation. View on SEC EDGAR →
COST filed 8-K (material event)
8-K filings disclose material events — acquisitions, leadership changes, or guidance revisions that may affect valuation. View on SEC EDGAR →
Common questions about Costco Wholesale Corporation
What is Costco Wholesale Corporation stock price today?
Costco Wholesale Corporation (COST) stock price is $1003.70 as of the latest market close, traded on the NASDAQ exchange.
What does Costco Wholesale Corporation do?
Costco Wholesale Corporation, together with its subsidiaries, engages in the operation of membership warehouses in the United States, Puerto Rico, Canada, Mexico, Japan, the United Kingdom, Korea, Australia, Taiwan, China, Spain, France, Iceland, New Zealand, and Sweden. It offers merchandise, including sundries, dry groceries, candies, coolers, freezers, deli, liquor, and tobacco; non-food merchandise comprising appliances, small electronics, health and beauty aids, hardware, lawn and garden, sporting goods, tires, toys and seasonal, automotive, stamps, tickets, apparel, furniture, domestics, housewares, special order kiosks, and jewelry; and fresh food, such as meat, produce, service deli, and bakery products. It is also involved in warehouse ancillary operations, which include gasoline, pharmacies, optical, food courts, hearing-aid centers, and tire installation centers.
What is Costco Wholesale Corporation market cap?
Costco Wholesale Corporation has a market capitalization of $445.51B, classifying it as a mega-cap stock in the Consumer Defensive sector.
What sector and industry is COST in?
Costco Wholesale Corporation operates in the Consumer Defensive sector, specifically within the Discount Stores industry. It trades on the NASDAQ under the ticker symbol COST.
Is COST stock overvalued or undervalued?
Based on our valuation model, Costco Wholesale Corporation trades 34.6% above our fair value estimate — potentially overvalued.
- FairValueLabs Fair Value: $745.60
- Current Price: $1003.70
- Valuation Zone: Overvalued
What is COST stock forecast and analyst target price?
Based on 32 Wall Street analysts, the consensus price target for Costco Wholesale Corporation is $1072.16, implying upside of 6.8% from the current price.
- Analyst High Target: $1315.00
- Analyst Low Target: $650.00
Note: Analyst targets are shown for reference and are not used in our valuation model.
Is Costco Wholesale Corporation revenue and earnings growing?
Here are the analyst consensus growth estimates for Costco Wholesale Corporation:
- Revenue growth (current year est.): 8.6%
- EPS growth (current year est.): 12.4%
- Revenue growth (next year est.): 7.7%
- EPS growth (next year est.): 10.0%
What are Costco Wholesale Corporation's key financial metrics?
| Metric | Latest | Trend |
|---|---|---|
| Revenue | $275.2B | Rising |
| Net Income | $8.1B | Rising |
| Free Cash Flow | $7.8B | Rising |
| Gross Margin | 12.8% | Rising |
What is COST's P/E ratio?
The price-to-earnings ratio measures how much investors pay per dollar of earnings:
- Trailing P/E (last 12 months): 52.1x
- Forward P/E (next 12 months est.): 44.7x
- FairValueLabs Fair P/E: 40.0x
How volatile is COST stock?
Costco Wholesale Corporation has a beta of 0.98, meaning it is roughly in line with overall market volatility. A beta above 1.0 indicates higher price swings relative to the S&P 500, while below 1.0 suggests more stability.
How much cash and debt does Costco Wholesale Corporation have?
Costco Wholesale Corporation's balance sheet shows:
- Total Cash: $11.13B
- Total Debt: $10.23B
- Net Cash Position: $898.0M
A positive net cash position means the company holds more cash than debt, reducing financial risk.
What is Costco Wholesale Corporation's free cash flow?
Costco Wholesale Corporation generated $6.69B in trailing twelve-month free cash flow (from $15.01B in operating cash flow). Free cash flow represents the cash available for dividends, buybacks, and debt reduction after all capital expenditures.
Does Costco Wholesale Corporation pay a dividend, and is it safe?
Yes, Costco Wholesale Corporation pays a regular dividend. Here are the key metrics:
- Dividend Yield: 0.5%
- Payout Ratio: 27.0%
- Consecutive Years Paid: 23
- 5-Year Dividend Growth: -15.8%
- FairValueLabs Safety Grade: B
Is Costco Wholesale Corporation at risk of going bankrupt?
Costco Wholesale Corporation's Altman Z-Score is 10.05, placing it in the safe zone (above 3.0) — bankruptcy risk is low. The Z-Score uses five balance sheet ratios to predict bankruptcy probability within two years.
Does Costco Wholesale Corporation have a durable competitive advantage?
Costco Wholesale Corporation scores 3.4/5 stars (Narrow moat) in our moat analysis:
- ROIC Stability: 4/5
- Gross Margin Trend: 3/5
- Switching Costs: 3/5
A score above 3.5 suggests meaningful pricing power and a defensible market position.
What is COST's return on equity (ROE)?
Costco Wholesale Corporation's return on equity is 29.6%. ROE measures how efficiently a company generates profits from shareholder equity. An ROE above 15% is generally considered strong, while below 10% may signal inefficiency.
How do I buy COST stock?
COST shares can be purchased through any brokerage account that provides access to the NASDAQ. Common steps:
- Open an account with a broker (e.g., Fidelity, Schwab, Interactive Brokers)
- Search for ticker symbol COST
- Place a market or limit order for your desired number of shares
This is not investment advice. Always do your own research before buying any stock.
Is COST a value stock or speculative?
FairValueLabs classifies Costco Wholesale Corporation as Value-Speculation. It has some value characteristics but carries elevated risk factors that make it speculative. Extra due diligence is recommended.
Who is the CEO of Costco Wholesale Corporation?
The current CEO of Costco Wholesale Corporation is Mr. Ron M. Vachris.
What is COST's earnings per share (EPS)?
Earnings per share measures the company's profit allocated to each outstanding share:
- Trailing EPS (last 12 months): $19.27
- Forward EPS (next 12 months est.): $22.47
- Analyst consensus EPS (this year): $20.46
- Analyst consensus EPS (next year): $22.51
Other Consumer Defensive companies analyzed by FairValueLabs
FairValueLabs Disclaimer
All valuations, scores, ratings, and classifications on this page are produced by the FairValueLabs internal valuation system. They do not represent actual market value, guaranteed outcomes, or professional investment advice. These are analytical estimates for educational and research purposes only.
This is not financial advice. All data is sourced from SEC EDGAR public filings. Always consult a qualified financial advisor before making investment decisions.
Last updated: Apr 22, 2026. Data sources: SEC EDGAR (financial statements), Yahoo Finance (market data, analyst consensus). Data may not reflect the most recent quarter.
COST analysis methodology: How we calculate fair value, Z-Scores, and moat ratings