US · Nasdaq · COST
Costco (COST) stock analysis: valuation and financials
Consumer Discretionary · Department/Specialty Retail Stores
$959.00 -0.1% Price as of Oct 12, 2026
Wide-moat club: FY2026 revenue +10.1% to $303.2B, ROIC 42.6%, $15.1B net cash, fees ~half of operating income; but at 46x P/E base-case upside is -8.9%. Great business, full price.
- Market cap
- $425.2B
- P/E
- 46.1x
- EV/Sales
- 1.4x
- FCF yield
- 2.2%
- Dividend yield
- 0.6%
- 52-week range
- $850.00 – $1,094.32
Research as of Oct 13, 2026
Business quality scorecard
- Growth45
- Profitability37
- Cash flow71
- Balance sheet74
- Capital allocation90
- Valuation32
0–100, computed from reported financials; higher is better, and a higher valuation score means cheaper.
How it makes money
Members pay annual fees plus low-margin prices for food, non-food and fresh merchandise bought in bulk at 939 warehouses; net sales drive 98% of revenue but the US segment is the profit engine at 65.4% of operating profit, with membership fees ($5.9B) providing the highest-margin stream.
Financials by year
| FY2022Sep 2021–Aug 2022 | FY2023Sep 2022–Aug 2023 | FY2024Sep 2023–Aug 2024 | FY2025Sep 2024–Aug 2025 | FY2026Sep 2025–Aug 2026 | |
|---|---|---|---|---|---|
| Revenue | $227.0B | $242.3B | $254.5B | $275.2B | $303.2B |
| Revenue growth | +15.8% | +6.8% | +5.0% | +8.2% | +10.1% |
| Gross margin | 12.1% | 12.3% | 12.6% | 12.8% | 12.8% |
| Operating margin | 3.4% | 3.3% | 3.6% | 3.8% | 3.9% |
| Net income | $5.8B | $6.3B | $7.4B | $8.1B | $9.2B |
| Free cash flow | $3.5B | $6.7B | $6.6B | $7.8B | $9.4B |
| FCF margin | 1.5% | 2.8% | 2.6% | 2.8% | 3.1% |
Amounts in USD · What is free cash flow?
Margins FY2026 gross margin 12.82% vs 12.84% FY2025 (-2 bps; MD&A -3 bps); operating margin 3.85% vs 3.77% (+8 bps). Ex-gasoline gross margin was 11.22%, up 10 bps - 12% higher fuel prices added 130 bps of low-margin sales.
- Cash flow HealthyOperating cash flow $15.8B versus net income $9.2B, cash conversion 1.64x; free cash flow $9.4B with a 3.09% FCF margin, up from 2.85% in FY2025.
- Debt LowNet cash of $15.1B: total debt $6.2B against $20.2B cash and $1.1B short-term investments. Net debt/EBITDA is -1.05x and leverage is flagged green for net cash.
Balance sheet Leverage · Net cash
- Cash & short-term investments
- $21.3B
- Total debt
- $6.2B
- Net cash
- $15.1B
- Interest coverage
- 80.6x
- Current ratio
- 1.1x
As of Aug 30, 2026 · Amounts in USD · How to read a balance sheet
Management and track record
- Management StrongExecution: FY2026 revenue rose 10.1% to $303.2B, net income $9.23B, ROIC 42.6% versus 36.9% in FY2023, and free cash flow reached $9.38B.
- Credibility HighNo quantitative revenue, margin, EPS or capex guidance appears in any of the six earnings releases reviewed; there is no formal guidance to beat or miss.
Valuation range
Implied value per share · Price when researched: $959.00
Each scenario assumes five years of revenue growth, an FCF margin and an exit multiple, discounted to today. The assumptions and sensitivities are in the full report.
The full report also covers
- Revenue, growth and outlook of each segment
- Moat and main competitors
- Key risks
- Capital allocation: where the free cash flow went
- What management promised, and what they delivered
- Scenario assumptions and sensitivities
- A source for every claim
- Ask AI about this company
The full report is for members.