📊 COST Key Takeaways
Is Costco Wholesale Corp. /New (COST) a Good Investment?
Costco exhibits fortress-grade financial health with robust free cash flow ($6.9B), exceptional capital efficiency (18.6% ROE, 7.2% ROA), and a pristine balance sheet (0.17x D/E, 78.8x interest coverage). However, revenue and net income growth have completely stagnated at 0% YoY despite the company's dominant market position, suggesting either cyclical headwinds or structural competition pressures that warrant caution despite operational excellence.
Costco shows high-quality fundamentals built on consistent profitability, strong free cash flow generation, and a very conservative balance sheet with low leverage and ample cash. While the latest period shows flat revenue and net income, the business still converts sales efficiently for a low-margin retailer and maintains exceptional financial resilience, supporting a favorable long-term fundamental view.
Costco Wholesale Corp. /New Key Strengths (COST)
- Fortress balance sheet with minimal leverage (0.17x D/E) and exceptional interest coverage (78.8x), providing substantial financial resilience and strategic flexibility
- Strong capital efficiency demonstrated by 18.6% ROE and 7.2% ROA despite ultra-thin margins inherent to warehouse retail model
- Robust free cash flow generation of $6.9B annually combined with $18.9B cash position enables shareholder returns and strategic investments without financial stress
- Strong balance sheet with $17.38B in cash, low debt/equity of 0.18x, and very high 74.5x interest coverage
- Reliable cash generation with $7.68B operating cash flow and $4.87B free cash flow
- Solid profitability for a scale retailer, including 12.0% gross margin, 3.7% operating margin, and 12.6% ROE
COST Stock Risks: Costco Wholesale Corp. /New Investment Risks
- Revenue growth completely stalled at 0% YoY, indicating potential market saturation, competitive intensity, or macroeconomic headwinds affecting member traffic or spending
- Extremely thin profit margins (7.9% gross, 3.8% operating, 3.0% net) provide minimal buffer for unexpected cost inflation, wage pressures, or supply chain disruptions
- Current ratio of 1.07x suggests tight working capital management that could become problematic if operational conditions deteriorate or growth investments accelerate
- Latest period revenue and net income were flat, which may indicate slower near-term growth momentum
- Thin retail margins leave limited room for cost inflation, wage pressure, or merchandising disruption
- Quick ratio of 0.59x means liquidity depends heavily on steady inventory turnover and operating execution
Key Metrics to Watch
- Same-store sales and comparable sales growth trends - critical indicator of organic momentum and competitive positioning
- Gross margin trajectory - any further compression would signal either member pricing pressure or sourcing cost challenges
- Membership renewal rates and paid membership revenue - core driver of customer stickiness and predictable revenue stream
- Revenue and comparable-sales growth
- Operating margin and free cash flow trend
Costco Wholesale Corp. /New (COST) Financial Metrics & Key Ratios
💡 AI Analyst Insight
The relatively thin 3.3% FCF margin may limit capital allocation flexibility.
COST Profit Margin, ROE & Profitability Analysis
COST vs Consumer Sector: How Costco Wholesale Corp. /New Compares
How Costco Wholesale Corp. /New compares to Consumer sector averages
Sector benchmarks are approximate industry averages. Actual sector performance may vary.
Is Costco Wholesale Corp. /New Stock Overvalued? COST Valuation Analysis 2026
Based on fundamental analysis, Costco Wholesale Corp. /New has mixed fundamental signals relative to the Consumer sector in 2026.
Note: This is a fundamental analysis based on SEC filings. For P/E ratio, price targets, and market-based valuation, consult financial data providers. This is not investment advice.
Costco Wholesale Corp. /New Balance Sheet: COST Debt, Cash & Liquidity
COST Revenue & Earnings Growth: 5-Year Financial Trend
5-Year Trend Summary: Costco Wholesale Corp. /New's revenue has grown significantly by 40% over the 5-year period, indicating strong business expansion. The most recent EPS of $14.16 reflects profitable operations.
COST Revenue Growth, EPS Growth & YoY Performance
COST Quarterly Earnings & Performance
| Quarter | Revenue | Net Income | EPS |
|---|---|---|---|
| Q3 2026 | $63.2B | $1.9B | $4.28 |
| Q2 2026 | $63.7B | $1.8B | $4.02 |
| Q1 2026 | $62.2B | $1.8B | $4.04 |
| Q3 2025 | $58.5B | $1.7B | $3.78 |
| Q2 2025 | $58.4B | $1.7B | $3.92 |
| Q1 2025 | $57.8B | $1.6B | $3.58 |
| Q3 2024 | $53.6B | $1.3B | $2.93 |
| Q2 2024 | $55.3B | $1.5B | $3.30 |
Data sourced from SEC EDGAR 10-Q quarterly filings. Figures may represent quarterly or cumulative values.
Costco Wholesale Corp. /New Dividends, Buybacks & Capital Allocation
COST SEC Filings: Latest 10-K & 10-Q Analysis
Access official SEC EDGAR filings for Costco Wholesale Corp. /New (CIK: 0000909832)
📋 Recent SEC Filings
❓ Frequently Asked Questions about COST
What is the AI rating for COST?
Costco Wholesale Corp. /New (COST) has a Combined AI Grade of A from Claude (B) and ChatGPT (A) with 80% combined confidence, based on fundamental analysis of SEC EDGAR filings.
What are COST's key strengths?
Claude: Fortress balance sheet with minimal leverage (0.17x D/E) and exceptional interest coverage (78.8x), providing substantial financial resilience and strategic flexibility. Strong capital efficiency demonstrated by 18.6% ROE and 7.2% ROA despite ultra-thin margins inherent to warehouse retail model. ChatGPT: Strong balance sheet with $17.38B in cash, low debt/equity of 0.18x, and very high 74.5x interest coverage. Reliable cash generation with $7.68B operating cash flow and $4.87B free cash flow.
What are the risks of investing in COST?
Claude: Revenue growth completely stalled at 0% YoY, indicating potential market saturation, competitive intensity, or macroeconomic headwinds affecting member traffic or spending. Extremely thin profit margins (7.9% gross, 3.8% operating, 3.0% net) provide minimal buffer for unexpected cost inflation, wage pressures, or supply chain disruptions. ChatGPT: Latest period revenue and net income were flat, which may indicate slower near-term growth momentum. Thin retail margins leave limited room for cost inflation, wage pressure, or merchandising disruption.
What is COST's revenue and growth?
Costco Wholesale Corp. /New reported revenue of $207.4B.
Does COST pay dividends?
Costco Wholesale Corp. /New pays dividends, with $1,154.0M distributed to shareholders in the trailing twelve months.
Where can I find COST SEC filings?
Official SEC filings for Costco Wholesale Corp. /New (CIK: 0000909832) including 10-K, 10-Q, and 8-K reports are available on SEC EDGAR.
What is COST's EPS?
Costco Wholesale Corp. /New has a diluted EPS of $14.01.
How is the AI analysis conducted?
Two independent AI systems — Claude (Anthropic) and ChatGPT (OpenAI) — analyze SEC EDGAR filings including 10-K annual reports and 10-Q quarterly reports. Each AI evaluates financial health, profitability ratios, balance sheet strength, and growth metrics. The combined grade reflects both perspectives for balanced insights.
What is COST's fundamental grade?
Based on our AI fundamental analysis in June 2026, Costco Wholesale Corp. /New has a A grade with 80% confidence. The AI analysis suggests favorable fundamentals based on SEC filings. This is not investment advice.
Is COST stock overvalued or undervalued?
Valuation metrics for COST: ROE of 18.6% (sector avg: 18%), net margin of 3.0% (sector avg: 8%). Higher ROE suggests strong returns relative to peers.
What is COST's AI grade for 2026?
Our dual AI analysis gives Costco Wholesale Corp. /New a combined A grade for 2026. Revenue is data pending, with profitability at or below sector average. Always conduct your own research.
What is COST's free cash flow?
Costco Wholesale Corp. /New's operating cash flow is $11.1B, with capital expenditures of $4.2B. FCF margin is 3.3%.
How does COST compare to other Consumer stocks?
Vs Consumer sector averages: Net margin 3.0% (avg: 8%), ROE 18.6% (avg: 18%), current ratio 1.07 (avg: 1.5).