COSTCO WHOLESALE CORP (COST) Stock Fundamental Analysis
USA - NASDAQ:COST - US22160K1051 - Common Stock
955.2 USD
+2.84 (+0.3%)
Overall COST gets a fundamental rating of 6 out of 10. We evaluated COST against 40 industry peers in the Consumer Staples Distribution & Retail industry. COST gets an excellent profitability rating and is at the same time showing great financial health properties. COST is quite expensive at the moment. It does show a decent growth rate. With these ratings, COST could be worth investigating further for quality investing!.
1. Profitability
1.1 Basic Checks
COST had positive earnings in the past year.
In the past year COST had a positive cash flow from operations.
In the past 5 years COST has always been profitable.
Each year in the past 5 years COST had a positive operating cash flow.
1.2 Ratios
COST's Return On Assets of 10.39% is amongst the best of the industry. COST outperforms 87.50% of its industry peers.
Looking at the Return On Equity, with a value of 28.91%, COST belongs to the top of the industry, outperforming 85.00% of the companies in the same industry.
Looking at the Return On Invested Capital, with a value of 19.92%, COST belongs to the top of the industry, outperforming 100.00% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for COST is significantly above the industry average of 8.47%.
The last Return On Invested Capital (19.92%) for COST is above the 3 year average (18.60%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 10.39% | ||
| ROE | 28.91% | ||
| ROIC | 19.92% |
ROA(3y)9.59%
ROA(5y)8.89%
ROE(3y)28.2%
ROE(5y)27%
ROIC(3y)18.6%
ROIC(5y)17.81%
1.3 Margins
COST has a better Profit Margin (2.92%) than 72.50% of its industry peers.
COST's Profit Margin has improved in the last couple of years.
Looking at the Operating Margin, with a value of 3.75%, COST is in the better half of the industry, outperforming 70.00% of the companies in the same industry.
In the last couple of years the Operating Margin of COST has grown nicely.
The Gross Margin of COST (12.78%) is worse than 82.50% of its industry peers.
COST's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 3.75% | ||
| PM (TTM) | 2.92% | ||
| GM | 12.78% |
OM growth 3Y-0.72%
OM growth 5Y3.3%
PM growth 3Y4.25%
PM growth 5Y3.86%
GM growth 3Y-0.71%
GM growth 5Y-0.57%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), COST is creating value.
The number of shares outstanding for COST remains at a similar level compared to 1 year ago.
COST has more shares outstanding than it did 5 years ago.
Compared to 1 year ago, COST has an improved debt to assets ratio.
2.2 Solvency
COST has an Altman-Z score of 9.64. This indicates that COST is financially healthy and has little risk of bankruptcy at the moment.
The Altman-Z score of COST (9.64) is better than 97.50% of its industry peers.
The Debt to FCF ratio of COST is 0.78, which is an excellent value as it means it would take COST, only 0.78 years of fcf income to pay off all of its debts.
COST has a Debt to FCF ratio of 0.78. This is amongst the best in the industry. COST outperforms 87.50% of its industry peers.
A Debt/Equity ratio of 0.21 indicates that COST is not too dependend on debt financing.
With a decent Debt to Equity ratio value of 0.21, COST is doing good in the industry, outperforming 65.00% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.21 | ||
| Debt/FCF | 0.78 | ||
| Altman-Z | 9.64 |
ROIC/WACC2.32
WACC8.57%
2.3 Liquidity
A Current Ratio of 1.02 indicates that COST should not have too much problems paying its short term obligations.
COST has a worse Current ratio (1.02) than 70.00% of its industry peers.
A Quick Ratio of 0.52 indicates that COST may have some problems paying its short term obligations.
COST has a Quick ratio (0.52) which is comparable to the rest of the industry.
COST does not score too well on the current and quick ratio evaluation. However, as it has excellent solvency and profitability, these ratios do not necessarly indicate liquidity issues and need to be evaluated against the specifics of the business.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.02 | ||
| Quick Ratio | 0.52 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an nice 9.23% over the past year.
Measured over the past years, COST shows a quite strong growth in Earnings Per Share. The EPS has been growing by 15.11% on average per year.
Looking at the last year, COST shows a small growth in Revenue. The Revenue has grown by 5.94% in the last year.
Measured over the past years, COST shows a quite strong growth in Revenue. The Revenue has been growing by 10.75% on average per year.
EPS 1Y (TTM)9.23%
EPS 3Y14.32%
EPS 5Y15.11%
EPS Q2Q%13.23%
Revenue 1Y (TTM)5.94%
Revenue growth 3Y9.1%
Revenue growth 5Y10.75%
Sales Q2Q%8.02%
3.2 Future
Based on estimates for the next years, COST will show a quite strong growth in Earnings Per Share. The EPS will grow by 9.40% on average per year.
COST is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 6.62% yearly.
EPS Next Y11.86%
EPS Next 2Y11.17%
EPS Next 3Y10.86%
EPS Next 5Y9.4%
Revenue Next Year7.75%
Revenue Next 2Y7.62%
Revenue Next 3Y7.48%
Revenue Next 5Y6.62%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
COST is valuated quite expensively with a Price/Earnings ratio of 54.18.
Compared to the rest of the industry, the Price/Earnings ratio of COST indicates a slightly more expensive valuation: COST is more expensive than 75.00% of the companies listed in the same industry.
COST's Price/Earnings ratio indicates a rather expensive valuation when compared to the S&P500 average which is at 27.41.
With a Price/Forward Earnings ratio of 46.64, COST can be considered very expensive at the moment.
Compared to the rest of the industry, the Price/Forward Earnings ratio of COST indicates a slightly more expensive valuation: COST is more expensive than 62.50% of the companies listed in the same industry.
COST is valuated expensively when we compare the Price/Forward Earnings ratio to 22.88, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 54.18 | ||
| Fwd PE | 46.64 |
4.2 Price Multiples
75.00% of the companies in the same industry are cheaper than COST, based on the Enterprise Value to EBITDA ratio.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of COST indicates a slightly more expensive valuation: COST is more expensive than 70.00% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 57.89 | ||
| EV/EBITDA | 33.13 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
COST has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)4.57
PEG (5Y)3.59
EPS Next 2Y11.17%
EPS Next 3Y10.86%
5. Dividend
5.1 Amount
With a yearly dividend of 0.54%, COST is not a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 2.01, COST pays a bit more dividend than its industry peers.
With a Dividend Yield of 0.54, COST pays less dividend than the S&P500 average, which is at 2.38.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.54% |
5.2 History
On average, the dividend of COST grows each year by 53.89%, which is quite nice.
COST has paid a dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)53.89%
Div Incr Years0
Div Non Decr Years0
5.3 Sustainability
COST pays out 19.69% of its income as dividend. This is a sustainable payout ratio.
COST's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP19.69%
EPS Next 2Y11.17%
EPS Next 3Y10.86%
NASDAQ:COST (9/19/2025, 3:25:00 PM)
955.2
+2.84 (+0.3%)
Chartmill FA Rating
GICS SectorConsumer Staples
GICS IndustryGroupConsumer Staples Distribution & Retail
GICS IndustryConsumer Staples Distribution & Retail
Earnings (Last)
Earnings (Next)
Inst Owners71.83%
Inst Owner Change-1.51%
Ins Owners0.09%
Ins Owner Change0.02%
Market Cap423.61B
Analysts78.14
Price Target1089.82 (14.09%)
Short Float %1.55%
Short Ratio3.24
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.54% |
Yearly Dividend20.41
Dividend Growth(5Y)53.89%
DP19.69%
Div Incr Years0
Div Non Decr Years0
Ex-Date
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-2.51%
Min EPS beat(2)-4.04%
Max EPS beat(2)-0.98%
EPS beat(4)2
Avg EPS beat(4)0.45%
Min EPS beat(4)-4.04%
Max EPS beat(4)4.5%
EPS beat(8)5
Avg EPS beat(8)1.26%
EPS beat(12)6
Avg EPS beat(12)-0.44%
EPS beat(16)10
Avg EPS beat(16)1.2%
Revenue beat(2)0
Avg Revenue beat(2)-1.49%
Min Revenue beat(2)-1.94%
Max Revenue beat(2)-1.05%
Revenue beat(4)0
Avg Revenue beat(4)-1.86%
Min Revenue beat(4)-2.61%
Max Revenue beat(4)-1.05%
Revenue beat(8)0
Avg Revenue beat(8)-1.78%
Revenue beat(12)0
Avg Revenue beat(12)-2.05%
Revenue beat(16)1
Avg Revenue beat(16)-1.63%
PT rev (1m)-0.05%
PT rev (3m)-0.92%
EPS NQ rev (1m)-0.07%
EPS NQ rev (3m)-0.06%
EPS NY rev (1m)-0.05%
EPS NY rev (3m)0.4%
Revenue NQ rev (1m)0.19%
Revenue NQ rev (3m)0.27%
Revenue NY rev (1m)0.05%
Revenue NY rev (3m)0.01%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 54.18 | ||
| Fwd PE | 46.64 | ||
| P/S | 1.58 | ||
| P/FCF | 57.89 | ||
| P/OCF | 34.09 | ||
| P/B | 15.62 | ||
| P/tB | 15.62 | ||
| EV/EBITDA | 33.13 |
EPS(TTM)17.63
EY1.85%
EPS(NY)20.48
Fwd EY2.14%
FCF(TTM)16.5
FCFY1.73%
OCF(TTM)28.02
OCFY2.93%
SpS606.06
BVpS61.16
TBVpS61.16
PEG (NY)4.57
PEG (5Y)3.59
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 10.39% | ||
| ROE | 28.91% | ||
| ROCE | 26.6% | ||
| ROIC | 19.92% | ||
| ROICexc | 32.76% | ||
| ROICexgc | 32.76% | ||
| OM | 3.75% | ||
| PM (TTM) | 2.92% | ||
| GM | 12.78% | ||
| FCFM | 2.72% |
ROA(3y)9.59%
ROA(5y)8.89%
ROE(3y)28.2%
ROE(5y)27%
ROIC(3y)18.6%
ROIC(5y)17.81%
ROICexc(3y)29.37%
ROICexc(5y)29.08%
ROICexgc(3y)30.8%
ROICexgc(5y)30.84%
ROCE(3y)24.84%
ROCE(5y)23.78%
ROICexcg growth 3Y-2.2%
ROICexcg growth 5Y2.32%
ROICexc growth 3Y-1.15%
ROICexc growth 5Y1.43%
OM growth 3Y-0.72%
OM growth 5Y3.3%
PM growth 3Y4.25%
PM growth 5Y3.86%
GM growth 3Y-0.71%
GM growth 5Y-0.57%
F-Score7
Asset Turnover3.56
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.21 | ||
| Debt/FCF | 0.78 | ||
| Debt/EBITDA | 0.46 | ||
| Cap/Depr | 216.67% | ||
| Cap/Sales | 1.9% | ||
| Interest Coverage | 84.03 | ||
| Cash Conversion | 99.87% | ||
| Profit Quality | 93.29% | ||
| Current Ratio | 1.02 | ||
| Quick Ratio | 0.52 | ||
| Altman-Z | 9.64 |
F-Score7
WACC8.57%
ROIC/WACC2.32
Cap/Depr(3y)207.83%
Cap/Depr(5y)199.15%
Cap/Sales(3y)1.78%
Cap/Sales(5y)1.77%
Profit Quality(3y)85.7%
Profit Quality(5y)103.11%
High Growth Momentum
Growth
EPS 1Y (TTM)9.23%
EPS 3Y14.32%
EPS 5Y15.11%
EPS Q2Q%13.23%
EPS Next Y11.86%
EPS Next 2Y11.17%
EPS Next 3Y10.86%
EPS Next 5Y9.4%
Revenue 1Y (TTM)5.94%
Revenue growth 3Y9.1%
Revenue growth 5Y10.75%
Sales Q2Q%8.02%
Revenue Next Year7.75%
Revenue Next 2Y7.62%
Revenue Next 3Y7.48%
Revenue Next 5Y6.62%
EBIT growth 1Y11.75%
EBIT growth 3Y8.31%
EBIT growth 5Y14.41%
EBIT Next Year40.12%
EBIT Next 3Y19.9%
EBIT Next 5Y14.7%
FCF growth 1Y25.66%
FCF growth 3Y7.27%
FCF growth 5Y14.57%
OCF growth 1Y26.17%
OCF growth 3Y8.17%
OCF growth 5Y12.27%