Costco Wholesale (COST)
Consumer · NASDAQ · US
Fundamentals
Valuation and ratings
Costco Wholesale trades at $916.54, close to the $850.00 our discounted cash flow model puts on the business. On this measure the market and the model broadly agree, so the interesting question is which of them is wrong.
Our moat model scores it 80 out of 100, which is a wide moat. A moat is a structural reason competitors cannot take the profits away, and it matters more to a long holding period than any single quarter's numbers do.
It changes hands at 46.1 times earnings. Be careful reading that in isolation: for a cyclical business a low P/E arrives at the top of the cycle, when profits are peaking and about to fall, which is exactly when the shares look cheapest and are not.
About Costco Wholesale
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. The company is also involved in warehouse ancillary operations, which include gasoline, pharmacies, optical, food courts, hearing-aid centers, and tire installation centers. In addition, it engages in e-commerce, business centers, travel, and other businesses. The company was formerly known as Costco Companies, Inc. and changed its name to Costco Wholesale Corporation in August 1999. Costco Wholesale Corporation was founded in 1976 and is based in Issaquah, Washington.
COST passes 4 of our 30 screens today
Each screen prints the exact criteria it used, and the circumstances in which it is wrong.
Common questions
Is Costco Wholesale (COST) undervalued?
Against our discounted cash flow estimate of $850.00, COST at $916.54 is 7% above fair value. That is one model's answer, not a recommendation, and most of a DCF's output sits in a terminal value nobody can forecast.
Which funds own COST?
24 of the institutions we track reported a position in COST in their most recent SEC 13F filing. A 13F is filed up to 45 days after quarter end, so it tells you what a fund held then, not what it holds now.
What is COST's P/E ratio?
COST trades at 46.1 times earnings. A low P/E is not automatically cheap: on a cyclical company it is usually a warning that earnings are at a peak.
The full research page for COST, with financial statements, ownership detail, peer comparison and alerts, is free inside the app.
Data from company filings, exchange quotes and SEC EDGAR 13F disclosures. Quotes are delayed. Metrics we do not have are left out rather than estimated. Educational information, not financial advice.