Costco Wholesale Corporation COST
Costco enters its Q4 FY2026 earnings report (Sept. 24) with accelerating top-line momentum — quarterly revenue growth stepped up from 8.3% in Q1 to 11.6% in Q3 FY2026, and FY2025 operating margin expanded to 3.77% from 3.65% — but the stock at $904.70 trades at 45.4x trailing earnings, a 108% premium to the peer median of 21.8x, offering no margin of safety even for a best-in-class compounder. Technicals are deteriorating with the price below both the 50-day ($935.30) and 200-day ($960.23) moving averages, MACD histogram negative, and smart money scores cooling from 0.18 in Q3 2025 to 0.04 as of Q2 2026.
The fundamental story is intact and arguably improving, but the valuation premium and weakening technical posture argue for patience until either the multiple compresses or earnings growth visibly catches up to the price.
What could go wrong
- Valuation compression. At 45.4x P/E (108% above peer median of 21.8x) and 27.0x EV/EBITDA (53% above median), any disappointment in membership growth or comp sales could trigger a sharp de-rating.
- Technical breakdown. Stock trades below both 50-day ($935.30) and 200-day ($960.23) MAs with negative MACD histogram (-0.42) and RSI at 41.9; a close below recent support could accelerate selling.
- Insider selling pressure. Over 24 months, insiders net sold $66.5M in value across 84 dispositions versus 31 acquisitions, signaling limited insider conviction at current levels.
- Smart money cooling. Smart money score declined from 0.18 in Q3 2025 to 0.04 as of Q2 2026, suggesting institutional enthusiasm is fading even as fund count rose to 73.
What would change my mind
Where this comes from: quarterly_results, period ended 2026-05-10 · fundamentals and derived_metrics, fiscal year 2025 · peer_relative · technicals, as of 2026-09-23. Orin's read on COST; not advice.
Twelve months actual closes to 2026-09-23 · actual filings
50-day average 200-day average · volume below
On file
All COST filingsLargest holders · 13F Q2 2026
Money flow| Filer | Position | Of fund |
|---|---|---|
| Vanguard Capital Management | $27.1B | 0.6% of fund |
| State Street | $17.2B | 0.5% of fund |
| Invesco | $13.1B | 1.0% of fund |
| Brasada Capital Management | $12.5B | 2.2% of fund |
| Geode Capital Management | $9.9B | 0.5% of fund |
| Vanguard Portfolio Management | $9.7B | 0.4% of fund |
188 filers · quarter ended Q2 2026 · positions, not flows
Insiders, last 24 months: 115 Form 4 filings, net −$66.5M. Of the 50 on hand, 0 were open-market purchases and 12 sales— the rest are grants, option exercises and tax withholding.
Ask Orin about COST
Orin answers questions about COST from its filings, transcripts and numbers — with the source behind every claim. Your own desk starts with 3 free days, card required.
Start 3 free days →Where it trades
| Metric | Now | Own median | Sector |
|---|---|---|---|
| P/E | 45.4× | 40.3× | 38.3× |
| EV/EBITDA | 27.0× | 23.7× | — |
| P/S | 1.37× | 1.04× | — |
| P/B | 12.0× | 11.5× | — |
Its P/E sits 60th percentile of its own last 5 years (+0.08σ from its own mean).
20.5%
free-cash-flow growth every year for 10 years, discounted at 10%, is what today’s price implies — starting from $7.8B of trailing free cash flow. It is an assumption the market is making, not a forecast Orin is making.
What Wall Street published
$1102
$1000 – $1275 · +22% against today's price
- 39 buy or overweight
- 19 hold
- 1 underweight or sell
The analysts’ consensus and their own ratings, not Orin’s. A target is a twelve-month opinion published by the firm that wrote it.
Against the companies it is compared to
| Company | Market cap | P/E | EV/EBITDA | Gross | Net | ROE |
|---|---|---|---|---|---|---|
| COSTCostco Wholesale Corporation | $401B | 45.4× | 27.0× | 12.9% | 3.0% | 28% |
| DGDollar General Corporation | $27B | 15.6× | 12.5× | 31.2% | 3.9% | 20% |
| DLTRDollar Tree, Inc. | $22B | 13.8× | 9.8× | 38.7% | 8.0% | 46% |
| KOThe Coca-Cola Company | $379B | 26.5× | 20.7× | 61.9% | 28.6% | 43% |
| PGThe Procter & Gamble Company | $351B | 21.8× | 17.7× | 50.2% | 18.4% | 30% |
| PMPhilip Morris International Inc. | $297B | 27.4× | 18.7× | 67.5% | 25.6% | -112% |
| TGTTarget Corporation | $71B | 16.1× | 9.9× | 29.3% | 4.1% | 27% |
| WMTWalmart Inc. | $880B | 39.9× | 22.0× | 25.2% | 3.0% | 23% |
The median is of the 7 peers listed above and nothing else — check it against the column. This company trades 108.0% above it. The peer set is the vendor’s, so a company can appear here that a person would not have chosen.
What it has traded at
What its sector has traded at
Two scales, drawn separately on purpose: a sector median and one company’s multiple are not the same number and putting them on one axis invites a comparison neither series supports.
Discounted cash flow
| Model | Fair value | Against | Computed |
|---|---|---|---|
| Standard DCF | $321 | $975.97 · −67% | 2026-06-10 |
| Levered DCF | $502 | $975.97 · −49% | 2026-06-10 |
The vendor’s intrinsic-value models. Treat them as a low-growth anchor — for a fast grower the market routinely pays well above a DCF. These were computed against the price in the “against” column, not today’s.
Every estimate on one scale
The vertical rule is the current price. Ranges and point estimates are the backend’s, published as they were calculated; an arrow means the estimate sits beyond this scale, and its number is on the right.