Costco Wholesale Corporation (COST)

FairStock Score: 50/100 — MIXED

Key Financials

AI Analysis

AI-generated, general educational analysis — not personal investment advice.

Costco is the kind of business I admire: a consumer-defensive warehouse retailer that sells everyday goods at low prices and turns modest margins into high returns through volume and efficiency. The filed figures show fiscal 2026 revenue of $303.2B and net income of $9.2B, up from $275.2B and $8.1B in fiscal 2025; diluted EPS rose from $18.21 to $20.76. In the fiscal third quarter of 2026, the quarter ended 2026-05-10, revenue was $70.5B and net income was $2.2B. That is steady, dependable growth, and FairStock's Lynch rule calls it a stalwart, with 13.0% yearly profit growth and 9.1% revenue growth over five years. The balance sheet is conservative, with a debt-to-equity ratio of 0.25, an Altman Z-Score of 6.19, and a Piotroski F-Score of 8/9. Return on equity is 29.15%, though return on capital employed is 8.67%. The trouble is price. At the 2026-10-13 close of $954.63, FairStock calculates a P/E of 48.02, P/B of 12.64, PEG of 3.16, EV/EBITDA of 28.50, and FCF yield of 2.1%. Its Graham Number is $183.84, leaving a margin of safety of -419.27%. A wonderful business can still be a poor investment if bought too dear. Costco looks durable and financially strong, but the quotation assumes many more years of excellent growth.

In plain English: Costco runs membership warehouse stores in many countries, selling groceries, electronics, and household goods at low prices. The business looks strong: sales and profits have been growing, debt is low, and it earns a lot on shareholders' money. The stock price, however, looks expensive compared with the company's profits and accounting value, so it appears priced for continued success rather than as a bargain.

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Data as of 2026-10-13 close · note generated 2026-10-15 · model deepseek-flash

Sources (SEC EDGAR): fiscal Q3 2026 10-Q (period ended 2026-05-10) · fiscal Q2 2026 10-Q (period ended 2026-02-15) · fiscal Q1 2026 10-Q (period ended 2025-11-23) · fiscal Q3 2025 10-Q (period ended 2025-05-11) · FY2026 10-K (period ended 2026-08-30) · FY2025 10-K (period ended 2025-08-31) · FY2024 10-K (period ended 2024-09-01)

Fundamentals from company filings and market-data providers; prices are end-of-day, not real-time. AI-generated analysis is general and educational — not personal investment advice. Scoring methodology · Score test · Disclaimer