COSTCOST
US • CONSUMER DEFENSIVE
$935.03
P/E
47.03
PEG
1.03
FCF Yield
2.2%
Rev Growth YoY
+21.5% YoY
Gross Margin
12.9%
Health Score
8/10
D/E Ratio
0.25
Confidence
MEDIUM
Business Snapshot
Costco Wholesale Corporation operates a membership-only warehouse club model, generating the majority of its revenue from merchandise sales across groceries, electronics, and household goods, alongside membership fees that drive a significant portion of profits. The company is a dominant player in the discount retail space, competing with Walmart's Sam's Club and other big-box retailers through a focus on high-volume, low-margin inventory turns and a loyal membership base. As a large-cap company with a market capitalisation of $410.69B, Costco's financial scale is immense, reporting $293.59B in trailing twelve-month revenue. Its defining characteristic is a fiercely loyal membership model—consistently high renewal rates—combined with operational efficiency that allows it to offer low prices while generating substantial free cash flow.
Financial Health
Costco's gross margin is a razor-thin 12.9%, characteristic of its low-price warehouse model, while its net margin stands at 3.0% for the trailing twelve months. The balance sheet is exceptionally healthy, with a Debt/Equity ratio of just 0.25x and a Current Ratio of 1.03x, indicating ample liquidity and a conservative approach to leverage...
Risk Assessment
- VALUATION — P/E of 47.03x is more than double the sector average of 22x, leaving minimal room for error.
- TECHNICALS — Price is trading below both its 50-day MA ($971.48) and 200-day MA ($956.96), indicating a bearish intermediate-term and longer-term trend.
- INSIDER ACTIVITY — Over the last 90 days, there have been 4 insider sells versus 0 buys, signalling caution from those with the deepest knowledge of the company.
- 52-WEEK POSITION — The current price of $935.03 sits below the midpoint of the 52-week range ($967.56), and is $159.73 below the 52-week high of $1,094.76, suggesting weakening momentum from peak levels....
Costco's gross margin is a razor-thin 12.9%, characteristic of its low-price warehouse model, while its net margin stands at 3.0% for the trailing twelve months. The balance sheet is exceptionally healthy, with a Debt/Equity ratio of just 0.25x and a Current Ratio of 1.03x, indicating ample liquidity and a conservative approach to leverage. Free cash flow is robust at $8.88B, yielding 2.2%, demonstrating the company’s ability to generate significant cash from operations. Overall, Costco presents a fortress-like financial profile with a strong capacity for returning capital to shareholders via dividends and buybacks, as well as reinvesting in new warehouse openings and e-commerce capabilities.
- VALUATION — P/E of 47.03x is more than double the sector average of 22x, leaving minimal room for error. - TECHNICALS — Price is trading below both its 50-day MA ($971.48) and 200-day MA ($956.96), indicating a bearish intermediate-term and longer-term trend. - INSIDER ACTIVITY — Over the last 90 days, there have been 4 insider sells versus 0 buys, signalling caution from those with the deepest knowledge of the company. - 52-WEEK POSITION — The current price of $935.03 sits below the midpoint of the 52-week range ($967.56), and is $159.73 below the 52-week high of $1,094.76, suggesting weakening momentum from peak levels.
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