Highly Regarded

Is Costco Wholesale Corporation (COST) Stock Undervalued or Overvalued?

Trailing-twelve-month multiples vs Consumer Staples sector peers in our coverage

65% Premium TTM fundamentals · sector averages from covered peers

COST trades at 50.4× TTM earnings — a 65% premium to its Consumer Staples sector average of 30.6× in our coverage.

The Numbers

P/E (TTM)

50.4×

Sector avg: 30.6×

P/S (TTM)

1.5×

Sector avg: 3.6×

Market Cap

$417.59B

EPS (TTM): $18.67

Revenue (TTM)

$280.39B

Net income: $8.30B

Consumer Staples Peer Comparison

How COST's multiples stack up against sector peers we cover. Click any peer for its own valuation breakdown.

Stock Price P/E (TTM)
COST This page $940.79 50.4×
WMT $114.22 39.9×
KO $81.54 28.9×
PEP $137.10 22.8×

Is the Premium Justified?

July 6, 2026

Costco Wholesale Corporation's P/E of 50.8x represents a premium to the Consumer Staples sector average of 35.7x. This valuation is supported by consistent growth, with Q2 2026 revenue increasing 9.23% year-over-year and EPS for Q3 2026 rising 15.2%. The company is forecast to grow earnings by 8.8% and revenue by 7% per annum. Costco's business model, which relies heavily on membership fees, allows it to operate with significantly lower gross margins (12-13%) compared to traditional retailers, passing savings to customers and fostering strong member loyalty. Its operating margin for the trailing twelve months is 3.93%, and net margin is 2.9%. The stability inherent in the consumer staples sector, combined with Costco's unique and successful membership-driven approach, likely contributes to its higher valuation multiple.

Sources

Frequently Asked Questions

Is COST overvalued or undervalued?
On trailing-twelve-month earnings, COST trades at 50.4x versus a Consumer Staples sector average of 30.6x in our coverage — a 64.9% premium. Whether that's justified depends on growth, margins, and risk; see the context above.
What does the P/E ratio tell you?
Price-to-earnings compares a company's share price with its per-share profits. A higher multiple means investors pay more per dollar of earnings — often for faster expected growth — while a lower one can signal slower growth or higher perceived risk.
Why compare against the sector average?
Valuation multiples vary structurally between industries — software typically trades richer than banks or energy. Comparing COST with its own Consumer Staples peers is more informative than comparing against the whole market.
Is a cheap stock automatically a good buy?
No. A discount can be justified by weak growth or elevated risk (a "value trap"), and a premium can be earned by quality and consistency. Valuation is one input — pair it with the fundamentals and the AI context on this page.

Methodology

Multiples are computed from trailing-twelve-month fundamentals (from company filings) and the latest share price: P/E is price ÷ diluted EPS, and P/S is market cap ÷ revenue. Sector averages use the Consumer Staples names in our 50-stock coverage with positive earnings — a deliberately like-for-like, if imperfect, benchmark.

Stocks with negative trailing earnings are compared on price-to-sales instead. Multiples update with prices and fundamentals; AI context refreshes weekly.

Not Financial Advice

This page is for education and information only. Indicators are mechanical calculations, AI commentary can contain errors, and nothing here is a recommendation to buy or sell any security. Do your own research and consider consulting a qualified financial advisor. See our full disclaimer.

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Same question, Consumer Staples peers

PG PEP KO WMT