Highly Regarded

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

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

66% Premium TTM fundamentals · sector averages from covered peers

COST trades at 50.6× TTM earnings — a 66% premium to its Consumer Staples sector average of 30.5× in our coverage.

The Numbers

P/E (TTM)

50.6×

Sector avg: 30.5×

P/S (TTM)

1.5×

Sector avg: 3.8×

Market Cap

$418.92B

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 $943.80 50.6×
WMT $104.83 36.7×
KO $88.72 31.5×
PEP $140.33 23.4×

Is the Premium Justified?

August 30, 2026

Costco Wholesale Corporation trades at a P/E of 50.7x, a notable premium to the consumer staples sector average of 35.5x. This premium is largely justified by Costco's highly effective membership-based business model, which generates predictable, high-margin revenue from annual fees. This model allows for razor-thin product margins, fostering exceptional customer loyalty and high membership renewal rates. Recent growth drivers include the successful launch of executive memberships in China, attracting younger demographics through online registrations, and expanding same-day delivery services. In Q3 fiscal year 2026, executive members increased by 9.6% year-over-year, contributing significantly to total sales, and overall sales increased by 11.6%. Strong comparable traffic growth further reinforces its value proposition.

Sources

Frequently Asked Questions

Is COST overvalued or undervalued?
On trailing-twelve-month earnings, COST trades at 50.6x versus a Consumer Staples sector average of 30.5x in our coverage — a 65.7% 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 WMT PEP KO