Market Cap
$447.5B
Price $1,008.76
Revenue TTM
$286.3B
+8.4% YoY
Net Income TTM
$8.55B
+12.2% YoY
FCF FY2025
$7.8B
FCF Yield 1.87%
P/E
53.67x
Forward P/E 48.5x
1 Company Profile
Costco Wholesale (COST — Costco Wholesale Corporation) is a global membership-warehouse retailer, listed on NASDAQ. The company operates 870+ warehouse stores across the US, Canada, Mexico, Japan, Europe and the UK, on a membership-based model ($65/year Gold Star, $130 Executive). Costco is considered one of the most efficient retailers in the world — thin operating margins offset by high volumes and member renewal rates above 90%. Revenue TTM: $286.3B (+8.4%). Strong ROE of 30.7%. Key note: P/E of 53.7x — a high valuation relative to history, even for a high-quality company.
| Segment | Characteristic |
|---|
| US Costco | ~73% — core of the business |
| Canada | ~13% — mature market |
| Other International | ~14% — Mexico, Japan, EU, UK |
| Membership Fees | ~2% of revenue, but ~50% of operating profit |
Source: SEC 10-K FY2025
2 Key Financial Observations
This summary is not a recommendation. It is a factual list of key financial metrics.
TTM Performance
| Metric | Value |
|---|
| Revenue | $286.3B |
| Net Income | $8.55B |
| FCF | $7.8B |
| ROE | 30.7% |
| ROIC | 21.8% |
Additional Metrics
| Metric | Value |
|---|
| P/E | 53.67x |
| Forward P/E | 48.46x |
| EV/EBITDA | 33.28x |
| FCF Yield | 1.87% |
Data gaps: precise 2025 membership renewal rate, profit split by geography, e-commerce penetration.
Returns on Capital (ROE, ROIC, ROA)
Valuation Multiples (P/E, Fwd P/E, EV/EBITDA)
3 Industry & Competitive Context
US retail — competition from Walmart, Amazon, Target. Costco is unique through its membership model.
| Competitor | Ticker | Difference |
|---|
| Walmart | WMT | Massive scale — different model |
| Sam's Club (Walmart) | — | Direct membership competitor |
| BJ's Wholesale | BJ | Smaller membership competitor |
| Amazon | AMZN | E-commerce competition |
4 Risk Factors
| Risk | Context |
|---|
| High valuation | P/E 53.7x — sensitive to disappointment |
| Slowdown in membership growth | If innovation stalls |
| Food inflation | Could pressure thin operating margins |
| E-commerce | Amazon — relentless competition |
5 Analytical Lens — The Questions We Ask
In professional company analysis, the question is not "is this good", but rather "which angles must we examine in order not to miss the essence". At Bakshi Finance, every analysis passes through six lenses.
This framework is intended to structure analysis, not to produce an investment conclusion.
Growth
+8.4% — how much from organic growth vs new memberships?
Profitability
Thin operating margins — how are they sustained?
Leverage
Net cash positive — what is the capital strategy?
Competitive Position
The membership model — is it sustainable?
Management Quality
Management stability and the everyday-low-price discipline
Business Complexity
Global + membership + e-commerce — how to assess?
6 Scenario Framework
Scenarios are descriptive, not predictive. They outline possible conditions, not expected outcomes.
These scenarios contain no probability assessment, no preferred direction, and no expectation of which one will materialize.
Positive scenario — if the conditions are met:
Accelerated international expansion, member renewal sustained at 90%+, e-commerce growing in double digits.
Base scenario — if the conditions are met:
Revenue grows 7-9%, net income grows ~10%, ROE sustained at 25-30%.
Negative scenario — if the conditions are met:
Consumer recession, decline in member renewal, P/E compression.
The scenarios describe conditions, not forecasts. This framework contains no preferred direction or probability assessment.
7 How to Think About This Company
Costco is a classic example of a high-quality company carrying a premium valuation. The framing for analyzing Costco is not "is this a good business" (it is one of the best in retail), but rather "is a P/E multiple of 53.7x consistent with an FCF Yield of only 1.87%". This is a classic quality-vs-valuation tension.
The critical variables: (a) member renewal rate — currently above 90%. If it falls below 87%, the story changes meaningfully; (b) international expansion — where is the next leg of growth? (c) e-commerce penetration — how does it develop without cannibalizing the physical-warehouse model?
Where the analysis can go wrong: First mistake — assuming a premium valuation is permanent. Second mistake — ignoring the unique model (membership = ~50% of operating profit). Third mistake — comparing to Walmart while overlooking Costco's higher ROIC.
Professional analysis focuses on three things: (a) EPS sensitivity to food inflation; (b) membership renewal rate over time; (c) whether ROIC is sustained or eroding.
The difference between surface-level analysis and professional thinking often lies in variables that are not immediately visible.
The difference between surface-level analysis and professional thinking often lies in the variables that are not immediately visible.
8 Sources & Data
| # | Source | Date | Type |
|---|
| 1 | SEC EDGAR — 10-K FY2025 | October 2025 | Official — SEC |
| 2 | Costco IR | Quarterly | Official |
| 3 | NASDAQ — COST | April 2026 | Official |
Missing: precise 2025 membership renewal rate, profit split by geography, e-commerce penetration.
