Key Stats for Costco Stock
- Current Price: $999.89
- Street Target (Mean): ~$1,072
- TIKR Target Price (Mid): ~$1,410
- Potential Total Return: ~41%
- Annualized IRR: ~8% / year
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What Happened?
While the S&P 500 has fallen more than 3% year to date, Costco (COST) shares have climbed 17%, one of the clearest signals of where investors are parking capital when the macro outlook gets uncertain. Bulls see a business that compounds quietly through tariffs, inflation, and weakening consumer confidence. Bears see a stock at nearly 50 times forward earnings with almost no margin for error.
On March 5, Costco reported fiscal Q2 2026 results. Net sales rose 9.1% to $68.24 billion, and net income came in at $2,035 million, or $4.58 per diluted share, up from $1,788 million and $4.02 per diluted share a year earlier. EPS beat the Street consensus of $4.55. The stock closed up 1.58% on the day. That the reaction was modest is itself notable: Costco’s consistency has made clean beats unremarkable.
The bigger Q2 story was tariffs. CEO Ron Vachris pledged the company would return any recovered tariff charges to members through lower prices, even as he warned that the “future impact of tariffs remains extremely fluid.”
In Q2, Costco lowered prices on eggs, cheese, coffee, and select paper products, with Vachris adding that the company would continue reducing prices on textiles, bedding, and cookware as specific tariffs rolled back.
Since then, two more data points reinforced the momentum.
On April 8, Costco reported March net sales of $28.41 billion, up 11.3% year over year, with total comparable sales up 9.4% and digitally-enabled comparable sales surging 23.3%, despite one fewer shopping day versus last year.
A week later, on April 15, Costco’s board raised its quarterly dividend from $1.30 to $1.47 per share, payable May 15.
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Is Costco Undervalued Today?
At $999.89, Costco trades at 46.96 times next-twelve-month earnings. The case for paying up rests on the membership model. Costco generated $5.3 billion in membership fee revenue in fiscal 2025, with renewal rates holding above 92% in the United States and Canada following its first fee increase in seven years.
Almost all of that fee income flows directly to the bottom line, which is what allows a retailer running on 12.9% gross margins to compound earnings consistently. The forward two-year revenue CAGR is estimated at 8.2%, and consensus sees free cash flow growing from around $8.3 billion in fiscal 2026 to around $8.5 billion in fiscal 2027.
The risk is also real. Worldwide membership renewal rates slipped modestly to 89.8%, with the U.S. and Canada falling to 92.3%, as digitally acquired members who renew at slightly lower rates entered the calculation.
If that softening continues, it chips away at the earnings quality story that underpins the premium. And Costco’s commitment to passing tariff savings to members, while strategically valuable, limits how much cost relief can reach the bottom line. LTM EBIT margin is 3.8%, and meaningful expansion from here will take sustained execution.
The larger concern for buyers today is multiple compression. The NTM P/E has already fallen from 57.92x in February 2025 to 46.96x today. But at close to 47 times forward earnings, any stumble on membership trends, a guidance miss, or a broader market de-rating could outweigh years of underlying earnings growth in a single quarter.
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TIKR Advanced Model Analysis
- Current Price: $999.89
- TIKR Target Price (Mid): ~$1,410
- Potential Total Return: ~41%
- Annualized IRR: ~8% / year
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The TIKR mid-case model targets around $1,410 per share by August 31, 2030, the end of Costco’s fiscal year 2030, implying roughly 41% total return at an annualized rate of about 8% per year. The two revenue drivers are warehouse expansion into underpenetrated international markets, where March comps ran above 11% internationally versus 8.7% in the U.S., and sustained same-store sales growth as Costco’s value proposition draws traffic in a tight consumer environment. The margin driver is a gradual improvement in net income margins toward around 3%, as membership fee income grows faster than merchandise revenue.
The primary risk is multiple compressions. A reversion from today’s 46.96x NTM P/E toward historical lows would erase several years of earnings growth. This is not a stock where the model carries you if sentiment turns.
Conclusion
Watch the Q3 FY2026 earnings report, confirmed for May 28, 2026. The number to track is the worldwide membership renewal rate. If it holds above 89.5% despite the continued influx of digital sign-ups, the multiple is defensible. If it slips further, the valuation debate will sharpen.
Costco is not cheap. But it is a business compounding membership income and digital sales in an environment actively pushing consumers toward value. The TIKR mid-case puts ~8% annual returns on the table from today’s price, which is a fair deal for the quality, as long as the membership flywheel keeps turning.
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Should You Invest in Costco?
The only way to really know is to look at the numbers yourself. TIKR gives you free access to the same institutional-quality financial data that professional analysts use to answer exactly that question.
Pull up Costco, and you’ll see years of historical financials, what Wall Street analysts expect for revenue and earnings in the quarters ahead, how valuation multiples have moved over time, and whether price targets are trending up or down.
You can build a free watchlist to track Costco alongside every other stock on your radar. No credit card required. Just the data you need to decide for yourself.
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
