Stock analysis · Bull Rankings model

COST analysis

Costco Wholesale CorporationDiscount Stores. Scored on the same transparent model behind the daily rankings.

COST
Costco Wholesale Corporation · Discount Stores
FCF$7.8bB+
Rev+8.2%B
D/E0.60B+
P/E47.6xD
PEG4.64D
39.9Score
$947.74$420.3B
1Y Target$1,077Analyst consensus · 35 analysts
5Y Target$1,577Compound horizon
10Y Target$2,340Long-dated conviction
FCF$7.8bTTM
B+
FCF $7.8b — strong cash profile, above most peers
Rev+8.2%TTM YoY
B
Revenue +8.2% — at or above S&P median
D/E0.60
B+
D/E 0.60 — below the Consumer Defensive debt median (≈40th pctile)
P/E47.6x
D
P/E 47.6 — most expensive decile in Consumer Defensive (≈95th pctile)
PEG4.64
D
PEG 4.64 — very expensive; pricing in best-case scenarios

Forward price target — the 1-year figure is the analyst consensus where the stock is covered; the 5- and 10-year figures compound our earnings estimate from there. The DCF below is a separate cross-check on intrinsic value (what it's worth today), not another target.

Quality-growth score · 39.9
Quality75.7
Growth72.5
Value11.6
Why this score
  • Raising its dividend
  • Durable high returns
Entry · Margin of safety
52-week rangeMid-range
14% off the 12-month high
vs DCF fair value177% aboveest. fair value ~$343
What the price assumes: free cash flow compounding at ~33% a year for the next decade — vs the ~10% a year our model projects from current growth and analyst estimates.
Quality signals · context only
Gross profitability41% · A-gross profit ÷ total assets (Novy-Marx)
ROIC20.9% · Areturn on invested capital — not score-weighted

Model-generatedGenerated by the Bull Rankings model from this company's reported fundamentals, and checked against the figures shown above.

Why now
Discount Stores · market cap $420.3b. 14% off the 52-week high of $1096.50. 35 sell-side analysts rate this a Buy with a mean 1-yr target of $1,077 (implying +14% upside).
Moat
ROE 24% sits above Buffett's preferred 15% threshold — the equity base is compounding at a rate the market struggles to discount accurately. FCF converts 97% of net income — earnings translate cleanly into cash, a sign that working capital and capex are well-disciplined. $420.3b market cap places it among the largest companies in the sector — distribution, R&D, and customer-acquisition costs amortize across a base peers can't replicate.
Risk
Trailing P/E 48x sits well above the S&P median (~20x) — multiple compression is a real risk if revenue growth decelerates. Net margin 2.9% is thin — operating leverage cuts both ways; input-cost inflation or pricing pressure hits the bottom line first.
Horizon
1-3 yr $1,077 (35-analyst consensus) — fundamentals + valuation re-rating. 5 yr $1,577 at ~11% CAGR — compounding case rests on the competitive position widening. 10 yr $2,340 if current growth sustains into durable earnings power.
Not investment advice. The Bull Rankings publishes a quantitative ranking model and accompanying analysis for general informational purposes only. Nothing on this page is a recommendation to buy, sell, or hold any security; nothing is personalized to your circumstances, risk tolerance, or tax situation. Investing carries the risk of loss — invest at your own risk and consider consulting a licensed financial professional before acting on anything you read here. See terms and methodology for full disclosures.

COST vs the Top Picks average

PillarCOSTBook avgDiff
Quality0.760.84-0.08
Growth0.720.84-0.11
Value0.120.78-0.67

Averaged across the 30 names in today's Top Picks (mean score 81.5). A name can beat these averages and still be absent from the book — it also applies concentration limits.

Trend
-0.5 over 47 daily scores
From 40.4 (Jun 22) → 39.9 (now)

One point per daily model run. The range autoscales, so a flat-looking line can still hide 1–2 point moves — read the From → To values for the actual range.

Analyst estimate revisions

30-day change+0.1%
90-day change+0.2%
Forward EPS estimate$22.66

Over the last 90 days, what analysts expect COST to earn is essentially unchanged. The estimate is derived from price and forward P/E captured at the same instant, so a moving share price does not move this number — only a changed forecast does.

A rising estimate means expectations are improving, not that the price has failed to keep up — and estimates get cut as readily as they get raised. It is not part of the Bull Rankings score. Biggest movers across the market →

Shares to buy
2
Position size
$1,895
3.8% of portfolio
Stop price
$710.81
25% below $947.74
$ at risk if stopped
$473.87
budget $500.00 · 1% of portfolio

Math only — share count is floor(portfolio × risk% ÷ (price × stop%)). Doesn't account for commissions, slippage, gap risk, or position-correlation across your book. Inputs persist locally; never sent to the server. Not investment advice.

Costco Wholesale Corporation (COST): score, valuation & FAQ

Costco Wholesale Corporation (COST) is a Discount Stores company that scores 39.9 out of 100 on the Bull Rankings quality-growth model — a below-average reading. The score blends three pillars — quality (durable returns, healthy margins, low leverage), growth (revenue and earnings), and value (valuation versus sector peers) — into one number, refreshed daily; it is a screen, not a buy recommendation.

Its strongest graded signals are FCF (B+) and D/E (B+), while P/E (D) and PEG (D) rate weaker. On valuation, COST sits about 177% above our discounted-cash-flow fair value — the current price implies roughly 33% annual free-cash-flow growth over the next decade.

Is COST a good stock to buy?

Bull Rankings scores COST 39.9 out of 100 on its quality-growth model, which is a below-average reading. That is driven by FCF (B+) and D/E (B+). A score is a quantitative screen of Costco Wholesale Corporation's fundamentals, not personalised financial advice — weigh it against your own time horizon and risk tolerance, and read the risk factors below before acting.

Why does COST score 39.9 on Bull Rankings?

The quality-growth score blends three pillars — quality (returns on capital, margins, leverage, earnings quality), growth (revenue and earnings expansion), and value (valuation versus sector peers). COST earns its highest marks on FCF (B+) and D/E (B+), and is held back by P/E (D) and PEG (D). Each pillar is graded against sector-aware thresholds, then combined into the single 0–100 score.

Is COST overvalued or undervalued?

Based on $947.74, COST sits about 177% above our discounted-cash-flow fair value — the current price implies roughly 33% annual free-cash-flow growth over the next decade. It trades at a 47.6x P/E (graded D). Discounted-cash-flow estimates are sensitive to growth and discount-rate assumptions, so treat this as a cross-check, not a price target.

What are the main risks of investing in COST?

Trailing P/E 48x sits well above the S&P median (~20x) — multiple compression is a real risk if revenue growth decelerates. Net margin 2.9% is thin — operating leverage cuts both ways; input-cost inflation or pricing pressure hits the bottom line first.

New to these metrics? The guides explain free cash flow, how the score works, and more in the learn hub — or run another name through the screener.

Bull Rankings is an automated fundamentals screen for research and education. It is not investment advice, and nothing here is a recommendation to buy or sell any security. Do your own research and consider consulting a licensed financial advisor.

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