COST PE Ratio & Valuation,Is COST Overvalued

COST Relative Valuation

COST's fair value is calculated using relative valuation, based on historical P/E and P/S ranges and their premiums/discounts relative to a competitor average, adjusted by weights. If the market price exceeds this fair value range, COST is overvalued; if below, it's undervalued.

Historical Valuation

Costco Wholesale Corp (COST) is now in the Fair zone, suggesting that its current forward PE ratio of 41.56 is considered Fairly compared with the five-year average of 40.77. The fair price of Costco Wholesale Corp (COST) is between 730.76 to 973.31 according to relative valuation methord.

Relative Value

Fair Zone

730.76-973.31

Current Price：883.34

Fair

41.56

25.59

EV/EBITDA

Costco Wholesale Corp. (COST) has a current EV/EBITDA of 25.59. The 5-year average EV/EBITDA is 24.37. The thresholds are as follows: Strongly Undervalued below 14.84, Undervalued between 14.84 and 19.61, Fairly Valued between 29.14 and 19.61, Overvalued between 29.14 and 33.91, and Strongly Overvalued above 33.91. The current Forward EV/EBITDA of 25.59 falls within the Historic Trend Line -Fairly Valued range.

31.28

EV/EBIT

Costco Wholesale Corp. (COST) has a current EV/EBIT of 31.28. The 5-year average EV/EBIT is 30.51. The thresholds are as follows: Strongly Undervalued below 19.01, Undervalued between 19.01 and 24.76, Fairly Valued between 36.26 and 24.76, Overvalued between 36.26 and 42.01, and Strongly Overvalued above 42.01. The current Forward EV/EBIT of 31.28 falls within the Historic Trend Line -Fairly Valued range.

1.26

Costco Wholesale Corp. (COST) has a current PS of 1.26. The 5-year average PS is 1.12. The thresholds are as follows: Strongly Undervalued below 0.60, Undervalued between 0.60 and 0.86, Fairly Valued between 1.38 and 0.86, Overvalued between 1.38 and 1.64, and Strongly Overvalued above 1.64. The current Forward PS of 1.26 falls within the Historic Trend Line -Fairly Valued range.

28.90

P/OCF

Costco Wholesale Corp. (COST) has a current P/OCF of 28.90. The 5-year average P/OCF is 27.93. The thresholds are as follows: Strongly Undervalued below 14.87, Undervalued between 14.87 and 21.40, Fairly Valued between 34.46 and 21.40, Overvalued between 34.46 and 41.00, and Strongly Overvalued above 41.00. The current Forward P/OCF of 28.90 falls within the Historic Trend Line -Fairly Valued range.

67.30

P/FCF

Costco Wholesale Corp. (COST) has a current P/FCF of 67.30. The 5-year average P/FCF is 42.06. The thresholds are as follows: Strongly Undervalued below 18.94, Undervalued between 18.94 and 30.50, Fairly Valued between 53.63 and 30.50, Overvalued between 53.63 and 65.19, and Strongly Overvalued above 65.19. The current Forward P/FCF of 67.30 falls within the Strongly Overvalued range.

Costco Wholesale Corp (COST) has a current Price-to-Book (P/B) ratio of 12.52. Compared to its 3-year average P/B ratio of 13.94 , the current P/B ratio is approximately -10.22% higher. Relative to its 5-year average P/B ratio of 12.85, the current P/B ratio is about -2.58% higher. Costco Wholesale Corp (COST) has a Forward Free Cash Flow (FCF) yield of approximately 2.37%. Compared to its 3-year average FCF yield of 2.04%, the current FCF yield is approximately 16.15% lower. Relative to its 5-year average FCF yield of 2.29% , the current FCF yield is about 3.53% lower.

12.52

P/B

Median3y

13.94

Median5y

12.85

2.37

FCF Yield

Median3y

2.04

Median5y

2.29

Competitors Valuation Multiple

The average P/S ratio for COST's competitors is 2.15, providing a benchmark for relative valuation. Costco Wholesale Corp Corp (COST) exhibits a P/S ratio of 1.26, which is -41.54% above the industry average. Given its robust revenue growth of 8.30%, this premium appears unsustainable.

P/S

P/E

EV/EBITDA

EV/EBIT

Revenue Growth

Market Cap

Performance Decomposition

Market capitalization of COST decreased by 9.26% over the past 1 year. The primary factor behind the change was an increase in Revenue Growth from 62.15B to 67.31B.

The secondary factor is the Margin Expansion, contributed 2.77%to the performance.

Overall, the performance of COST in the past 1 year is driven by Revenue Growth. Which is more sustainable.

8.30%

62.15B → 67.31B

Revenue Growth

2.77%

2.89 → 2.97

Margin Expansion

-20.33%

57.45 → 45.77

P/E Change

-9.26%

979.88 → 889.10

Mkt Cap Growth

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Frequently Asked Questions

Is Costco Wholesale Corp (COST) currently overvalued or undervalued?

What is Costco Wholesale Corp (COST) fair value?

COST's fair value is calculated using relative valuation, based on historical P/E and P/S ranges and their premiums/discounts relative to a competitor average , adjusted by weights. The fair price of Costco Wholesale Corp (COST) is between 730.76 to 973.31 according to relative valuation methord.

How does COST's valuation metrics compare to the industry average?

What is the current P/B ratio for Costco Wholesale Corp (COST) as of Jan 07 2026?

As of Jan 07 2026, Costco Wholesale Corp (COST) has a P/B ratio of 12.52. This indicates that the market values COST at 12.52 times its book value.

What is the current FCF Yield for Costco Wholesale Corp (COST) as of Jan 07 2026?

As of Jan 07 2026, Costco Wholesale Corp (COST) has a FCF Yield of 2.37%. This means that for every dollar of Costco Wholesale Corp’s market capitalization, the company generates 2.37 cents in free cash flow.

What is the current Forward P/E ratio for Costco Wholesale Corp (COST) as of Jan 07 2026?

As of Jan 07 2026, Costco Wholesale Corp (COST) has a Forward P/E ratio of 41.56. This means the market is willing to pay $41.56 for every dollar of Costco Wholesale Corp’s expected earnings over the next 12 months.

What is the current Forward P/S ratio for Costco Wholesale Corp (COST) as of Jan 07 2026?

As of Jan 07 2026, Costco Wholesale Corp (COST) has a Forward P/S ratio of 1.26. This means the market is valuing COST at $1.26 for every dollar of expected revenue over the next 12 months.

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