Costco Wholesale Corporation COST

Name: COST Crucible Score
Creator: Kaladin Capital Intelligence

Consumer DefensiveDiscount StoresNASDAQ📅 Scored March 7, 2026

Price at analysis: $974.86

Crucible Score

57.3

Quality × Value Composite

KQI — Quality

70.6

Fundamental Quality Index

KVI — Value

33.0

D-

Valuation Attractiveness Index

Crucible Verdict — COST

Costco Wholesale Corporation demonstrates solid operational quality with strong market position and growth prospects, but COST trades at a significant premium that creates an unfavorable risk-reward profile. The retailer's membership model provides durable competitive advantages, yet the stock's 11% overvaluation relative to base fair value limits upside potential. Investors should wait for a better entry point below $850.

— Kal, Kaladin Capital Intelligence

◆ KQI Quality Dimensions

Financial Quality

67.6

Growth Profile

73.4

Moat Durability⚠

73.7

Management Effectiveness

69.4

Diversification & Resilience

55.5

Market Position

72.0

Weakest dimension: Diversification & Resilience (55.5)

◆ KVI Value Dimensions

DCF Margin of Safety

38.1

FCF Yield & Cash Returns

27.7

Relative Valuation

38.3

Growth-Adjusted Value

19.9

Historical Valuation

40.8

Macro Context

30.6

◆ DCF Valuation Scenarios

Bear Case

$595.42

Base Case

$878.15

Bull Case

$1274.60

Price at Analysis

$974.86

Scenario	Fair Value	Rev CAGR (5yr)	Terminal Margin	WACC
🔴 Bear	$595.42	5.5%	3.4%	9.8%
🟢 Base	$878.15	7.5%	3.8%	9.3%
🟢 Bull	$1274.60	9.5%	4.2%	8.8%

Key Assumptions: Revenue growth anchored to 5-year CAGR of ~7% with operating margins in the 3.3%-4.2% range reflecting Costco's thin-margin, high-volume model. WACC derived from CAPM using 4.39% risk-free rate, 0.99 beta, and 5.0-5.5% ERP across scenarios. Capex intensity assumed at ~2% of revenue consistent with recent history, with D&A roughly offsetting maintenance capex over time.

◆ Financial Snapshot

Profitability

Gross Margin6.8%

Operating Margin3.8%

Net Margin3.0%

ROIC19.6%

ROE25.6%

Balance Sheet

Balance SheetCR: 1.06

Cash ConversionFCF/EPS: 1.06x

Capital IntensityCapex/Rev: 2.0%

Altman Z-Score9.40 (Safe)

Piotroski F-Score7/9 (Good)

Growth

Revenue CAGR8.9% CAGR

Earnings CAGR12.8% CAGR

Growth ConsistencyCV: 0.39

Segment Breadth7/7 growing (100%)

Quarterly TrendWC↓

Earnings CredibilityConsistent Beater

◆ Revenue Breakdown — FY2025

By Segment

Food and Sundries39.8%

Non-Foods25.9%

Other18.6%

Fresh Food13.8%

Membership1.9%

By Geography

Other International Operations100.0%

Total Revenue

$38.3B

Fiscal Year 2025

◆ Analyst Consensus & Leadership

Analyst Price Targets

Avg Target (Last Quarter)$1047.42

Analysts Covering (Quarter)19

Avg Target (Last Year)$1049.56

Analysts (Year)32

Leadership & Governance

CEORon Vachris · 2 years

CEO Ownership< 1%

Compensation90% performance-based

Insider ActivitySelling

Capital AllocationROIC 19.6% vs WACC 1.5%

Earnings Beat Rate88% (19/22)

◆ Company Profile

Costco Wholesale Corporation, together with its subsidiaries, engages in the operation of membership warehouses in the United States, Puerto Rico, Canada, the United Kingdom, Mexico, Japan, Korea, Australia, Spain, France, Iceland, China, and Taiwan. It offers branded and private-label products in a range of merchandise categories.

CEO

Ron Vachris

Employees

333000

Headquarters

Issaquah, WA, US

IPO Date

July 9, 1986

Exchange

NASDAQ

Website

costco.com

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Methodology All Scores Crucible Briefs Performance @KaladinCI

Analysis conducted March 7, 2026 based on most recent SEC filings. Updated quarterly, after new SEC filings.

Point-in-time fundamental analysis. Not investment advice. Scores reflect company quality and valuation at time of analysis and may not reflect current market conditions.