The same scene can be found in almost every city when you walk into a Costco warehouse on a Saturday morning: long checkout lines that move surprisingly quickly, carts piled high with oversized olive oil bottles and Kirkland-branded merchandise, and a smell of rotisserie chicken that somehow draws customers toward the food court whether or not they intended to stop. It is almost purposefully unglamorous. However, the underlying stock, which is trading at about $996 per share on the Nasdaq under the ticker COST, is valued at about $441 billion. It’s not an error. That is what occurs when a company gains the loyalty of its clients over many years and then receives compensation in the stock market.
The figures supporting that valuation are really solid. Revenue for the fourth quarter of 2026 was $95.72 billion, an increase of 11.1% over the same period the previous year. Nearly every subscription business in the world would be envious of member renewal rates, which are close to 90%. Currently, the company has over 939 warehouse locations, and it continues to add about 25 to 30 new ones annually. Costco has continuously outpaced rivals like Walmart and BJ’s Wholesale in terms of revenue growth. More recently, analysts have pointed out that even Amazon appears to be less expensive than Costco on a price-to-earnings basis, which indicates how much investors value the Costco model.
Depending on how you look at it, that premium is also the stock’s biggest issue. Compared to Costco’s own 10-year historical median of about 38, a P/E ratio that is close to 48 is unsettling. There isn’t much of a friendlier forward earnings multiple. Since a lot of positive news has already been factored in at this price, some analysts have a consensus “Hold” rating at current levels rather than because there is a problem with the company. It’s possible that Costco should always charge a premium because membership companies with nearly flawless retention rates don’t appear out of thin air, but it takes a certain level of faith to pay a retailer almost fifty times their earnings.
However, the history of what owning the stock has actually required of people is what makes the Costco story truly fascinating. A $10,000 investment increased to roughly $65,000 over the previous ten years, more than doubling what the same amount of money would have generated in the S&P 500. However, investors had to withstand four consecutive drops of 20% or more in order to realize that return. In 2022, the stock fell 31.5% while the S&P 500 only fell 13.3%. Twelve-month sales actually increased during the entire drawdown, so the company did not falter during that decline. Even so, the stock dropped, and it took more than eighteen months for it to reach its previous high. It’s a long time to watch something lose nearly one-third of its value.
In the most recent test, which took place between February and December of 2025, Costco shares fell 21.1% while the market as a whole gained 12.5%. During that same period, sales increased by 8.3%. There was nothing damaged. Even patient investors are put to the test when they witness the stock decline while everything else rises. In May 2026, the shares finally reached their previous peak. However, Costco has fallen from a 52-week high of $1,096.50 and is currently trading roughly 10% below that peak.
It’s difficult to ignore the story’s recurring themes. The company remains stable. The stock sways. Long-term investors make a comeback. At almost $1,000 per share, Costco always asks you to honestly answer the question of whether you’re buying comfort or value before you enter.
