Costco’s Performance and Valuation Concerns
Costco Wholesale (NASDAQ: COST) reported total revenue of $67 billion for the first quarter of fiscal 2026, which ended on November 23, 2025. This marks an 8% growth compared to the previous year, while net income rose to $2 billion, an 11% increase. Despite strong international performance and a robust business model, Costco’s current price-to-earnings (P/E) ratio stands at approximately 54, significantly higher than competitors such as Walmart at 45 and Amazon at 28.
Investment analysts have expressed skepticism about Costco’s high valuation, citing its limited profit growth. The company’s P/E ratio has not dipped below 30 since 2019, raising concerns about the attractiveness of its stock for new investors. As it stands, Costco’s valuation, combined with moderate growth patterns, has led some experts to recommend looking for alternatives with fairer valuations.
