Key Points
-
Costco’s ability to report consistent financial performance in any macro scenario reduces risk for investors.
-
Management’s focus on warehouse expansion supports higher revenue and earnings down.
-
The market always seems to assign a high valuation multiple to Costco, but the stock is more expensive than peers and the overall market.
- 10 stocks we like better than Costco Wholesale ›
Investors should aim to regularly view their portfolios with a fresh perspective. It’s always a good idea to think about what moves to make, deciding whether certain companies remain solid long-term opportunities. Looking at which businesses deserve to be let go is also critical.
Even Costco Wholesale (NASDAQ: COST), a blue chip stock whose shares have produced a total return of 188% in five years (as of Feb. 3), isn’t immune from a reassessment. Should you buy, sell, or hold the retailer in 2026?
Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue »
Image source: Getty Images.
No complaints with the fundamentals
These days, investors have a lot to think about. The impact artificial intelligence will have on industries and the economy is a top focus. Trade policies, ongoing geopolitical tensions between the U.S. and other countries, rising federal debt, and weak consumer confidence also add uncertainty to the mix.
But Costco continues to shine. It seems that this company can handle whatever happens in the macro environment. Costco keeps posting solid same-store-sales growth like clockwork. Last fiscal quarter (the first quarter of fiscal 2026, ended Nov. 23, 2025), traffic was up 3.1%, clearly an encouraging trend when it seems that consumers are pulling back on their spending.
Add same-store sales growth to a constantly expanding physical footprint, and it supports Costco’s durable revenue gains. Analysts expect the top line to increase at a compound annual rate of 7.6% between fiscal 2025 and fiscal 2028. The growth should still be happening far into the future. That’s because management explicitly stated its goal of eventually getting to at least 30 net new warehouse openings per year. The business is expected to open 28 net new stores in fiscal 2026.
The market always places a premium on this business
Right now, Costco shares are trading 8% below their peak. But the investment community has bid up the stock 15% just in 2026. This points to an obvious truth, which is that the market always seems to place a premium on this business. That’s understandable, given that Costco isn’t a high-risk holding and that it has predictable financial performance and staying power.
Costco shares currently trade at a price-to-earnings ratio of 52.9. This is 106% more expensive than the S&P 500 index. And it represents 18% and 138% premiums, respectively, to competitors Walmart and BJ’s Wholesale. Based on this popular valuation metric, Costco is also 57% more expensive than e-commerce company Amazon.
I don’t think Costco stock is a buy right now. Furthermore, if you’re an existing shareholder, I don’t think it’s time to be a seller, either. The company is performing well from a fundamental perspective, so it makes sense to hold.
Should you buy stock in Costco Wholesale right now?
Before you buy stock in Costco Wholesale, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Costco Wholesale wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004… if you invested $1,000 at the time of our recommendation, you’d have $431,111!* Or when Nvidia made this list on April 15, 2005… if you invested $1,000 at the time of our recommendation, you’d have $1,105,521!*
Now, it’s worth noting Stock Advisor’s total average return is 906% — a market-crushing outperformance compared to 195% for the S&P 500. Don’t miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
*Stock Advisor returns as of February 5, 2026.
Neil Patel has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon, Costco Wholesale, and Walmart. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
Key Points
-
Costco’s ability to report consistent financial performance in any macro scenario reduces risk for investors.
-
Management’s focus on warehouse expansion supports higher revenue and earnings down.
-
The market always seems to assign a high valuation multiple to Costco, but the stock is more expensive than peers and the overall market.
- 10 stocks we like better than Costco Wholesale ›
Investors should aim to regularly view their portfolios with a fresh perspective. It’s always a good idea to think about what moves to make, deciding whether certain companies remain solid long-term opportunities. Looking at which businesses deserve to be let go is also critical.
Even Costco Wholesale (NASDAQ: COST), a blue chip stock whose shares have produced a total return of 188% in five years (as of Feb. 3), isn’t immune from a reassessment. Should you buy, sell, or hold the retailer in 2026?
Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue »
Image source: Getty Images.
No complaints with the fundamentals
These days, investors have a lot to think about. The impact artificial intelligence will have on industries and the economy is a top focus. Trade policies, ongoing geopolitical tensions between the U.S. and other countries, rising federal debt, and weak consumer confidence also add uncertainty to the mix.
But Costco continues to shine. It seems that this company can handle whatever happens in the macro environment. Costco keeps posting solid same-store-sales growth like clockwork. Last fiscal quarter (the first quarter of fiscal 2026, ended Nov. 23, 2025), traffic was up 3.1%, clearly an encouraging trend when it seems that consumers are pulling back on their spending.
Add same-store sales growth to a constantly expanding physical footprint, and it supports Costco’s durable revenue gains. Analysts expect the top line to increase at a compound annual rate of 7.6% between fiscal 2025 and fiscal 2028. The growth should still be happening far into the future. That’s because management explicitly stated its goal of eventually getting to at least 30 net new warehouse openings per year. The business is expected to open 28 net new stores in fiscal 2026.
The market always places a premium on this business
Right now, Costco shares are trading 8% below their peak. But the investment community has bid up the stock 15% just in 2026. This points to an obvious truth, which is that the market always seems to place a premium on this business. That’s understandable, given that Costco isn’t a high-risk holding and that it has predictable financial performance and staying power.
Costco shares currently trade at a price-to-earnings ratio of 52.9. This is 106% more expensive than the S&P 500 index. And it represents 18% and 138% premiums, respectively, to competitors Walmart and BJ’s Wholesale. Based on this popular valuation metric, Costco is also 57% more expensive than e-commerce company Amazon.
I don’t think Costco stock is a buy right now. Furthermore, if you’re an existing shareholder, I don’t think it’s time to be a seller, either. The company is performing well from a fundamental perspective, so it makes sense to hold.
Should you buy stock in Costco Wholesale right now?
Before you buy stock in Costco Wholesale, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Costco Wholesale wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004… if you invested $1,000 at the time of our recommendation, you’d have $431,111!* Or when Nvidia made this list on April 15, 2005… if you invested $1,000 at the time of our recommendation, you’d have $1,105,521!*
Now, it’s worth noting Stock Advisor’s total average return is 906% — a market-crushing outperformance compared to 195% for the S&P 500. Don’t miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
*Stock Advisor returns as of February 5, 2026.
Neil Patel has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon, Costco Wholesale, and Walmart. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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