Costco Wholesale (COST) has come back into focus after a cluster of partner announcements, with Laifen, Jackery and Tick Solutions all choosing the membership retailer for new or exclusive product launches across U.S. warehouses and Costco.com.

Despite the fresh product partnerships and steady operational news, Costco Wholesale’s recent 90 day share price return is down 6.96%, while the year to date share price return is 9.51% and the 5 year total shareholder return is 133.38%. This suggests that longer term momentum has held up better than the latest quarter.

If Costco’s recent moves have you thinking more broadly about where growth and resilience might come from next, it could be worth scanning 18 top founder-led companies

After a sharp pullback, Costco Wholesale now sits about 15% below the average analyst price target, even as an internal fair value estimate screens as rich. Is the market correctly pricing caution, or is it underrating the membership engine?

Most Popular Narrative: 13.6% Undervalued

Costco Wholesale’s most followed narrative sets a fair value of $1,082.94 against a last close of $935.80, framing today’s pullback in the context of a higher long run earnings story.

Costco plans to continue expanding its warehouse locations, with 28 new openings planned for fiscal year 2025. This expansion is likely to increase membership and sales volume, driving revenue growth.

Want to see what sits behind that expansion plan and premium multiple? The narrative focuses on measured revenue growth, firmer margins, and a punchy future earnings multiple. The full breakdown shows how those ingredients are combined into one fair value path.

Result: Fair Value of $1,082.94 (UNDERVALUED)

However, Costco Wholesale’s story could be tested if higher labor and supply chain costs pressure its roughly 3% net margin, or if foreign exchange volatility weighs further on international earnings.

Another View: Costco Wholesale Through the Earnings Multiple Lens

While the Costco Wholesale narrative points to a fair value of $1,082.94, the earnings multiple picture looks less forgiving. The stock trades on a P/E of 47x, compared with 20.3x for the US Consumer Retailing industry, 23.6x for peers, and a fair ratio of 37x. This raises a simple question: how much premium are you really comfortable paying for this membership model?

Next Steps

If the mix of optimism and caution around Costco Wholesale has you on the fence, now is a good time to review the numbers yourself and stress test the story from different angles, then weigh Costco’s upside by checking its 2 key rewards

Looking for more investment ideas beyond Costco Wholesale?

If Costco has sharpened your focus on quality, do not stop here. Broader research can help you spot opportunities you might otherwise overlook across sectors and styles.

• Target higher quality at a fairer price by scanning 45 high quality undervalued stocks that combine solid fundamentals with more grounded expectations.
• Strengthen the income side of your portfolio by reviewing 9 dividend fortresses designed for investors who care about consistency as much as yield.
• Prioritize resilience and capital protection by checking 80 resilient stocks with low risk scores that screen well on financial strength and risk metrics.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.