Read This Before Buying Costco Stock for the Long Term​

• Costco sells astatine 50 times earnings, acold supra its retailing rivals.

• Financially, it consistently delivers coagulated but mean net growth.

• 10 stocks we similar amended than Costco Wholesale ›

Few tin quality that Costco (NASDAQ: COST) is 1 of the astir coagulated retailers successful existence. As of the extremity of the archetypal 4th of fiscal 2026 (ended Nov. 23, 2025), it operated 921 warehouses successful 14 countries.

Unfortunately, the banal earned nary nett gains implicit the past twelvemonth contempt its successes. That apt means that until the marketplace addresses 1 cardinal situation with Costco stock, it is improbable to beryllium a bully prime for investors; here's why.

For now, investors should refrain from adding Costco shares due to the fact that it cannot warrant its valuation.

Indeed, Costco is simply a palmy retailer. Unfortunately for caller shareholders, its occurrence is simply a known quantity, which is astir apt wherefore it presently trades astatine a P/E ratio of astir 50. Although investors often wage a akin premium oregon higher for immoderate of the faster-growing stocks, fast-growing does not presently picture Costco's financials.

In fiscal Q1, Costco earned much than $67 cardinal successful revenue, an 8% summation from year-ago levels. During that time, the summation successful costs and expenses lagged the complaint of gross growth. Thus, its $2 cardinal successful nett income for the 4th roseate 11%.

That show is connected par with Costco's past performance, arsenic the institution grew its profits by 10% successful fiscal 2025. It is besides a coagulated performance, but it is arguably not 1 that justifies paying 50 times earnings, peculiarly erstwhile investors person different choices.

One of those choices is Amazon, which was agelong a much costly banal but present trades astatine 35 times earnings. Its largest U.S. rival, Sam's Club genitor Walmart, sells astatine a P/E ratio of 40, though it did turn profits much dilatory erstwhile not including a one-time benefit.

Amid specified valuations, 1 could besides marque a lawsuit for buying Target astatine 13 times net contempt its declining sales. In contrast, investors are improbable to find Costco banal successful the bargain bin. Its grounds debased P/E was 14, which occurred backmost successful 2009.

As for whether to springiness up connected Costco stock, the reply is possibly.

Costco banal is technically a buy, adjacent nether existent conditions. Unfortunately, the premium successful the banal leaves investors paying a precocious terms for middling returns.

Moreover, adjacent if the marketplace endures different fiscal situation and Costco banal becomes little expensive, the banal could inactive beryllium costly compared to different concern opportunities.