What is COST's intrinsic value?

TickerWorth's blended fair value for Costco Wholesale Corporation (COST) is $328.61 per share, versus a market price of $989.11 (201% above fair value).

Is COST overvalued or undervalued?

On our blended fair value COST looks overvalued vs fair value at $989.11. This is an educational estimate, not advice.

What discount rate is used for COST?

A WACC of 9.4% and a terminal growth rate of 2.5%.

Is Costco Wholesale stock undervalued?

TickerWorth's fair value for Costco Wholesale Corporation (COST) is $328.61 against a market price of $989.11. Our read: 201% above fair value. This is a model estimate, not investment advice.

Costco Wholesale (COST) DCF valuation and fair value

Our fair value for Costco Wholesale Corporation (COST) is $328.61, built on a 9.4% discount rate (WACC) and 2.5% terminal growth. It blends our discounted-cash-flow model with other valuation lenses. Every assumption is listed on this page with its source.

Costco Wholesale (COST) insider trading

We have no recent SEC Form 4 insider filings on file for Costco Wholesale Corporation (COST). Form 4 covers US-listed companies only.

COST · Intrinsic value

Is Costco Wholesale Corporation (COST) overvalued or undervalued?

Name: Costco Wholesale Corporation (COST) DCF intrinsic value
Creator: TickerWorth

Costco Wholesale Corporation (COST) trades at the delayed market price of $989.11 a share. That price already implies revenue growth of more than 25%/yr. TickerWorth's fair value is $328.61 a share (201% above fair value), as of Oct 19, 2026. It is a model estimate, and every input behind it is sourced below.

Model by Miraaj Patel · generated from a hand-researched model · Updated Oct 19, 2026 · How these pages are made

Open full COST analysis

Is COST overvalued?

Fair value: $328.61
Market price: $989.11
Downside to fair value: 66.8%
Verdict: 201% above fair value

Price as of 19 Oct 2026, 13:16 UTC · Prices are delayed.

Fair value against the delayed market price: 201% above fair value.

Reverse DCF: Today's price implies revenue growth of more than 25%/yr. Above about 25% a year the reverse-DCF stops being informative. It solves for revenue growth alone — holding margins, capital intensity and the forecast horizon fixed — so a price well above our cash-flow model's value has nowhere to go but growth, and the solver returns a rate the model can't reconcile. Read it as "the price implies growth we can't justify", not as a forecast.

What is COST's TickerWorth Score?

F37/100

Far above our estimate — the business scores well

Compared with Consumer Defensive companies in US

Its strongest point: strong balance sheet. Its weakest: looks expensive on the numbers.

Value · 18 of 100
Cheaper than 18% of Consumer Defensive companies in US
Price vs worth · 0 of 100
Quality · 31 of 100
More profitable than 31% of Consumer Defensive companies in US
Financial health · 84 of 100
Financially stronger than 84% of Consumer Defensive companies in US
Growth · 60 of 100
Growing faster than 60% of Consumer Defensive companies in US
Momentum · 50 of 100
Outperformed 50% of Consumer Defensive companies in US over the past year

Confidence: High confidence · Scored 19 Oct 2026, 13:16 UTC

Get the Undervalued Company of the Week.

Where the numbers come from

Hand-researched model

What the modeller flagged

TIMING — THE MODEL IS A YEAR BEHIND THE CALENDAR, AND THAT MAKES IT CONSERVATIVE. Year 1 is FY2026, which ended 2026-08-30, yet the engine discounts it (and every later year) as if it were still a year away. Re-running the same economics with FY2026 as the base, FY2027-31 as the forecast and the guided $7.5B FY2027 capex gives ~$317/share instead of $302.31. Partly offsetting: FY2026's cash build already sits in the August 2026 net cash, so a little of Year 1 is counted twice. Net, the value is understated by roughly 5%; the FY2026 10-K re-base removes the lag.
TERMINAL VALUE IS ~74% OF ENTERPRISE VALUE — just under the 75% line, but the five explicit years still carry only about a quarter of the answer. This is a valuation of Costco's steady state. Sensitivity across WACC +/-1.5pt and terminal growth +/-1pt runs ~$235-445.
THE MODEL DISAGREES WITH THE MARKET BY A LOT, AND THAT IS THE FINDING, NOT A BUG. At $920.65 Costco trades at ~44x trailing earnings. On the house discount rate (5.24% Treasury + 0.855 x 5% ERP = 9.4%) and a 2.5% perpetuity, the model values Costco at ~14.6x FY2026 net income. To reach the price you need ~7.6% growth FOREVER, or an 11.2% operating margin (three times today's, and against Costco's own pricing philosophy), or ~30% revenue growth a year for five years — and no beta gets there, not even zero. The market is pricing a decades-long runway the house perpetuity convention does not grant any company.
YEAR-1 FCF IS ~19% BELOW THE LAST REPORTED FCF ($6.4B modeled for FY2026 vs $7.8B reported for FY2025) — under the 20% line, but ~32% below the $9.4B Costco actually reported for FY2026, so explained: stock compensation (~$0.9B) stays a cost here, interest income (~$0.7B) is excluded from EBIT and captured in net cash instead, and the model's working-capital inflow (5% of revenue growth, ~$1.4B) is smaller than the $2.3B Costco actually collected.
CAPEX IS SET AT 1.75% OF REVENUE FOR YEARS 2-5 AND THE TERMINAL YEAR — BELOW MANAGEMENT'S PLAN. FY2027 is guided at ~$7.5B (~2.3%); the model carries ~$5.7B. The lower figure is chosen for the perpetuity (reinvestment consistent with 2.5% growth at a return on new capital equal to WACC); the near-year shortfall is worth ~$11/share and is disclosed rather than hidden. Holding 2.2% throughout gives $254.06.
FINANCE-LEASE LIABILITIES ($1,479M) are from the FY2025 10-K, a year older than the rest of the net-debt figure; the FY2026 10-K will update them. Immaterial (~$3/share).
SBC of $924M (0.3% of revenue) is expensed inside reported operating income and is not added back; dilution is captured by the weighted-diluted count, which buybacks hold flat.

COST DCF valuation: what the price assumes

At a recent price of $989.11, Costco Wholesale Corporation (COST) trades 201% above TickerWorth's blended fair value of $328.61 per share — a discounted-cash-flow model cross-checked against peer multiples and asset value — meaning the market currently prices COST overvalued vs our estimate of what the business is intrinsically worth. Our fair value sits below the market, an implied -66.8% move to close the gap if the business performs in line with our assumptions. This is an educational model, not a price target or a recommendation — the value moves with the inputs, which you can test yourself using the WACC slider below.

Read the full reasoning

One of the lenses behind that blended figure is a discounted-cash-flow model, which on its own values COST at about $302.31 per share. The rest of this page walks through that DCF — its assumptions, reverse-DCF and discount-rate sensitivity — because it is the auditable anchor of the blend.

The valuation discounts Costco Wholesale Corporation's projected free cash flows at a weighted-average cost of capital (WACC) of 9.4%, with a long-run terminal growth rate of 2.5%. About 74% of the enterprise value comes from the terminal value — the portion beyond the explicit forecast window — which is typical for a stable, cash-generative business and a reminder that small changes in the discount rate or terminal growth assumption swing the intrinsic value meaningfully.

Running the DCF in reverse — solving for the growth the current price already assumes — COST would need sustained revenue growth of more than 25%/yr to justify today's price, against about 7.4% a year compounded in our base case. We don't quote a precise figure here, because past about 25% a year the reverse-DCF stops being informative: it solves for revenue growth alone, holding margins, capital intensity and the forecast horizon fixed, so a price well above our fair value has nowhere to go but growth. The honest reading is that the price implies growth this model can't reconcile — not that we forecast it.

Sensitivity matters more than any single number. Across a reasonable band of discount-rate assumptions, COST's modeled DCF value ranges from about $234.87 to $445.27 per share. If that range still sits below today's price, the market is optimistic relative to the model across the whole band; if it brackets the price, the stock is roughly fairly valued on our assumptions. Use the interactive slider to see exactly where your own cost-of-capital view lands.

How to read this page: the DCF fair value is what Costco Wholesale Corporation would be worth if its cash flows grow as modeled and are discounted at the stated WACC. The assumptions table shows every input and its source; the reverse-DCF shows what the market believes; the sensitivity band shows how fragile the answer is. None of this is investment advice — it is a transparent, auditable framework for forming your own view of COST's intrinsic value. Figures update as new filings and prices come in.

Every input behind COST's DCF

Input	Value	Source
Base-year revenueCostco FY2025 10-K (accession 0000909832-25-000101, filed 2025-10-08), 52 weeks ended 2025-08-31: Total revenue = net sales $269,912M + membership fees $5,323M (us-gaap:Revenues FY2025 = $275,235M). +8.2% on FY2024's $254,453M, and FY2024 was a 53-WEEK year, so the like-for-like 52-week growth was higher still. WHY FY2025 AND NOT FY2026: the FY2026 10-K is NOT yet filed (submissions JSON checked 2026-10-03; Costco filed the FY2025 10-K on 2025-10-08, so FY2026's is due within days). The house rule is that the base year needs a filed 10-K, so FY2025 is the base and the already-completed FY2026 is Year 1 of the forecast, read off the unaudited Q4 release. CROSS-CHECK: FY2026 total revenue was $303,154M (8-K Ex-99.1, 2026-09-24), +10.1% — that is Year 1, not a projection.	$275,235,000,000	Costco FY2025 10-K (accession 0000909832-25-000101, filed 2025-10-08), 52 weeks ended 2025-08-31: Total revenue = net sales $269,912M + membership fees $5,323M (us-gaap:Revenues FY2025 = $275,235M). +8.2% on FY2024's $254,453M, and FY2024 was a 53-WEEK year, so the like-for-like 52-week growth was higher still. WHY FY2025 AND NOT FY2026: the FY2026 10-K is NOT yet filed (submissions JSON checked 2026-10-03; Costco filed the FY2025 10-K on 2025-10-08, so FY2026's is due within days). The house rule is that the base year needs a filed 10-K, so FY2025 is the base and the already-completed FY2026 is Year 1 of the forecast, read off the unaudited Q4 release. CROSS-CHECK: FY2026 total revenue was $303,154M (8-K Ex-99.1, 2026-09-24), +10.1% — that is Year 1, not a projection.
Base EBIT marginCostco FY2025 10-K (accession 0000909832-25-000101): Reported operating income $10,383M / total revenue $275,235M = 3.772%. Costco reports an operating-income line, so nothing here is derived. THE PROFIT ENGINE IS THE MEMBERSHIP FEE: fees of $5,323M were 51% of FY2025 operating income, and $5,907M was 51% of FY2026's $11,685M. Merchandise is sold at a gross margin of roughly 11% that just about covers SG&A; the fee is close to pure profit. That is why a 3.8% margin is not a weak business — it is a deliberate price cap. Margin has climbed ~10bp a year: 3.65% FY2024, 3.77% FY2025, 3.85% FY2026. CROSS-CHECK (Q4 FY2026, 16 weeks): $3,801M / $95,723M = 3.97%, flattered by IEEPA tariff refunds of $174M (plus $10M interest) less partial reinvestment in price — management sized the net benefit at $0.15 per diluted share.	3.8%	Costco FY2025 10-K (accession 0000909832-25-000101): Reported operating income $10,383M / total revenue $275,235M = 3.772%. Costco reports an operating-income line, so nothing here is derived. THE PROFIT ENGINE IS THE MEMBERSHIP FEE: fees of $5,323M were 51% of FY2025 operating income, and $5,907M was 51% of FY2026's $11,685M. Merchandise is sold at a gross margin of roughly 11% that just about covers SG&A; the fee is close to pure profit. That is why a 3.8% margin is not a weak business — it is a deliberate price cap. Margin has climbed ~10bp a year: 3.65% FY2024, 3.77% FY2025, 3.85% FY2026. CROSS-CHECK (Q4 FY2026, 16 weeks): $3,801M / $95,723M = 3.97%, flattered by IEEPA tariff refunds of $174M (plus $10M interest) less partial reinvestment in price — management sized the net benefit at $0.15 per diluted share.
Forecast revenue growthESTIMATEAssumption — TickerWorth's 5-year explicit forecast	10% → 8% → 7% → 6% → 6%	ESTIMATEAssumption — TickerWorth's 5-year explicit forecast
Risk-free rateUS 10Y Treasury constant maturity (FRED DGS10): 5.24% on 2026-10-01, the latest published observation. Shared by every model in this tracker.	5.2%	US 10Y Treasury constant maturity (FRED DGS10): 5.24% on 2026-10-01, the latest published observation. Shared by every model in this tracker.
BetaYahoo Finance 5Y-monthly beta via yfinance, read 2026-10-03: Published 5Y-monthly beta 0.855, used AS IS — no normalization. A warehouse club selling staples, fuel and pharmacy to members who renew at ~90% is a genuinely defensive business, and there is no spin-off, recapitalization or one-off event in the window that would distort the regression. Each 0.1 of beta is worth roughly $20/share. NB the reverse DCF: NO beta reaches today's price — even a beta of zero (WACC = 5.22%, essentially the risk-free rate) leaves the model below $920.65.	0.85	Yahoo Finance 5Y-monthly beta via yfinance, read 2026-10-03: Published 5Y-monthly beta 0.855, used AS IS — no normalization. A warehouse club selling staples, fuel and pharmacy to members who renew at ~90% is a genuinely defensive business, and there is no spin-off, recapitalization or one-off event in the window that would distort the regression. Each 0.1 of beta is worth roughly $20/share. NB the reverse DCF: NO beta reaches today's price — even a beta of zero (WACC = 5.22%, essentially the risk-free rate) leaves the model below $920.65.
Terminal growthESTIMATEAssumption — house default: House default 2.5% (roughly long-run nominal GDP), kept for comparability with every other company in this tracker. FLAG: this is a LOW number for Costco specifically — it has compounded revenue at high single digits for decades and still adds ~3% to its warehouse count every year, with international (Japan, Korea, Europe, China) under-penetrated. But a perpetuity has to sit below the economy's growth rate eventually, and the house rule is not bent company by company. 3.0% adds ~$17/share ($319.09); 2.0% takes ~$15 off ($287.80). The price needs ~7.6% forever. Must remain < WACC of 9.42%.	2.5%	ESTIMATEAssumption — house default: House default 2.5% (roughly long-run nominal GDP), kept for comparability with every other company in this tracker. FLAG: this is a LOW number for Costco specifically — it has compounded revenue at high single digits for decades and still adds ~3% to its warehouse count every year, with international (Japan, Korea, Europe, China) under-penetrated. But a perpetuity has to sit below the economy's growth rate eventually, and the house rule is not bent company by company. 3.0% adds ~$17/share ($319.09); 2.0% takes ~$15 off ($287.80). The price needs ~7.6% forever. Must remain < WACC of 9.42%.
Diluted sharesCostco Q4/FY2026 earnings release, 8-K Ex-99.1 (accession 0000909832-26-000084): Q4 FY2026 (16 weeks to 2026-08-30) weighted-average diluted shares 444,364K — the latest quarter, more recent than the Q3 10-Q's 444,430K. Full-year FY2026 was 444,427K. Shares outstanding were 443,266K at year end. The count is FLAT: buybacks ($848M in FY2026) roughly offset RSU issuance (SBC $924M), so dilution is not a meaningful drag here.	444M	Costco Q4/FY2026 earnings release, 8-K Ex-99.1 (accession 0000909832-26-000084): Q4 FY2026 (16 weeks to 2026-08-30) weighted-average diluted shares 444,364K — the latest quarter, more recent than the Q3 10-Q's 444,430K. Full-year FY2026 was 444,427K. Shares outstanding were 443,266K at year end. The count is FLAT: buybacks ($848M in FY2026) roughly offset RSU issuance (SBC $924M), so dilution is not a meaningful drag here.
Market priceDelayed quote · as of 2026-10-19 13:16 UTC	$989.11	Delayed quote · as of 2026-10-19 13:16 UTC

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What does Costco Wholesale Corporation do?

What does it do?

Costco Wholesale Corporation, together with its subsidiaries, engages in the operation of membership warehouses in the United States, Puerto Rico, Canada, Mexico, Japan, the United Kingdom, Korea, Australia, Taiwan, China, Spain, France, Sweden, Iceland, and New Zealand. It offers merchandise, including sundries, dry groceries, candies, coolers, freezers, liquor, and tobacco; non-food merchandise comprising consumer electronics, appliances, small electrics, health and beauty aids, hardware, lawn and garden, sporting goods, tires, toys and seasonal, automotive, stamps, tickets, apparel, furniture, domestics, housewares, special order kiosks, and jewelry; and fresh food, such as meat, produce, deli, and bakery products. It operates in the Discount Stores industry (Consumer Defensive sector), headquartered in United States. The company employs roughly 355,000 people.

How does it make money?

The business turns $303.2B in annual revenue into profit. Out of every $100 of sales, about $4 is left as operating profit (operating margin of 3.8%), after a 13% gross margin on the products/services it sells. After all costs, taxes and interest, 3.0% of revenue becomes bottom-line net profit.

Is it financially healthy?

Financially it looks solid: carries modest debt (0.3× equity), can just cover its short-term bills (1.1× current ratio), and is currently profitable.

COST insider trading

We have no recent SEC Form 4 insider filings on file for Costco Wholesale Corporation. Form 4 covers US-listed companies only.

Common questions

What is COST's intrinsic value?
TickerWorth's blended fair value for Costco Wholesale Corporation (COST) is $328.61 per share, versus a market price of $989.11 (201% above fair value).
Is COST overvalued or undervalued?
On our blended fair value COST looks overvalued vs fair value at $989.11. This is an educational estimate, not advice.
What discount rate is used for COST?
A WACC of 9.4% and a terminal growth rate of 2.5%.
Is Costco Wholesale stock undervalued?
TickerWorth's fair value for Costco Wholesale Corporation (COST) is $328.61 against a market price of $989.11. Our read: 201% above fair value. This is a model estimate, not investment advice.
Costco Wholesale (COST) DCF valuation and fair value
Our fair value for Costco Wholesale Corporation (COST) is $328.61, built on a 9.4% discount rate (WACC) and 2.5% terminal growth. It blends our discounted-cash-flow model with other valuation lenses. Every assumption is listed on this page with its source.
What growth is priced into Costco Wholesale stock?
Today's price implies revenue growth of more than 25%/yr. Above about 25% a year the reverse-DCF stops being informative. It solves for revenue growth alone — holding margins, capital intensity and the forecast horizon fixed — so a price well above our cash-flow model's value has nowhere to go but growth, and the solver returns a rate the model can't reconcile. Read it as "the price implies growth we can't justify", not as a forecast. This is a reverse DCF: it holds our cash-flow model's other inputs and solves for the revenue growth that makes the model equal today's price of $989.11. A model estimate, not investment advice.
Costco Wholesale (COST) insider trading
We have no recent SEC Form 4 insider filings on file for Costco Wholesale Corporation (COST). Form 4 covers US-listed companies only.