Costco’s Stock Has a Problem: It’s Almost Too Good

Costco’s Stock Has a Problem: It’s Almost Too Good

Vandita Jadeja

Tue, August 11, 2026 at 8:00 PM GMT+3 4 min read

Quick Read

• Costco earns a BUY with 90% confidence and a $1,023 target, but at 48x earnings, only 7% upside remains.

• Costco trades at 48x earnings versus Walmart's 41x but grows revenue nearly twice as fast, while BJ's 90% renewal rate validates the membership model.

• It sounds nuts, but SoFi1 is giving new Active Invest users up to $3,000 in stock for a limited time, and all it takes is a $50 deposit to get started.2 See for yourself (Sponsor)

My 24/7 Wall St. price target for Costco (NASDAQ:COST) lands at $1,022.62, a modest step up from today's $952.75. The model rates COST a buy with 90% confidence, but upside is narrow. Costco executes at an elite level, and the market already knows it.

24/7 Wall St. Price Target Summary

A Flat Year Hiding a Strong Business

Costco shows stellar fundamentals meeting stalled price action. The stock is up 10.97% year to date but down 2.31% over the last year, trading about 2% below its 52-week high of $1,094.76 and well off the $840.35 low.

Fiscal Q3 2026, reported May 28, 2026, delivered EPS of $4.93 on revenue of $70.527 billion, up 11.58% year over year, with net income rising 15.19%. Comparable sales grew 9.8%, digital comps jumped 21.5%, and the worldwide membership renewal rate held at 89.7%.

The Case for $1,129 and Higher

Bulls have real ammunition. Our bull scenario points to $1,129.73, or an 18.58% total return. Membership fee income compounds at a 10.7% to 14.0% pace, executive membership penetration has climbed to 75% of sales, and e-commerce traffic surged 37% last quarter.

Warehouse count targets 940 by fiscal year-end. The Street's consensus target of $1,077.31, backed by 4 Strong Buy and 19 Buy ratings, reflects that conviction.

SoFi Active Invest is offering a limited-time promotion. Open an account, fund it with $50 or more, and you could receive up to $3,000 in complimentary stock for Active Invest accounts. See for yourself by clicking here now. (Sponsor)

What Could Go Wrong

The bear case takes COST to $942.73, a 1.05% loss. At a trailing P/E of 48 and a PEG of 5, valuation leaves no margin for a soft quarter. Tariff pressure, FX volatility, and rising wages remain live risks flagged in the 10-Q. Insider activity has skewed to selling.

Heavy capex on warehouses and distribution suppresses near-term free cash flow, though Costco's 29.1% return on equity argues reinvestment earns its keep.

How Costco Compares to Walmart and BJ's

Walmart (NYSE:WMT) is the direct scale comp. WMT trades at a P/E of 41 with a market cap of $896.56 billion, growing revenue at 6.1% in Q1 FY2027. Costco trades at a P/E of 48 while growing revenue nearly twice as fast, supporting the premium.

BJ's Wholesale Club (NYSE:BJ) is the closest membership-model peer. BJ posted 9.86% revenue growth in Q1 FY2027 with a 90% tenured member renewal rate, on a market cap of $12.28 billion. The membership economics validate Costco's model, but BJ's smaller footprint underscores why COST commands scarcity value.

Quality Compounder at a Full Price

The 24/7 Wall St. price target of $1,022.62 is a buy with 90% confidence, but 7.33% upside is modest. Membership fee income and renewal rates form retail's closest subscription moat.

The 200-day moving average sits near $958.09, a level worth watching. Key signals to monitor include comp sales growth holding above 5% and continued margin expansion.

Extending the model assumes current comp-sales momentum and membership economics persist.

These assume roughly 30 warehouses annually and renewal rates near 90%. Digital penetration gains offer upside, while tariff shocks or membership fatigue could compress multiples toward the bear-case $1,066.95 five-year outcome.

Want Up To $3,000 In Stock? SoFi Is Giving New Active Invest Users Complimentary Stock

Looking to grow your money but unsure where to begin? SoFi Active Invest is offering a limited-time promotion—open a new Active Invest account, fund it with $50 or more, and you could receive up to $3,000 in complimentary stock.

From $0 commission trading3 to fractional shares4 and automated investing, this app is designed to simplify investing for everyone, whether you're just starting or already experienced. Its easy to sign up and secure your bonus.(Sponsor)

Contact editorial@247wallst.com for any questions or corrections.