Costco Wholesale Corporation
Costco Wholesale Corporation Fundamental Analysis
Costco Wholesale Corporation (COST.NE) shows moderate financial fundamentals with a PE ratio of 1.67, profit margin of 2.99%, and ROE of 28.87%. The company generates $8851.0B in annual revenue with moderate year-over-year growth of 8.17%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 68.2/100 based on profitability, valuation, growth, and balance sheet metrics. The C+ grade reflects average fundamentals, with notable risks in certain areas.
Fundamental Health Score
We analyze COST.NE's fundamental strength across five key dimensions:
Efficiency Score
ExcellentCOST.NE demonstrates superior asset utilization.
Valuation Score
ExcellentCOST.NE trades at attractive valuation levels.
Growth Score
ModerateCOST.NE shows steady but slowing expansion.
Financial Health Score
ExcellentCOST.NE maintains a strong and stable balance sheet.
Profitability Score
ModerateCOST.NE maintains healthy but balanced margins.
Key Financial Metrics
Is COST.NE Expensive or Cheap?
P/E Ratio
COST.NE trades at 1.67 times earnings. This suggests potential undervaluation.
PEG Ratio
When adjusting for growth, COST.NE's PEG of 0.03 indicates potential undervaluation.
Price to Book
The market values Costco Wholesale Corporation at 0.45 times its book value. This may indicate undervaluation.
EV/EBITDA
Enterprise value stands at 30.69 times EBITDA. This signals the market has high growth expectations.
How Well Does COST.NE Make Money?
Net Profit Margin
For every $100 in sales, Costco Wholesale Corporation keeps $2.99 as profit after all expenses.
Operating Margin
Core operations generate 3.82 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $28.87 in profit for every $100 of shareholder equity.
ROA
Costco Wholesale Corporation generates $10.26 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Costco Wholesale Corporation generates limited operating cash flow of $464.69B, signaling weaker underlying cash strength.
Free Cash Flow
Costco Wholesale Corporation produces free cash flow of $281.58B, offering steady but limited capital for shareholder returns and expansion.
FCF Per Share
Each share generates $20.55 in free cash annually.
FCF Yield
COST.NE converts 2.06% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
1.67
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
0.03
vs 25 benchmark
P/B Ratio
Price to book value ratio
0.45
vs 25 benchmark
P/S Ratio
Price to sales ratio
1.54
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.25
vs 25 benchmark
Current Ratio
Current assets to current liabilities
1.06
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.29
vs 25 benchmark
ROA
Return on assets percentage
0.10
vs 25 benchmark
ROCE
Return on capital employed
0.26
vs 25 benchmark
How COST.NE Stacks Against Its Sector Peers
| Metric | COST.NE Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 1.67 | 22.46 | Better (Cheaper) |
| ROE | 28.87% | 1263.00% | Weak |
| Net Margin | 2.99% | -5460.00% (disorted) | Weak |
| Debt/Equity | 0.25 | 1.24 | Strong (Low Leverage) |
| Current Ratio | 1.06 | 2.47 | Neutral |
| ROA | 10.26% | -192347.00% (disorted) | Strong |
COST.NE outperforms its industry in 3 out of 6 key metrics, particularly excelling in ROA, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Costco Wholesale Corporation's 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
64.42%
Industry Style: Defensive, Dividend, Low Volatility
High GrowthEPS CAGR
101.60%
Industry Style: Defensive, Dividend, Low Volatility
High GrowthFCF CAGR
49.92%
Industry Style: Defensive, Dividend, Low Volatility
High Growth