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- 🏪 Deep Dive: Costco ($COST) – Stability at a Premium | 05.04.25
🏪 Deep Dive: Costco ($COST) – Stability at a Premium | 05.04.25
Stability at a Premium | Analyzing Costco’s growth, valuation risks, and market trends in 2025. Is the membership giant still worth buying? Read more!

🏪 Deep Dive: Costco ($COST)
As of May 2, 2025 Simplify Wall Street | Premium Member Notes
📊 Company Overview
Costco remains a dominant force in the warehouse club model, thriving on membership-based recurring revenue and operational efficiency at scale.
Founded: 1983
Headquarters: Issaquah, Washington
Business Model: Annual memberships + high-volume retail + low overhead
Key Moat: Loyal member base, private-label strength (Kirkland), pricing power
📊 Financial Snapshot (as of May 2, 2025)
Metric | Value |
---|---|
Share Price | $1,008.30 |
EPS (TTM) | $17.14 |
PE Ratio (TTM) | 58.83 |
Forward Dividend | $5.20 |
Dividend Yield | 0.52% |
52-Week Range | $746.48 – $1,078.23 |
Market Cap | $447.37B |
Beta (5Y Monthly) | 0.94 |
Ex-Dividend Date | May 2, 2025 |
Earnings Date | May 29, 2025 (est.) |
🧩 Growth Drivers
1. Sticky Membership Economics
Over 130 million cardholders.
Membership revenue exceeds $5B annually with near-100% margin.
Renewal rate in U.S. and Canada exceeds 92%, creating a stable, recurring cash flow.
2. Private Label Strength — Kirkland Signature
Accounts for over 30% of sales.
Delivers higher margin than national brands while keeping prices low.
Brand loyalty for Kirkland rivals top CPG brands in trust and perception.
3. Global Expansion
Expanding in Japan, China, Korea, and Europe.
New stores in emerging markets show higher growth velocity than mature U.S. stores.
4. E-commerce and Delivery Growth
Building capabilities slowly but steadily.
Same-day delivery via Instacart and Uber Eats.
Growth in online grocery and prescription services.
🧱 Risk Factors
1. Valuation Premium
At nearly 59x earnings, Costco is priced like a tech growth stock, not a traditional retailer.
Any revenue or margin miss could lead to sharp multiple compression.
2. Thin Margins + Rising Costs
Operating margin remains under 4%.
Labor cost increases and inflationary pressures may erode earnings if not offset by volume.
3. E-commerce Gap
Costco’s digital experience still lags behind Amazon, Walmart, and Target.
Risk of younger, digital-native shoppers bypassing the in-store model entirely.
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