Author's DCF of Costco yields a base-case value of $631/share, well below the current price, implying the stock is overvalued and likely to trade flat for years.
COST — AVOID The author built a full Costco operating model with generous revenue growth and 23 stores/year expansion, arriving at valuations of $256B, $310B and $278B, with a base case of $631/share. He argues the current 52-53x P/E versus a 10-year average of 30-33x shows the market has Costco incorrectly priced. Without a correction, he expects the stock to trade flat for a few years until earnings and growth normalize to the market cap, and warns the price will get hit hardest on even a slight earnings miss.
in my base case, their share value should be at $631. I think their current trading at a high P/E of 52-53x compared to their 10-year average around 30-33x backs up what I’ve uncovered.
This Reddit post, published February 05, 2026, features u/StockBrokenUSA discussing COST. 1 trade idea extracted by AI with direction and confidence scoring.
Speakers: u/StockBrokenUSA · Tickers: COST