Costco Wholesale CorporationCOST Costco Wholesale Corporation fair value $385–$683

Costco is a premier mature compounder generating highly predictable, high-margin membership fee revenueRevenueRevenue is an income-statement line item used to reconcile revenue to operating profit, pre-tax income, net income, or per-share earnings. It should be compared across periods and against peer disclosure conventions.. However, the current market price of $1,011.71 implies an unsustainable >15% 10-year growth rate and a 45x terminal multipleTerminal multipleThe exit P/E or EV/EBITDA we apply to the final year of an explicit forecast. Anchored to the business's long-run quality and the prevailing risk-free rate., driving our $533.50 fair valueFair valueOur composite estimate of intrinsic per-share value, blended across DCF, exit-multiple, and reverse-DCF methods. Reported as a low/mid/high range to capture model uncertainty. and a Sell rating.

• High-margin membership fee model
  High-margin membership fee model
• Massive scale and purchasing power
  Massive scale and purchasing power
• Cycle upside
  Consumer flight to value consolidates market share among scaled operators and warehouse clubs.