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Is Costco Wholesale (COST) Undervalued After Its August Sales And Fiscal 2026 Results?

Simply Wall St · 1d ago

Costco Wholesale (COST) has reported new sales figures for August 2026, along with detailed results for its fourth quarter and full fiscal year, giving investors additional insight into the warehouse retailer.

Despite Costco Wholesale reporting strong August and fiscal 2026 sales, the stock has eased recently, with a 7 day share price return of down 2.9% and a 90 day share price return of down 4.5%. The 5 year total shareholder return of 110.4% points to momentum that has been built over a longer period as investors weigh new growth initiatives against issues such as the Costco Next closure and the beef pricing inquiry.

Compare Costco Wholesale’s recent pullback and sales strength with a hand picked group of resilient retailers in the 75 resilient stocks with low risk scores to see how other balance sheet strong stocks are holding up.

After August’s solid sales report but a recent share price pullback, Costco Wholesale now poses a practical question for investors. Is this dip enough to justify buying in, or does it make more sense to wait for a better entry point before looking at valuation?

Most Popular Narrative: 14.3% Undervalued

The most followed valuation narrative for Costco Wholesale sees fair value at $1,082.94 compared with the last close of $928.48. This implies meaningful upside is already baked into detailed growth and margin assumptions.

Costco's extension of gas station hours is designed to enhance member convenience, which could lead to higher gasoline sales and increased store traffic, positively impacting revenue. E-commerce and digital channels show significant growth, with e-commerce comp sales up 22.2% adjusted for FX, suggesting a strong potential to boost revenue and earnings from online sales.

Read the complete narrative.

Want to see what sits behind that fair value for Costco Wholesale? The narrative leans on steady revenue expansion, slightly higher margins, and a premium profit multiple that assumes this membership model keeps earning its premium.

Result: Fair Value of $1,082.94 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, this Costco Wholesale story also carries risks, including higher labor and supply chain costs as well as tariff or foreign exchange pressures that could squeeze margins and weaken the bullish case.

Find out about the key risks to this Costco Wholesale narrative.

Another View: Costco Wholesale Looks Expensive On Earnings

While the Costco Wholesale narrative points to a fair value of $1,082.94 and labels the stock as undervalued, the earnings multiple tells a different story. Costco Wholesale trades on a P/E of 46.6x, compared with an industry average of 17.2x and a peer average of 21.8x.

The Simply Wall St fair ratio for Costco Wholesale is 35.4x, which is below the current 46.6x. That gap suggests investors are already paying a sizeable premium for quality and growth, which raises the question of how much upside is left if sentiment cools.

See what the numbers say about this price — find out in our valuation breakdown.

NasdaqGS:COST P/E Ratio as at Sep 2026
NasdaqGS:COST P/E Ratio as at Sep 2026

Next Steps

If the mixed sentiment around Costco Wholesale has you undecided, it makes sense to act soon. Review the key data for yourself so you can form a clear stance using the 2 key rewards.

Looking for more investment ideas beyond Costco Wholesale?

If Costco Wholesale has sharpened your focus on quality, do not stop there. Broaden your watchlist now so you are not relying on a single opportunity.

Use the Simply Wall St screener to compare Costco Wholesale with other ideas that might suit your risk tolerance and style.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.