Stock fact sheet · data as of
Costco Wholesale Corporation (COST): fair value, margin of safety and Wheel Score
Consumer Defensive · Discount Stores · United States · Quality / Blue-Chip
Is COST undervalued?
Costco Wholesale Corporation (COST) closed at 978.01 on 16 Oct 2026, 186% above the GLS average fair value of 341.91. 9 of the 9 models that produced a number value the shares below the current price. A gap this wide usually means the market is paying for growth or a story the trailing numbers do not show yet; the models work from filed results, not forecasts, so they are conservative by design.
There is a wide gap between DDM (81.52) and 10 Cap (646.23). When the models are this far apart the "fair value" is really a range, and the margin of safety above should be read with that range in mind.
The nightly engine files COST under Quality / Blue-Chip: a high moat score and a high health score together.
Nine valuation models for COST
Each model turns the latest filed numbers into a value per share; the GLS fair value is the simple average of the ones that produce a positive number. The last two rows are shown for reference and never enter the average. The Quote page lets you switch any model off and add your own margin of safety.
| Model | Value | vs price | What it measures |
|---|---|---|---|
| DCF | 272.14 | -72% | Present value of the projected free cash flows, discounted at the cost of capital |
| Graham Number | 194.18 | -80% | The most a defensive investor pays for the earnings and book value per share |
| Graham Growth | 553.47 | -43% | Graham's growth formula: EPS × (8.5 + 2 × growth), adjusted for bond yields |
| Lynch | 194.71 | -80% | EPS × the earnings growth rate (PEG of 1), growth capped at 25% |
| GLS Growth | 339.30 | -65% | EPS compounded ten years at the blended growth rate, discounted back at 15% a year |
| 10 Cap | 646.23 | -34% | Owner's earnings (operating cash flow less maintenance capex) capitalised at 10% |
| Payback Time | 564.75 | -42% | Eight years of compounded free cash flow: the price at which the business pays for itself |
| DDM | 81.52 | -92% | Dividend discount model: next year's dividend ÷ (10% − 3% growth); needs a dividend |
| EPV | 230.89 | -76% | Earnings power value: current EPS capitalised at 9% with no growth |
| Zombie (liquidation) | -15.03 | -102% | Current assets less all liabilities, per share: the balance-sheet floor. Not in the average |
| Wall St target | 1,111.55 | +14% | Analysts' average 12-month price target. Not in the average |
Quality and financial health
Costco Wholesale Corporation scores 7 of 9 on the Piotroski F-score, the nine yes/no tests of profitability, leverage and efficiency on the latest annual accounts - a strong reading that passes the Sunday Scan's "6 or more" rule with room to spare. A GLS Moat score of 8.3/10 puts COST among the more durable businesses we track: over ten years the metrics the score watches (revenue, EPS, book value, margins, cash flow, ROIC) have mostly moved the right way, year after year.
Returns on capital are high - ROIC 20.8%, ROE 25.8%, ROA 10.4% - with debt at 0.24 times equity and a free-cash-flow yield of 2.2%.
The dividend yield is 0.57% with a payout ratio of 27% - a small yield that leaves most of the earnings in the business. Revenue comes mainly from Food and Sundries 39%, Non Foods 28%, Other 17% (quarter Q2 FY2026).
Institutional ownership scores 9/10, insider activity 1/10 and Congressional trading 4/10 on the GLS smart-money scales; the last recorded insider buy was on 10 Sep 2026; the last recorded Congressional buy was on 25 Sep 2026.
| Piotroski F-score | 7 / 9 | ROIC | 20.8% |
|---|---|---|---|
| GLS Moat | 8.3 / 10 | ROE | 25.8% |
| Debt / equity | 0.24 | ROA | 10.4% |
| Free-cash-flow yield | 2.2% | Payout ratio | 27% |
| Institutions | 9 / 10 | Insiders · Congress | 1 · 4 / 10 |
Wheel Score 55: Fair
A Wheel Score of 55 puts Costco Wholesale Corporation in the Fair band - below the 70 the Sunday Scan requires. Value 0/25, Health 16/20, Moat 12/15, Premium 7/20 and Stability 20/20; the weakest part is Value (0/25).
Implied volatility is 22% on the near-the-money contracts 20-60 days out: some premium, but under the 35-60% range the Wheel Score pays full marks for (7 of 20 points). The option chain is deep: 98,640 contracts of open interest across all expiries, which means tight fills at most strikes.
Volume runs at 3.0M shares a day on a market cap of $433.4B, with a beta of 0.87; the Stability part of the Wheel Score gives that 20 of 20.
| Part | Points | From | |
|---|---|---|---|
| Value | 0 / 25 | -186% margin of safety | |
| Health | 16 / 20 | Piotroski 7/9 | |
| Moat | 12 / 15 | moat 8.3/10 | |
| Premium | 7 / 20 | implied volatility 22% | |
| Stability | 20 / 20 | 3.0M shares/day, $433.4B cap, beta 0.87 |
The Wheel Score ranks ~7,400 US stocks for selling cash-secured puts and covered calls; it is updated nightly and is not a recommendation. The walkthrough lesson shows how the score fits into a trade, start to finish.
Upcoming events
The next earnings report is due on 10 Dec 2026, 55 days away - outside the window of a 30-45-day put sold today. The shares go ex-dividend on 30 Oct 2026 (1.47 per share), so a covered call sold before then carries a small early-assignment risk around that date.
Earnings, dividend, IPO, split and economic calendars for the whole market, filterable to your watchlists.
Similar stocks in Discount Stores
The 8 companies below are the closest to Costco Wholesale Corporation by market cap within the Discount Stores industry, each with its own fact sheet; the Compare page puts up to eight of them side by side.
| Stock | Close | Fair value | MoS | Wheel | Mkt cap |
|---|---|---|---|---|---|
| WMT Walmart Inc. | 116.16 | 52.04 | -123% | 61Fair | $924.4B |
| TGT Target Corporation | 155.30 | 138.33 | -12% | 71Good | $70.5B |
| DG Dollar General Corporation | 133.90 | 150.39 | +11% | 85Prime | $29.5B |
| DLTR Dollar Tree, Inc. | 124.41 | 101.71 | -22% | 69Good | $23.3B |
| BJ BJ's Wholesale Club Holdings, Inc. | 103.27 | 79.89 | -29% | 65Good | $13.0B |
| TBBB BBB Foods Inc. | 56.36 | 417.91 | +87% | 45Weak | $6.8B |
| OLLI Ollie's Bargain Outlet Holdings, Inc. | 95.56 | 109.02 | +12% | 85Prime | $5.7B |
| PSMT PriceSmart, Inc. | 169.19 | 103.78 | -63% | 57Fair | $5.2B |
⚖ Compare COST with 7 of them All Consumer Defensive stocks →
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Start free See the Sunday ScanQuestions about COST
Is COST undervalued right now?
No: at 978.01 the stock trades 186% above the GLS average fair value of 341.91 (data as of 16 Oct 2026), well beyond what trailing earnings, cash flow and book value support.
What is the Wheel Score of COST and what does it mean?
COST scores 55 out of 100 (Fair). The Wheel Score blends the margin of safety (25 points), Piotroski health (20), the GLS moat (15), the option premium on offer (20) and trading stability (20) into one number that ranks stocks for the wheel strategy - selling cash-secured puts, then covered calls if assigned. 80 and above is Prime, 65-79 Good, 50-64 Fair, under 50 Weak.
What is the GLS fair value for COST?
341.91 per share as of 16 Oct 2026 - the simple average of the 9 valuation models (out of nine: DCF, Graham Number, Graham Growth, Lynch, GLS Growth, 10 Cap, Payback Time, DDM and EPV) that produced a positive value. The models run every night on the latest filings; the Quote page lets you switch any of them off and add a margin of safety of your own.
When does Costco Wholesale Corporation report earnings next?
The next earnings report is due on 10 Dec 2026 (after the close), 55 days from the data date of 16 Oct 2026. The Calendars page lists every upcoming report with its time of day.
Does COST have listed options, and how liquid are they?
Yes. The nightly snapshot found 1,000 listed contracts with 98,640 open interest across all expiries and implied volatility of 22% on the near-the-money contracts. The Options scanner lists the cash-secured put and covered call set-ups with premium and annualised yield worked out.