Costco Wholesale Corporation (COST)
Quantitative Summary
DeterministicCostco Wholesale Corporation's P/E of 49.8 is above its sector average (32.6x), though accompanied by a 10.9% economic spread (ROIC − WACC). Financial health is average: Piotroski 6/9, Altman Z 10.0. DCF fair value of $576 implies 41% downside based on model assumptions.
Generated deterministically from quant metrics and financial statements. Not a recommendation.
Algorithmic Teardown
AI-GeneratedThe fundamental economics demonstrate a robust capital allocation engine, evidenced by an ROIC-WACC spread of +10.8%, indicating significant value creation above the cost of capital. The DuPont decomposition reveals that the 27.8% return on equity is primarily driven by exceptional asset turnover at 3.57x rather than high margins or excessive leverage; this operational efficiency is reinforced by a Piotroski F-Score of 6/9 and an Altman Z-Score of 10.0, signaling strong financial health with minimal distress risk. However, the Beneish M-Score of -2.66 suggests low earnings manipulation concerns, while revenue growth has moderated to 8.2% year-over-year, reflecting a mature trajectory despite persistent profitability factors like an RMW score of 0.322.
Valuation metrics present a notable divergence between market pricing and intrinsic value models. The current P/E ratio of 52.9x stands substantially above the sector average of 31.2x, implying that investors are pricing in aggressive future expansion rather than current earnings power. This premium is not supported by the DCF fair value calculation of $569, which indicates a -42.9% discount to market prices based on an assumed ten-year free cash flow growth rate of 22.9%. Consequently, the stock appears to be trading at a significant premium relative to its discounted cash flow-derived worth, suggesting the market may be overestimating sustainable long-term growth rates compared to historical performance or sector norms.
Risk and factor analysis introduces conflicting signals regarding future compensation for risk taken. While the Profitability Factor (RMW) of 0.322 highlights robust earnings quality, the Fama-French Alpha is negative at -1.44% annually, suggesting underperformance relative to a standard market-cap-weighted benchmark after adjusting for size and value characteristics. Furthermore, insider activity over the last ninety days shows net selling totaling $7,049,555, which often precedes periods of valuation compression or reduced confidence in near-term catalysts. The neutral stance on the Value Factor (HML) at -0.001 indicates that current pricing does not significantly deviate from value-based expectations, leaving the investment case dependent entirely on whether the high multiple can be justified by growth exceeding the 22.9% DCF assumption.
Generated by LLM from quantitative data inputs. May contain inaccuracies. Not investment advice.
DCF Sandbox
Interactive5-year two-stage DCF. Terminal growth 3%. Default sliders match the pre-computed base case. Drag to explore scenarios. Not investment advice.
The growth rate the market implicitly expects over the next 10 years to justify today's price. Compare with historical growth of 8% YoY revenue.
Sensitivity Matrix
| TG ↓ / WACC → | 8.8% | 10.8% | 12.8% |
|---|---|---|---|
| 2% | $689 | $524 | $421 |
| 3% | $787 | $576 | $452 |
| 4% | $927 | $644 | $491 |
Center = base case. Green = >10% upside, Red = >10% downside vs $954.27.
Pre-computed DCF: WACC=10.8%, terminal growth 3%. Fair value $576 (-41.3%). Not investment advice.
Valuation Context
Currently trading 2% below its 5-year average P/E of 53.1x.
Price Chart with Moving Averages
Technical Setup
AI GeneratedCostco Wholesale Corporation is currently trading at $1076.47, presenting a specific technical configuration relative to its moving average envelope boundaries. The positioning of the current price within this dynamic range suggests an assessment of whether the asset has deviated significantly from its recent mean or remains consolidated near central tendency levels. If the share price sits distinctly outside the upper band, it may indicate extended momentum that historically often precedes a pullback toward equilibrium, whereas proximity to the lower boundary could imply support potential where buyers might step in to arrest further declines. This relative-value setup highlights the interplay between recent volatility and established average trends without dictating future direction. In the context of consumer defensive sectors, such mean-reversion dynamics are frequently observed as markets adjust valuations based on shifting macroeconomic expectations or earnings realizations. The current placement invites an analysis of whether the price is overextended relative to its historical path or if it has found stability within the envelope's confines. Traders monitoring this metric would focus on how sustained deviations from the moving average typically resolve, often resulting in a contraction toward the central line rather than continued linear movement. Observing where $1076.47 resides against these statistical bands provides insight into potential reversal zones or continuation patterns inherent to the stock's recent price action structure.
Quant Health Deep Dive
Profitability & Value Creation
✅ Conservative payout — room for dividend increases.
DuPont Analysis — ROE Decomposition
Breaking down Return on Equity to see how the company generates its ROE — efficiency, margins, or leverage.
Balance Sheet Health
Insider Activity (Last 90 Days)
Open-market buys vs sells by company insiders. Source: yfinance.
Earnings Surprise History
EPS estimates vs actuals for the most recent reported quarters. Source: yfinance.
Dividend History
| Date | Amount | Change |
|---|---|---|
| 2026-05-01 | $1.4700 | +13.1% |
| 2026-01-30 | $1.3000 | 0.0% |
| 2025-10-31 | $1.3000 | 0.0% |
| 2025-08-01 | $1.3000 | 0.0% |
| 2025-05-02 | $1.3000 | +12.1% |
| 2025-02-07 | $1.1600 | 0.0% |
| 2024-11-01 | $1.1600 | 0.0% |
| 2024-07-26 | $1.1600 | 0.0% |
| 2024-04-25 | $1.1600 | +13.7% |
| 2024-02-01 | $1.0200 | -93.2% |
| 2023-12-27 | $15.0000 | +1370.6% |
| 2023-11-02 | $1.0200 | 0.0% |
Dividend and split data from SEC filings and market data. Amounts are per share, not adjusted for splits. Source: yfinance.
Risk Profile
Sharpe = risk-adjusted return (higher is better). Max drawdown = largest peak-to-trough decline. 1,200+ trading days.
Underwater (Drawdown from Peak)
How far below the all-time high the price has been over time. Deeper = more pain for holders.
Rolling 60-Day Beta vs S&P 500 (VOO)
How the stock's sensitivity to market moves changes over time. β > 1 = more volatile than the market.
Fama-French 5-Factor Exposure
Academic factor model decomposition — what's really driving this stock's returns.
Fama-French 5-Factor Model. Data: Kenneth French Data Library. Regression over 3 years of daily returns.
Fundamentals
Smart Money Flow
Institutional 13F filings from top hedge funds. Positions updated quarterly from SEC EDGAR.
| Fund | Quarter | Shares Change | % Change | Action |
|---|---|---|---|---|
| Point72 Asset Mgmt | 2026-Q1 | +144,700 | +167.9% | Increased |
| Bridgewater Associates | 2026-Q1 | +12,968 | +24.6% | Increased |
| Two Sigma Investments | 2026-Q1 | +19,200 | +58.2% | Increased |
| Citadel Advisors | 2026-Q1 | -130,700 | -6.5% | Decreased |
| Renaissance Technologies | 2026-Q1 | -887,744 | -97.9% | Decreased |
| DE Shaw | 2026-Q1 | -168,200 | -91.3% | Decreased |
| Millennium Management | 2026-Q1 | +1,016,100 | +240.4% | Increased |
| Citadel Advisors | 2025-Q4 | +33,200 | +1.7% | Increased |
| DE Shaw | 2025-Q4 | +150,900 | +451.8% | Increased |
| Bridgewater Associates | 2025-Q4 | +578 | +1.1% | Increased |
| Point72 Asset Mgmt | 2025-Q4 | +54,300 | +170.2% | Increased |
| Two Sigma Investments | 2025-Q4 | -176,252 | -84.2% | Decreased |
Source: SEC 13F-HR filings. 13F data is delayed ~45 days after quarter end. Not investment advice.
Passive Flow Attribution
ETF Draft EffectWhen investors buy or sell ETFs like VDC or XLP, the fund manager is mechanically forced to buy or sell COST shares regardless of Costco Wholesale Corporation's individual fundamentals. We estimate $60.1B of passive capital is structurally linked to COST through 8 tracked ETFs. This substantial passive exposure means that ETF inflows and outflows — not company fundamentals — can dominate daily volume on this stock.
Passive exposure = Σ (ETF AUM × stock weight in ETF) across 8 tracked ETFs. Actual passive ownership is larger (includes mutual funds). Not investment advice.
ETF Contagion Visualizer
Simulate a price drop in Costco Wholesale Corporation to visualize passive redemption contagion across ETFs and collateral stocks.
If Costco Wholesale Corporation (COST) experiences a significant drawdown, ETF redemptions can create collateral selling pressure on co-held stocks. Our model identifies Walmart Inc. (WMT) as the most exposed collateral stock, sharing 2 ETFs with COST. This is the "Passive Contagion" effect described in the Inelastic Market Hypothesis.
Contagion model based on shared ETF exposure and constituent weights across 35 tracked ETFs. Estimated selling pressure is a simplified model — actual impact depends on market liquidity, ETF redemption mechanics, and market-maker activity.
COST Ownership Dynamics
Passive funds hold 1 in every 7 COST shares, reducing daily market volatility.
Costco Wholesale Corporation (COST) exerts measurable gravity on the passive index market, currently representing 12.3% of the VDC (VDC) and 9.8% of the State Street Consumer Staples Select Sector SPDR ETF (XLP). Across 33 tracked ETFs, approximately 64M shares (14.5% of float) are held by passive funds and rarely trade on the open market. This level of passive ownership means index rebalances can create outsized volume events.
ETFs with Highest COST Exposure
Float lock-up computed from 33 ETFs tracked by SecuritiesDB. Actual passive ownership is higher (includes mutual funds, pension funds, etc.).
COST Institutional Volume Profile
252-day volume distribution by price level. The Point of Control (POC) marks — the price where the most institutional volume transacted — an implicit support/resistance floor.
The highest-volume price zone for Costco Wholesale Corporation over the past year sits near $976.04 (12% of 252-day volume). The current price of $954.27 sits 2.2% below the POC — suggesting potential mean-reversion upside if institutional demand reasserts at this level.
Volume Profile computed from 252 trading days of OHLCV data. Volume allocated to price bins proportionally based on daily high-low range. Not investment advice.
COST Capital Efficiency
How efficiently does Costco Wholesale Corporation convert operating profits into free cash? The FCF Conversion ratio measures the gap between accounting earnings and real cash generation.
Costco Wholesale Corporation converts 58% of its EBITDA into free cash flow, a healthy conversion rate indicating efficient capital management — the business generates substantial cash after reinvestment. The positive ROIC-WACC spread of 10.9% confirms that reinvested capital creates shareholder value.
Capital efficiency = Free Cash Flow ÷ EBITDA. Reinvestment = (EBITDA − FCF) ÷ EBITDA. Metrics from latest annual filings. Not investment advice.
Fails-to-Deliver (FTD) History
SEC-reported settlement failures. Elevated FTDs can indicate high short-selling pressure, operational settlement issues, or naked shorting activity.
| Date | Failed Shares | Close Price | Notional Value |
|---|---|---|---|
| 2026-05-13 | 39 | $1021.88 | $39,853.32 |
| 2026-05-11 | 1,100 | $1008.79 | $1.1M |
| 2026-05-07 | 496 | $995.75 | $493,892 |
| 2026-05-01 | 1 | $1014.53 | $1,014.53 |
| 2026-04-30 | 3 | $998.67 | $2,996.01 |
| 2026-04-27 | 817 | $1011.15 | $826,109.55 |
| 2026-04-23 | 78 | $1003.70 | $78,288.6 |
| 2026-04-22 | 50 | $1005.81 | $50,290.5 |
| 2026-04-21 | 48 | $997.84 | $47,896.32 |
| 2026-04-20 | 21 | $999.89 | $20,997.69 |
| 2026-04-17 | 1 | $987.21 | $987.21 |
| 2026-04-15 | 6 | $974.80 | $5,848.8 |
| 2026-04-14 | 162 | $980.85 | $158,897.7 |
| 2026-04-07 | 2,969 | $1018.55 | $3.0M |
| 2026-04-06 | 3,496 | $1014.96 | $3.5M |
| 2026-04-02 | 1 | $996.56 | $996.56 |
| 2026-03-27 | 1 | $979.65 | $979.65 |
| 2026-03-25 | 963 | $973.82 | $937,788.66 |
| 2026-03-24 | 73 | $965.73 | $70,498.29 |
| 2026-03-19 | 4,029 | $979.92 | $3.9M |
| 2026-03-16 | 100 | $1008.43 | $100,843 |
| 2026-03-13 | 8,033 | $1003.32 | $8.1M |
| 2026-03-10 | 1,069 | $1005.30 | $1.1M |
| 2026-03-09 | 213 | $998.10 | $212,595.3 |
| 2026-03-03 | 8 | $1002.77 | $8,022.16 |
| 2026-03-02 | 4,900 | $1010.79 | $5.0M |
| 2026-02-25 | 6 | $998.43 | $5,990.58 |
| 2026-02-24 | 2,159 | $986.02 | $2.1M |
| 2026-02-23 | 100 | $985.27 | $98,527 |
| 2026-02-18 | 5 | $1012.05 | $5,060.25 |
Source: SEC Regulation SHO FTD data. Data is reported with a ~30 day delay. High FTD quantities relative to average daily volume may indicate settlement stress.
Institutional Holdings (13F Filings)
Raw SEC 13F-HR filings from institutional investment managers. Shows exact share counts and portfolio values as reported to the SEC.
| Fund | Quarter | Shares | Value ($K) |
|---|---|---|---|
| Berkshire Hathaway | 2026-Q1 | 325,634,818 | $7,323,527,057K |
| Citadel Advisors | 2026-Q1 | 1,874,600 | $42,159,754K |
| Millennium Management | 2026-Q1 | 1,438,800 | $32,358,612K |
| Renaissance Technologies | 2026-Q1 | 19,456 | $19,386,949K |
| Point72 Asset Mgmt | 2026-Q1 | 230,900 | $5,192,941K |
| Bridgewater Associates | 2026-Q1 | 65,801 | $1,479,864K |
| Two Sigma Investments | 2026-Q1 | 52,200 | $1,173,978K |
| DE Shaw | 2026-Q1 | 16,100 | $362,089K |
| Berkshire Hathaway | 2025-Q4 | 325,634,818 | $7,896,644,337K |
| Citadel Advisors | 2025-Q4 | 2,005,300 | $48,628,525K |
| Renaissance Technologies | 2025-Q4 | 907,200 | $21,999,600K |
| Millennium Management | 2025-Q4 | 422,700 | $10,250,475K |
| DE Shaw | 2025-Q4 | 184,300 | $4,469,275K |
| Point72 Asset Mgmt | 2025-Q4 | 86,200 | $2,090,350K |
| Bridgewater Associates | 2025-Q4 | 52,833 | $1,281,200K |
Source: SEC 13F-HR filings. Values reported in thousands. 13F data is delayed ~45 days after quarter end.
SEC Comment Letters
SEC correspondence with the company regarding their filings. Comment letters often flag disclosure deficiencies, accounting concerns, or material omissions.
Source: SEC EDGAR correspondence. Comment letters are public records of SEC staff review of company filings.
Price Correlations
Statistical correlation of daily returns with other stocks. High correlations indicate stocks that move together; negative correlations can offer diversification.
| Peer | 252-Day (1Y) | 126-Day (6M) | Direction |
|---|---|---|---|
| WTGXX | NaN | NaN | |
| WMT | 0.573 | 0.560 | Moderate |
| MMC | 0.367 | 0.236 | Moderate |
| TJX | 0.362 | 0.297 | Moderate |
| PNW | 0.360 | 0.381 | Moderate |
| KR | 0.354 | 0.365 | Moderate |
| VRTPX | 0.351 | 0.200 | Moderate |
| PG | 0.346 | 0.256 | Moderate |
| MCD | 0.337 | 0.305 | Moderate |
| HD | 0.324 | 0.355 | Moderate |
Pearson correlation of daily log returns. 252d ≈ 1 trading year. Computed from price history. Not investment advice.
Compare COST to Peers
Quant metrics computed deterministically from financial statements and price data. Updated: 2026-06-02.
SecuritiesDB provides programmatic data aggregation for informational purposes only. None of the metrics, summaries, or algorithmic flags constitute a recommendation to buy or sell any security.