Could Costco Help You Retire a Millionaire?

Core Viewpoint - Costco has demonstrated significant historical growth and has potential for future opportunities, but current stock prices may not justify an investment at this time [1][4]. Group 1: Company Performance - Costco has achieved a remarkable 1,700% increase in share price since the year 2000, leading to a total return of 2,600% when including dividends [1]. - Membership fee revenue reached $1.1 billion in the fiscal third quarter of 2024, contributing approximately 50% to the company's operating income [2]. - Sales have increased by 650% since 2000, while earnings have risen nearly 950%, indicating a strong business model [3]. Group 2: Valuation Concerns - Costco's stock is currently near all-time highs, with a price-to-earnings (P/E) ratio of nearly 52, which is significantly above its five-year average of about 40 [5]. - The elevated P/E ratio is reminiscent of the late 1990s, suggesting that investors may be pricing in excessive optimism regarding future earnings growth [6]. - It is advised to place Costco on a wish list rather than an immediate buy list, with a recommendation to consider purchasing if the P/E ratio drops to its five-year average or lower [7].