Costco Has Tumbled Despite Higher FCF and FCF Margins - Time to Buy COST Stock?

Core Viewpoint - Costco Wholesale Corp. reported strong free cash flow and margins, yet its stock has declined, making it attractive for value investors [1][4]. Financial Performance - Fiscal Q1 revenue ending Nov. 23, 2025, rose by 8.28%, with a 6.4% increase on a comparable basis [4]. - Free cash flow surged by 58.4% year-over-year to $3.162 billion, compared to $1.996 billion in the previous year's Q1 [4]. - Over the last year, free cash flow increased by over 79% to just over $9 billion from just over $5 billion [4]. Free Cash Flow Margins - Q1 2026 free cash flow margin was 4.70%, a 46% improvement from 3.21% a year ago [5]. - Trailing 12 months free cash flow margin was 3.21% of sales, up from 2.85% in FY 2025, indicating a 12.6% improvement [5]. Sales Forecast - Analysts project sales for the fiscal year ending Aug. 31, 2026, to be $297.14 billion, an 8% increase from $275.2 billion for the year ending Aug. 31, 2025 [7]. - For the year ending Aug. 31, 2027, projected sales are $318.18 billion [7]. - For the next 12 months, projected sales are $302.65 billion, representing a 10% increase over FY 2025 [7].