Costco(US:COST) The Motley Fool·2026-01-14 09:15Core Viewpoint - Costco is a solid retailer but may not be a worthwhile investment choice due to its high valuation compared to its growth prospects [1][3]. Financial Performance - In fiscal Q1 2026, Costco generated over $67 billion in revenue, marking an 8% increase year-over-year, with net income rising 11% to $2 billion [4]. - The company's profit growth in fiscal 2025 was 10%, which aligns with its current performance but does not justify its high P/E ratio of about 50 [5]. Valuation Comparison - Costco's P/E ratio of 50 is significantly higher than competitors like Amazon at 35 and Walmart at 40, making it less attractive compared to other investment options [6]. - Target, despite declining sales, trades at a P/E of 13, further highlighting Costco's premium valuation [6]. Investment Outlook - While Costco stock is technically a buy, the high price relative to its returns suggests that investors may find better opportunities elsewhere [9]. - The potential for a financial crisis could make Costco stock more appealing, but without such an event, it is advisable to seek other investments [10].