COST
Costco
Dividend / Cash flow
★ Quality 65/100Price today
$925.99
what the market pays
Worth
$558.55
calculated cycle value
Price is 66% above its value
charlieapp.co
Price vs Intrinsic Value
The line is the price month by month; the green band marks when it's undervalued (−20% off value). When the price drops in there, the discount is real, not opinion.
Where does the value come from?
Established business paying dividends
$539.56
per share
How it's calculated
FCF model understates: Costco's value is in membership recurrence (93% renewal, ~70% EBIT). P/E ~50x historically justified — membership compounder 20+ years CAGR ~9%. 924 warehouses, 81M+ members. Thin GM = the model, not weakness. Net cash +$19. BARGAIN <$324, ATTRACTIVE <$364.
Net cash in the bank
cash minus financial debt, per share
Total calculated value
business + cash
How many times the cash flow
Dividend / Cash flow · vs 42 peers
You pay 37x times this business's cash flow; its sector median is 25.7x.
41% above what Charlie thinks it's worth (22x) — you're overpaying, sector or no sector.
Why Overvalued?
Its free cash flow is $24.53/share × 22.0x multiplier plus $18.99 in net cash = $558.55 in intrinsic value. Today's price of $925.99 is 40% above the calculated value — the market is paying a premium over what the model sees as fair.
The price is 66% above the calculated value. You're paying more than it's worth.
Buying here lowers your expected return and wipes out the safety margin.
The next reasonable entry zone starts at $530.62.
At what price would buying make sense?
Entry zones
🟢 Undervalued
≤$446.84
-20% off Value
🟡 Discounted
≤$530.62
-5% off Value
🔴 Today
$925.99
-40% Valor
Overvalued
The market prices it too high versus what the business makes. Patience pays off here.
“Time is the friend of the wonderful company, the enemy of the mediocre.”
— Warren Buffett
Model updated · July 2026
The business
Costco doesn't make money on what it sells inside; it makes money on the entry pass.
Costco runs membership warehouse clubs: 924 giant warehouses where 81 million members pay an annual fee to buy at rock-bottom prices. The margin on product is barely 13%, almost token; the real profit lives in the membership fees, which drop almost entirely to the bottom line.
Member renewal runs around 93% and delivers the bulk of operating profit. That loyalty comes from a simple pact: sell genuinely cheap, don't squeeze the customer. A rival would take decades to build the same purchasing scale and the same trust; the thin margin isn't a weakness, it's the moat.
Revenue history
From $195.9B to $275.2B in 4 years. The business grows steadily.
Where each $100 of sales goes
Revenue $275.2B · FY2025
Of every $100 in sales, $97 goes to costs and operations; $3 is left as net profit (3% margin).
Catalysts and risks
Membership fee increase in September 2024 (to $65 in the U.S.), an almost pure profit lever.
Opening 25-30 new warehouses per year, with growing focus outside the U.S.
Recurring special dividends thanks to positive net cash.
Trades near 50 times earnings; the market already pays for the quality up front.
A weakened consumer slows discretionary spending and new member sign-ups.
Margin of only 13%: any stumble in costs or logistics weighs quickly.
Charlie's note
“Extraordinary business at an extraordinary business price. Paying near 50 times for a compounder growing at 9% with 93% renewal isn't crazy, but it's no gift either. Here patience is charged at the door.”
Analysis · July 2026
So when would be a good price for Costco?
By our calculation, not yet. We will email you the day it drops to $530.62 — so you do not have to keep checking.
🔔 Email meFree · no card
Charlie informs, it doesn't advise. No information should be taken as a recommendation to buy or sell.