Costco stock sits at an odd crossroads as of December 4, 2025. Operationally, the warehouse giant is firing on almost all cylinders: sales are growing, e‑commerce is accelerating, and membership income keeps hitting records. At the same time, the company is suing the Trump administration over tariffs, analysts are debating whether its premium valuation still has room to run, and the stock itself is roughly flat this year while the S&P 500 has surged. [1]
With fresh data and commentary arriving this week – including new sales numbers, analyst upgrades, and legal developments – investors are asking a simple question with a complicated answer: Should you buy Costco stock before 2026?
Costco’s November and Q1 FY26 numbers: fundamentals still look strong
On December 3, Costco reported November and first‑quarter FY26 sales that underline just how resilient the business remains. [2]
- November net sales: $23.64 billion, up 8.1% year over year.
- Q1 FY26 net sales (12 weeks to Nov. 23, 2025): $65.98 billion, also up 8.2% from the prior year.
- Comparable sales (same‑store) for November:
- U.S.: +6.0%
- Canada: +6.9%
- Other international: +11.4%
- Total company comps: +6.9%
- Digitally enabled sales: up around 16–20%, depending on whether you look at November alone or the full quarter. [3]
Those numbers line up with independent coverage this morning. Barron’s and other outlets highlighted that Q1 sales rose about 8.2% and e‑commerce posted more than 20% growth, even as Costco’s share price dipped modestly on valuation concerns rather than on any obvious operational weakness. [4]
A separate news piece today framed the quarter as a “strong Q1” that has Costco stock trading near the low $900s, with the market rewarding the sales beat and the e‑commerce surge. [5]
In short: the stores and the website are busy, and the top line is growing faster than many retail peers.
“Should you buy Costco stock before 2026?” – the bullish case
A widely syndicated article originally from The Motley Fool, now mirrored on multiple finance portals, puts the question right in the headline: “Should You Buy Costco Stock Before 2026?” [6]
That piece makes three core bullish points:
- The business is still “unstoppable”
- Costco continues to report healthy sales increases and growing profits, even as inflation, tariffs and consumer fatigue weigh on many retailers. [7]
- Membership fees provide a recurring, high‑margin revenue stream that helps smooth earnings across cycles.
- The company tends to hold up well in downturns because it sells essential goods at low prices, making it a go‑to for value‑conscious households.
- Membership model and customer base are powerful long‑term engines
- A separate “5 Reasons to Buy Costco Stock Like There’s No Tomorrow” piece points out that membership income rose about 10% in fiscal 2025 to roughly $5.3 billion, with Q4 membership revenue jumping about 17%. [8]
- U.S. and Canada renewal rates are in the low 90% range, meaning members almost never leave. [9]
- The average Costco household earns around $125,000, giving the customer base more resilience in a slowing economy and making it more likely they’ll keep paying for the membership even if the macro backdrop gets tougher. [10]
- Growth levers are intact: stores, Kirkland and e‑commerce
- Costco opened 27 new warehouses in fiscal 2025 and plans about 35 more in FY26, expanding both domestically and internationally. [11]
- The private‑label Kirkland Signature brand keeps gaining share, usually offering around 15–20% price savings vs national brands at equivalent quality – something management explicitly calls out as a cushion against tariff and inflation pressures. [12]
- E‑commerce sales reached roughly $19.6 billion in FY25, up about 15% year over year, with digitally enabled sales now accounting for a growing share of revenue and rising more than 20% in the latest quarter. [13]
Put differently, the business story heading into 2026 looks much better than the stock chart suggests.
Fresh analyst calls: Buy ratings, higher targets – and a reality check
Bank of America / TipRanks: Strong performance justifies a Buy
A new TipRanks‑tracked note from Robert Ohmes at Bank of America Securities reiterated a Buy rating on Costco with a price target of $1,095 – roughly 20% above recent trading levels. [14]
His case leans heavily on:
- Strong November comps: about 7% comparable sales growth excluding gas and currency swings, showing solid demand across categories like food, sundries, jewelry and health products.
- Fast‑growing digital channel, with about 16.3% growth in November online and app‑driven sales.
- Resilient membership metrics: even with a slight decline in renewal rates from record highs, the absolute number of paid memberships is still rising.
- International strength, where growth is outpacing the U.S. and digital penetration is climbing. [15]
TipRanks’ Costco forecast page shows a Moderate Buy consensus, with an average 12‑month price target around $1,090–$1,100, implying close to 20% upside from recent levels, though estimates vary widely. [16]
Telsey Advisory Group: Outperform with a $1,100 target
This morning, Telsey Advisory Group repeated an “Outperform” rating and $1,100 price target on Costco, citing the stock’s solid fundamentals and the firm’s long‑standing confidence in the business. [17]
Telsey’s note also recaps the broader Street view:
- Around 30–32 analysts cover Costco.
- Consensus points to a “Moderate Buy” rating.
- The average 12‑month target sits near $1,050–$1,030 depending on the data set, implying roughly 11–14% upside. [18]
MarketBeat: A 2026 “turnaround year” after a flat 2025
MarketBeat’s feature “Will 2026 Mark a Turnaround for Costco?” underscores just how unusual this year has been. Year‑to‑date, Costco is up only about 1–2%, versus much stronger gains for the broader market, despite beating earnings estimates in nine of the last ten quarters. [19]
The article highlights:
- A P/E ratio near 49, confirming that the stock still trades at a premium.
- Earnings expected to climb from roughly $18.03 per share this year to about $19.69 next year, an increase of just over 9%. [20]
- Strong fundamentals: net income has grown at an ~11% annual rate from 2022–2025, and operating cash flow has risen more than 80% over that period. [21]
- Short interest around 1.6% of the float, indicating that even skeptics aren’t willing to heavily bet against the company. [22]
All told, Wall Street largely likes Costco, but it doesn’t think the shares are a deep value. Analysts see moderate, not explosive, upside over the next year.
Two reasons investors love Costco – and one big reason to stay cautious
A StockStory research report on Costco, syndicated in various outlets, can be boiled down to “two reasons to like COST and one to stay skeptical.” [23]
1. High‑quality business with stellar returns on capital
StockStory points out that Costco generates an industry‑leading return on invested capital of roughly 35%, a strong signal that management is very good at allocating money into high‑return projects like new warehouses and digital investments. [24]
With about $275 billion in trailing‑12‑month revenue, the company also benefits from enormous scale, giving it superior bargaining power with suppliers and the ability to keep prices low while still producing healthy profits. [25]
2. Consistent growth in sales, comps and store count
The same report notes that:
- Revenue has grown at roughly a 10% compound annual rate over the last six years.
- Q3 FY25 revenue rose 8.1% year over year to $86.16 billion, slightly beating expectations. [26]
- Same‑store sales have averaged around 5–6% annualized growth over the last two years, and were about 6.4% in the most recent reported quarter.
- Warehouse count has climbed to over 914 locations, with store openings still outpacing the broader retail sector. [27]
This combination – steady comp growth plus continued expansion and rising digital sales – is exactly what long‑term investors want to see in a retailer.
3. The skeptical view: valuation, margins and expectations
The catch is valuation:
- StockStory pegs Costco’s forward P/E in the mid‑40s, and other sources put it closer to 50x earnings, depending on the day’s price. [28]
- GuruFocus notes that its internal “GF Value” estimate sits slightly below the current share price, implying the stock may be at or above fair value even as analysts project double‑digit upside. [29]
- Gross margins are structurally low, around 12–13%, because Costco competes aggressively on price. That’s normal for big‑box retail, but it also means the company has less room for error when it comes to cost inflation or tariff shocks. [30]
On top of that, TipRanks and MarketBeat both flag negative insider sentiment – insiders have been net sellers over the last quarter – even as large institutions like First Trust Advisors LP have continued to add to positions. [31]
Put simply, Costco is a great business at a great price… if it keeps executing perfectly. If growth stumbles, the multiple could compress, and that’s the main fear among skeptics.
The tariff lawsuit: a major political and legal overhang
Beyond earnings and valuation, Costco is now directly involved in one of the biggest economic policy fights in the U.S.
On December 2, Al Jazeera reported that Costco has filed a lawsuit against the Trump administration, seeking a refund of tariffs paid under the International Emergency Economic Powers Act (IEEPA) and asking the court to block further duty collection while the case proceeds. [32]
Key points from the report:
- The lawsuit was filed in the U.S. Court of International Trade and argues that certain Trump‑era tariffs are “illegal” import taxes, echoing earlier rulings from lower courts. [33]
- Costco says there is a December 15 deadline to secure refunds on duties already paid and claims that Customs has denied its extension requests.
- The company is seeking both a refund of past tariffs and a pause on future collections, joining other firms such as Ray‑Ban’s parent and Revlon in the legal challenge. [34]
- The case lands just as the U.S. Supreme Court is weighing whether the White House exceeded its authority under IEEPA in imposing these tariffs. Several court watchers quoted in the story believe there is a real chance the Court rules against the administration, though the outcome remains uncertain. [35]
From an investor perspective, the lawsuit cuts both ways:
- Upside scenario: a favorable ruling could result in material tariff refunds and reduce future cost pressure, effectively boosting margins and cash flow.
- Downside scenario: if the tariffs are upheld, Costco may face continued cost headwinds and political scrutiny for pushing a high‑profile challenge, especially with consumer sentiment already fragile.
MarketBeat’s analysis notes that Costco has already leaned on Kirkland Signature expansion and merchandising tweaks to offset tariff impacts, and so far those efforts have worked. But the legal fight adds another layer of uncertainty heading into 2026. [36]
Today’s headlines: sales strength, special dividend chatter and institutional buying
Several notable Costco‑related stories have landed on December 4, 2025:
- Seeking Alpha highlighted that November’s 6.9% comparable‑sales growth and 8.1% net‑sales increase have reignited talk of a special dividend or even the long‑rumored stock split, while also pointing out that worries over premium valuation and slightly “slowing” multi‑year sales trends are still weighing on the shares. [37]
- GuruFocus reported that Telsey Advisory Group reiterated its Outperform rating and $1,100 target, and that the Street’s average one‑year target around $1,050 implies mid‑teens upside. [38]
- A MarketBeat instant alert this morning showed First Trust Advisors LP increasing its Costco stake by about 2.9%, to more than 442,000 shares, reinforcing the picture of strong institutional support even as some insiders sell. [39]
- Zacks, though behind an anti‑bot wall, indicates in its public snippet that Costco’s earnings are expected to grow, but questions whether the company has the right mix of factors to beat near‑term EPS estimates, hinting at a more cautious short‑term view. [40]
Meanwhile, the stock itself recently traded around $890–$920 per share, with a P/E ratio near 50 and a dividend yield under 1% – tiny income, but a signal of Costco’s consistent cash generation and long history of occasional special dividends. [41]
Key questions for investors heading into Costco’s next earnings report
Costco is scheduled to release its Q1 FY2026 earnings after the close on December 11, 2025, with analysts expecting about $4.24 in EPS and around $67 billion in revenue for the quarter. [42]
For anyone considering buying (or holding) Costco stock before 2026, the next few weeks hinge on a handful of questions:
- Can Costco keep comp sales in the mid‑single to high‑single digits?
November’s 6.9% comps and 8.1% sales growth were excellent. If that momentum continues into the holiday period, it will support the bullish narrative. [43] - Will digital growth stay above mid‑teens?
Digitally enabled sales grew more than 16% in November and over 20% for the quarter. Sustained high‑teens growth would help justify the premium multiple. [44] - How will tariffs and legal developments evolve?
Any updates on the lawsuit, Supreme Court signals, or potential tariff refunds could move the stock, especially if Costco quantifies the financial impact. [45] - Does management hint at a special dividend or stock split?
Given Costco’s history of large one‑time payouts, another special dividend would not be out of character, and a stock split could broaden the shareholder base – both themes that today’s coverage has started speculating about. [46] - Is the valuation ceiling finally in sight?
With forward P/E around 45–50 and consensus upside in the low‑ to mid‑teens, investors will watch carefully for any sign of growth deceleration or margin pressure that could push the multiple down. [47]
Bottom line: A high‑quality compounder with 2026 upside – if you can live with the price
Putting all of today’s news together, Costco in December 2025 looks like:
- Operationally excellent: strong November and Q1 sales, double‑digit digital growth, rising membership income and robust international expansion. [48]
- Financially solid: consistent mid‑single‑digit comp growth, ~11% multi‑year earnings growth, and a net cash position that gives it room for special dividends, buybacks or accelerated expansion. [49]
- Legally and politically exposed: at the center of a high‑stakes tariff lawsuit that could either deliver a windfall or prolong regulatory and cost uncertainty. [50]
- Expensive by almost any metric: trading near 50x earnings, with Street targets implying moderate – not massive – upside and some valuation models suggesting the shares are already near fair value. [51]
For long‑term investors who prize durable business models, recurring revenue and disciplined management, Costco still fits the bill – and the latest batch of December 4 headlines mostly reinforces that view. But the high valuation and tariff overhang mean that the stock is not a simple “set‑and‑forget” bargain heading into 2026.
References
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