Costco Wholesale Corporation (NASDAQ: COST) is back in the spotlight on December 18, 2025, as investors weigh a familiar debate: excellent operating execution vs. an expensive valuation. As of 11:50 a.m. ET, Costco shares traded at $859.54, down 0.36% on the session, with an intraday range of $852.51 to $863.15 and a market capitalization around $381 billion.
The day’s conversation around Costco stock is being shaped by three overlapping narratives: (1) the company’s strong fiscal Q1 2026 results, (2) a high-profile “Sell” call that hit shares earlier this week, and (3) a widening gap between the bullish consensus price-target range and concerns that the stock’s multiple leaves little margin for error.
Costco stock price action: why COST is under the microscope on Dec. 18
Costco’s share price has been choppy in recent months, and today’s coverage reflects that tension. Multiple market commentaries published or resurfacing on Dec. 18 emphasize that—even with a clean earnings beat—COST can struggle if investors think the stock is “priced to perfection.” One widely circulated analysis argues Costco is trading around a 46x price-to-earnings multiple, and notes the company did not provide formal guidance alongside its latest quarterly report, leaving investors to do more forecasting themselves. [1]
In other words: the market isn’t questioning whether Costco is a great business—it’s questioning how much greatness is already priced into the stock.
The fundamental anchor: Costco’s fiscal Q1 2026 results (reported Dec. 11)
Costco’s most recent quarterly performance (fiscal Q1 2026, quarter ended Nov. 23, 2025) provides the factual base for nearly every forecast and opinion piece circulating today.
From the company’s earnings release:
- Net sales:$65.98 billion, up 8.2% year over year
- Membership fees:$1.329 billion (total revenue $67.307 billion)
- Net income:$2.001 billion, or $4.50 per diluted share
- Comparable sales:+6.4% total company (with “digitally-enabled” comps +20.5%)
- Warehouse footprint:923 warehouses globally (with a detailed country breakdown provided) [2]
Those numbers support the “Costco is still compounding” thesis: solid sales growth, strong renewal-driven recurring revenue, and accelerating digital contribution.
Membership: the profit engine investors can’t ignore
If there is one variable that consistently moves the Costco narrative—and, by extension, Costco stock—it’s membership quality and renewal durability.
A transcript summary of the Q1 2026 earnings call highlights:
- Total paid members:81.4 million (up 5.2% year over year)
- Total cardholders:105.9 million (up 5.1%)
- Paid executive memberships:39.7 million (up 9.1%)
- Renewal rates:92.2% in the U.S./Canada and 89.7% worldwide, both down 10 basis points quarter over quarter
- Worldwide traffic:+3.1%, with average ticket up 3.2% [3]
That small renewal-rate dip matters because Costco’s model effectively uses membership fees as a stabilizing profit stream—one reason investors historically award the company a premium multiple.
At the same time, management-linked commentary indicates the slight renewal softness is connected to a mix shift toward digitally acquired members, who may renew at slightly lower rates than warehouse sign-ups, at least initially. [4]
Why Costco beat expectations—but the stock didn’t rip higher
Several Dec. 18 write-ups focus on an uncomfortable market reality: an earnings beat is only “new information” if it meaningfully changes the forward story. One analysis notes Costco’s sales grew more than 8% and results beat expectations, but argues that solid single-digit growth may not be enough to lift a stock already valued at a steep premium—especially without updated guidance. [5]
That same thread shows up across coverage this week:
- The business is executing.
- But the valuation is doing a lot of work.
This is the core dynamic behind many short-term forecasts for COST going into 2026.
The downgrade that shook the tape: Roth’s contrarian “Sell” call
A key “current news” item affecting sentiment is Roth Capital’s downgrade earlier this week. In a widely circulated market recap, Costco stock fell sharply after Roth moved the shares to Sell and set a $769 price target, citing concerns about decelerating member additions, slowing same-store sales growth, and “fading” renewals—plus rising competition from rivals like Walmart’s Sam’s Club and BJ’s Wholesale. [6]
That $769 target has become a reference point in today’s forecasting conversation because it sits materially below Costco’s current trading level—essentially the “bear case” anchor price that other analysts and commentators react to.
Analyst forecasts: most of Wall Street stays bullish—just not unanimous
Despite the high-profile Sell call, the broader Street view remains constructive. Consensus trackers show a strong skew toward “Buy”-equivalent ratings, but with meaningful dispersion in targets.
One compiled analyst snapshot shows:
- Consensus rating: “Buy”
- Average price target:$1,059 (about +23% implied upside from the referenced price)
- Low / High targets:$769 to $1,225 [7]
MarketBeat’s consensus numbers are somewhat more conservative on the average target, showing $991.39 as the 12‑month average (with wide dispersion in the underlying target set). [8]
Recent notable target moves (post-earnings)
Among the more concrete “forecast” items being cited this week:
- Bernstein raised its price target to $1,146 (Outperform), while the same report references other major firms maintaining bullish targets (e.g., Goldman Sachs $1,171, BofA $1,095) and notes Mizuho’s Neutral stance at $950. [9]
- A separate analyst compilation lists JPMorgan maintaining a Buy around $1,027, while Goldman maintained a bullish rating with a revised target (shown as $1,171 in the post-earnings commentary set). [10]
- Roth’s downgrade stands out as the major outlier, explicitly moving from Hold/Neutral to a bearish stance with $769. [11]
This split is important for Google Discover readers: the “news” isn’t that analysts disagree—analysts always disagree. The news is that disagreement has intensified because Costco’s valuation is the battleground.
What today’s analyses are really saying: valuation, not operations, is the swing factor
A prominent Dec. 18 analysis frames Costco as a “great company” that may still deliver a rougher 2026 for shareholders if the market decides the premium is too high for the growth rate—specifically calling out the stock’s elevated earnings multiple and the absence of guidance. [12]
On the other side, recent bullish commentary argues that Costco’s valuation has already cooled from earlier extremes and that the dip creates a more attractive entry point—one bullish take says the stock is around 42x forward earnings estimates, down from roughly 58x earlier in 2025, and notes COST is down about 6% for the year. [13]
And on the “quant valuation” side, one DCF-based model published this week concludes the shares screen as materially overvalued—estimating intrinsic value around $581 per share and suggesting the stock trades roughly 48% above that modeled value (a reminder that models are assumption-driven, not facts). [14]
In plain English: the fundamentals look strong, but the valuation debate is loud—and getting louder.
The business case bulls lean on: why Costco keeps earning a premium
Even skeptics tend to acknowledge Costco’s operating strengths:
- High-volume, low-margin model with recurring membership revenue
- Scale and purchasing power that support value pricing
- Private-label strength (Kirkland Signature) as consumers trade down selectively while still buying quality
- Digital acceleration (20%+ “digitally-enabled” comp growth in the latest quarter)
- A large and expanding warehouse base (923 locations globally) [15]
Reuters’ post-earnings coverage adds another dimension: it notes Costco’s comparable sales rose 6.4%, and highlights how higher-income households can still shift spending toward value retailers in an uncertain environment. Reuters also points to Costco leaning on private label and expanding convenience options such as same-day delivery partnerships, reinforcing the idea that Costco isn’t standing still operationally. [16]
The bear case: the “premium multiple” can punish even good results
The bearish framing doesn’t argue Costco is broken. It argues the stock could de-rate if any of the following happen:
- Growth cools from strong single digits to lower levels
- Renewal rates drift down further (even slightly)
- Competition intensifies and pressures traffic or pricing
- The market environment shifts toward demanding lower multiples for consumer names
The Roth downgrade thesis specifically flags concern around decelerating trends and competition (Sam’s Club, BJ’s). [17]
Meanwhile, Costco’s own reported renewal-rate slip—though small—has become a key data point bears cite as evidence that even Costco’s famously sticky membership engine can show some sensitivity as the member mix changes. [18]
What to watch next: three dates on the Costco calendar
For investors tracking Costco stock into year-end and early 2026, three scheduled events stand out:
- December Sales Results:January 7, 2026 (1:15 p.m. PT) [19]
- Annual Shareholders’ Meeting:January 15, 2026 (2:00 p.m. PT) [20]
- Q2 2026 Earnings Call:March 5, 2026 (2:00 p.m. PT) [21]
For a stock like Costco—where sentiment can swing on incremental changes—monthly sales updates and renewal/traffic commentary often matter almost as much as quarterly EPS.
Bottom line for Dec. 18, 2025: Costco stock is a referendum on “quality vs. price”
The most current Costco stock narrative is not about whether the company is executing. The numbers show it is: sales up 8.2%, comps +6.4%, digital comp +20.5%, membership fees up, global footprint expanding. [22]
The market question on Dec. 18 is narrower—and tougher: how much are investors willing to pay for that quality in 2026? Today’s forecasts range from deeply cautious (targets in the high $700s) to confidently bullish (targets north of $1,100), with the debate centered on valuation, membership durability, and the next leg of growth. [23]
References
1. www.fool.com, 2. investor.costco.com, 3. www.fool.com, 4. www.fool.com, 5. www.fool.com, 6. www.fool.com, 7. stockanalysis.com, 8. www.marketbeat.com, 9. au.investing.com, 10. stockanalysis.com, 11. stockanalysis.com, 12. www.fool.com, 13. www.fool.com, 14. simplywall.st, 15. investor.costco.com, 16. www.reuters.com, 17. www.fool.com, 18. www.fool.com, 19. investor.costco.com, 20. investor.costco.com, 21. investor.costco.com, 22. investor.costco.com, 23. stockanalysis.com
