December 15, 2025 — Costco Wholesale Corporation (NASDAQ: COST) stock traded lower on Monday as Wall Street digested a fresh downgrade that zeroed in on a key investor question heading into 2026: Is Costco’s premium valuation still justified if membership and traffic trends cool, even slightly? [1]
As of the latest available trading data, COST changed hands around the mid-$870s, down about 1% on the day, after opening near $883 and dipping as low as the mid-$874s in early trading. [2]
What’s driving Costco stock on December 15, 2025
Roth turns bearish: “Small misses” could trigger a re-rating
The most market-moving headline for Costco stock on December 15 is a Roth Capital Partners downgrade to Sell, paired with a sharply lower price target of $769 (down from $906). Roth’s argument is less about a single quarter and more about what happens when a “priced-for-perfection” stock runs into even modest deceleration. [3]
Roth flagged what it described as weakening underlying metrics, including:
- Renewal rates slipping again in fiscal Q1 (Roth cited global renewal at 89.7% and U.S./Canada at 92.2%, down from recent highs). [4]
- Paid member growth slowing sharply, with Roth pointing to about 400,000 paid member adds quarter-over-quarter, versus more than 1 million per quarter in recent years. [5]
- Comparable traffic growth decelerating to 3.1% year-over-year in Q1, down from 3.7% in the prior quarter and above 5% in recent fiscal years. [6]
The key takeaway: Roth believes Costco’s risk/reward skews to the downside given the stock’s valuation and the possibility that momentum in traffic and membership could soften. [7]
Bulls respond: TD Cowen reiterates Buy, points to AI-driven efficiency
Not everyone is stepping back. Also published on December 15, TD Cowen reiterated a Buy rating with a $1,175 price target, arguing Costco’s value proposition remains powerful—and that investments in AI and automation can help improve execution across high-impact areas like checkout optimization, gas, and pharmacy. [8]
TD Cowen also framed Costco’s multiple as more attractive after recent weakness, while highlighting initiatives aimed at improving engagement and, ultimately, membership renewal rates. [9]
Bottom line: Today’s tape reflects a classic Costco setup—one camp says quality is unquestioned but the price is too high, while the other says quality plus operational leverage can still earn the premium. [10]
The fundamentals: Costco’s latest earnings were strong—especially digital
The downgrade debate is happening just days after Costco reported fiscal Q1 2026 results (the 12 weeks ended November 23, 2025) that showed continued growth, with digital outperformance standing out. [11]
Key reported figures include:
- Net sales:$65.98 billion, up 8.2% year-over-year [12]
- Total revenue:$67.31 billion [13]
- EPS:$4.50, above Wall Street expectations cited in major coverage [14]
- Comparable sales (total company):+6.4% [15]
- Digitally enabled comparable sales:+20.5% (a major gap vs. overall comps) [16]
- Membership fees (quarter):$1.329 billion [17]
Reuters noted Costco also benefited from delivery partnerships—highlighting same-day delivery with Instacart in the U.S. and UberEats / DoorDash internationally—another signal that Costco’s digital ecosystem is becoming a more meaningful growth lever. [18]
Costco’s scale story remains intact: warehouses, members, and new-store productivity
Costco ended the quarter operating 923 warehouses globally (including 633 in the U.S. and Puerto Rico), underscoring the scale that supports its low-margin, high-volume model. [19]
Business coverage following the earnings release also pointed to:
- Nearly 146 million cardholders (membership base) [20]
- Strong U.S. performance: 5.9% comparable sales, driven by 2.6% traffic growth and a 3.2% increase in transaction size [21]
- A striking data point on expansion productivity: newer warehouses generating annualized sales above $190 million per warehouse, compared with about $150 million two years prior [22]
That last point matters for long-term investors: Costco’s most durable growth engine is often steady, repeatable warehouse expansion, and higher productivity at newer stores can support earnings power even if mature-store comps moderate.
The real argument: Costco’s valuation leaves less room for error
Costco is widely admired for customer loyalty and execution. The friction today is about the stock’s valuation sensitivity—how much downside can show up if growth slows from “great” to merely “good.”
As of December 15, valuation and financial snapshots showed:
- Market cap: about $389 billion [23]
- Trailing P/E: about 47; forward P/E: about 43 [24]
- EV/EBITDA: about 29 [25]
- Thin margins typical of the model: ~3.8% operating margin and ~3.0% profit margin [26]
Roth’s core warning is that with Costco priced at a premium multiple, even small disappointments—especially in traffic and membership-related metrics—can produce an outsized share price reaction. [27]
COST stock forecast: where Wall Street sees the shares going next
Despite today’s downgrade, broader Wall Street positioning remains constructive. A widely followed snapshot of analyst expectations showed:
- Average price target around $1,070, implying roughly 20%+ upside from current levels [28]
- A consensus stance that still leans positive (“Buy”) [29]
That said, the dispersion is real—and today’s headlines widened it further:
- Bear case (Roth): $769 price target after downgrade [30]
- Bull case (TD Cowen): $1,175 price target with Buy rating [31]
- Goldman Sachs: price target lowered to $1,171 while maintaining a Buy rating [32]
- JPMorgan: price target nudged to $1,027 with an Overweight rating [33]
- Bernstein: raised price target to $1,146 on growth outlook [34]
What this means for investors: the “average” forecast can look attractive, but Costco’s stock may trade more on confidence in membership durability and traffic resiliency than on a simple upside-to-target calculation.
Tariffs are an underappreciated headline risk still in the background
One reason Costco has drawn unusual attention in late 2025 is a high-profile tariffs fight moving through the courts. On December 1, Reuters reported that Costco sued the U.S. government to preserve potential tariff refunds tied to a Supreme Court dispute over the use of emergency powers to impose tariffs. [35]
According to Reuters, Costco argued the legal uncertainty could interfere with businesses’ ability to recoup tariffs that may ultimately be ruled unlawful, and said U.S. Customs and Border Protection denied its request for more time to finalize calculations. [36]
Reuters also reported Costco has been adapting operationally—reducing suppliers, leaning more on local sourcing, and expanding reliance on its Kirkland private label brand. [37]
For Costco stock, the tariff story is less about a single-quarter hit and more about:
- potential merchandising complexity and sourcing disruption,
- investor uncertainty around cost of goods and category availability,
- and headline-driven volatility that can weigh on a high-multiple stock.
Expansion headlines: a new Costco in Texas, and why local builds matter to COST investors
Corporate-scale numbers can feel abstract—until they show up as concrete store builds. On December 15, a Texas business report highlighted development of a new Costco warehouse in Liberty Hill, northwest of Austin: a 160,000-square-foot project estimated at $62.6 million, with construction still underway and no official opening date announced. [38]
While a single warehouse won’t move a $389 billion company by itself, the story is a reminder that Costco’s model still compounds through:
- steady warehouse growth,
- new-market penetration,
- and incremental membership monetization layered on top of that footprint.
What to watch next for Costco stock
With Costco, the market tends to reward consistency—and punish even minor wobbles when the valuation is rich. On today’s news flow, investors will likely focus on five signals:
- Renewal rates: whether the recent slippage stabilizes or continues. [39]
- Paid member growth: whether additions re-accelerate beyond the slowdown highlighted by Roth. [40]
- Traffic and ticket size: especially if consumers trade down or shift trips to competitors. [41]
- Digital momentum: whether the “digitally enabled” growth rate remains meaningfully above total comps. [42]
- Policy and tariff uncertainty: developments in litigation and any operational impacts from sourcing changes. [43]
The takeaway: Costco is still executing—now the stock has to defend the multiple
Costco’s recent quarter reinforced why the company remains a standout in U.S. retail: growing sales, expanding membership fee revenue, and scaling digital faster than the core business. [44]
But the market’s message on December 15 is that great execution may no longer be enough on its own. With analysts split—Roth warning of downside skew and TD Cowen arguing AI-driven upside—Costco stock is entering 2026 with a clear spotlight on membership health, traffic durability, and the ability to keep compounding growth without giving the market a reason to compress the valuation. [45]
References
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