← Costco Wholesale Corporation
COST · Forward model
Revenue by vertical, 20 quarters out
Each segment is projected from its own operating driver, rolled up into consolidated cash flow, and discounted back to a fair value per share. The assumptions below are editable — change them and every number on this page moves with them.
Costco's income statement carries exactly two revenue lines - net sales and membership fees - and they sum to reported total revenue in all 19 quarters of history here, to the dollar. That is the split this model uses. Costco also reports three geographic segments, but the segment note gives TOTAL revenue per geography with membership fees already inside it and splits neither line, so a geographic model would have to abandon both operational drivers; it is not built. One convention crosses the disclosure line. Membership fees are carried at 100% EBITDA flow-through and net sales take the residual 2.949%. Neither number is disclosed: Costco allocates no cost between the two lines. The pair is constructed so consolidated EBITDA reconciles exactly to the reported $3,412m in the basis quarter, and if one side is changed the other must move with it. On this convention the fee line is about 2% of revenue and about 40% of EBITDA, so it drives the valuation far harder than its size. Seasonality here is mostly fiscal-calendar mechanics rather than consumer behaviour. Costco's Q1 to Q3 are 12 weeks and Q4 is 16, so the Q4 factors of 1.226 and 1.234 mostly count weeks; dividing them out leaves per-week residuals within about 1.5% of flat. The factors are indexed to Costco's OWN fiscal quarter labels, the same labels the site's revenue series uses, so seasonality position 4 is the 16-week quarter ending in late August, not a calendar holiday quarter. Costco issues no revenue, margin or EPS guidance. The only quantified forward statements anywhere in the filings or on the call are FY2026 capex of approximately $6.5bn and 26 net new warehouses. Nothing in this model is company guidance, and the consensus figures quoted in the scenarios are third-party aggregates. Consensus EPS for Costco is also not on the company's GAAP basis - it excludes the discrete stock-compensation tax benefits Costco discloses - so it is never paired with a GAAP figure here. Known limitation: FY2028 is a 53-week fiscal year whose Q4 runs 17 weeks. A four-factor seasonality driver cannot express a one-off extra week, so FY2028 Q4 is understated by roughly 4.5% and FY2029 Q4's year-on-year growth is overstated by about the same.
Latest: $111.41B (2031Q3E)
| Period | Value |
|---|---|
| 2022Q1 | $50.36B |
| 2022Q2 | $51.90B |
| 2022Q3 | $52.60B |
| 2022Q4 | $72.09B |
| 2023Q1 | $54.44B |
| 2023Q2 | $55.27B |
| 2023Q3 | $53.65B |
| 2023Q4 | $78.94B |
| 2024Q1 | $57.80B |
| 2024Q2 | $58.44B |
| 2024Q3 | $58.52B |
| 2024Q4 | $79.70B |
| 2025Q1 | $62.15B |
| 2025Q2 | $63.72B |
| 2025Q3 | $63.20B |
| 2025Q4 | $86.16B |
| 2026Q1 | $67.31B |
| 2026Q2 | $69.60B |
| 2026Q3 | $70.53B |
| 2026Q4E | $97.24B |
| 2027Q1E | $75.48B |
| 2027Q2E | $77.57B |
| 2027Q3E | $77.39B |
| 2027Q4E | $106.68B |
| 2028Q1E | $82.79B |
| 2028Q2E | $85.07B |
| 2028Q3E | $84.86B |
| 2028Q4E | $116.95B |
| 2029Q1E | $90.75B |
| 2029Q2E | $93.23B |
| 2029Q3E | $92.98B |
| 2029Q4E | $128.13B |
| 2030Q1E | $99.40B |
| 2030Q2E | $102.10B |
| 2030Q3E | $101.81B |
| 2030Q4E | $140.28B |
| 2031Q1E | $108.81B |
| 2031Q2E | $111.75B |
| 2031Q3E | $111.41B |
What drives each segment
Merchandise net sales
Capacity × utilisation × priceCostco sells merchandise at a deliberately capped mark-up, so the operating constraint is delivered warehouse capacity times what each warehouse turns over. Revenue is warehouses open times net sales per warehouse. Unit growth is a slow, capital-bound, disclosed number - 24 to 29 net new clubs a year, 26 planned for FY2026 - and the volatile part is comparable sales, which the company itself decomposes into ticket, frequency, gasoline price and currency.
Latest: $109.37B (2031Q3E)
| Period | Value |
|---|---|
| 2022Q1 | $49.42B |
| 2022Q2 | $50.94B |
| 2022Q3 | $51.61B |
| 2022Q4 | $70.76B |
| 2023Q1 | $53.44B |
| 2023Q2 | $54.24B |
| 2023Q3 | $52.60B |
| 2023Q4 | $77.43B |
| 2024Q1 | $56.72B |
| 2024Q2 | $57.33B |
| 2024Q3 | $57.39B |
| 2024Q4 | $78.19B |
| 2025Q1 | $60.98B |
| 2025Q2 | $62.53B |
| 2025Q3 | $61.97B |
| 2025Q4 | $84.43B |
| 2026Q1 | $65.98B |
| 2026Q2 | $68.24B |
| 2026Q3 | $69.15B |
| 2026Q4E | $95.37B |
| 2027Q1E | $74.05B |
| 2027Q2E | $76.12B |
| 2027Q3E | $75.90B |
| 2027Q4E | $104.65B |
| 2028Q1E | $81.24B |
| 2028Q2E | $83.50B |
| 2028Q3E | $83.24B |
| 2028Q4E | $114.76B |
| 2029Q1E | $89.07B |
| 2029Q2E | $91.53B |
| 2029Q3E | $91.23B |
| 2029Q4E | $125.75B |
| 2030Q1E | $97.59B |
| 2030Q2E | $100.26B |
| 2030Q3E | $99.92B |
| 2030Q4E | $137.71B |
| 2031Q1E | $106.85B |
| 2031Q2E | $109.76B |
| 2031Q3E | $109.37B |
Assumptions & reasoning
- The 2.949% EBITDA margin is derived, not disclosed. Consolidated EBITDA of $3,412m (operating income $2,815m plus $597m of D&A) less the $1,373m of membership fees carried at full flow-through leaves $2,039m on $69,154m of net sales. It is the residual half of the flow-through convention described in the model notes.
- All consolidated capex sits on this vertical: the membership line consumes no property, plant or equipment of its own. Capex intensity of 2.18% is the company's stated FY2026 plan of approximately $6.5bn over modelled FY2026 net sales of about $298bn.
- Costco discloses net sales by merchandise category but NOT by geography. The segment note reports TOTAL revenue per geography, which already contains membership fees, so no geographic net-sales split is constructible and none is attempted here.
- Gasoline added 221 basis points and currency 104 basis points to the quarter's 11.6% net-sales growth, both quantified by the company. The base case carries neither forward as a tailwind nor reverses them; the bear case reverses them.
Membership fees
Subscribers × ARPUA recurring annual fee recognised ratably over the twelve-month term, from a paid base that renews at 92.2% in the U.S. and Canada and 89.7% worldwide. Revenue is paid members times the blended annual fee. It is about 2% of revenue and, on the flow-through convention this model uses, roughly 40% of EBITDA - which is why the valuation is far more sensitive to this line than its size suggests.
Latest: $2.04B (2031Q3E)
| Period | Value |
|---|---|
| 2022Q1 | $946M |
| 2022Q2 | $967M |
| 2022Q3 | $984M |
| 2022Q4 | $1.33B |
| 2023Q1 | $1.00B |
| 2023Q2 | $1.03B |
| 2023Q3 | $1.04B |
| 2023Q4 | $1.51B |
| 2024Q1 | $1.08B |
| 2024Q2 | $1.11B |
| 2024Q3 | $1.12B |
| 2024Q4 | $1.51B |
| 2025Q1 | $1.17B |
| 2025Q2 | $1.19B |
| 2025Q3 | $1.24B |
| 2025Q4 | $1.72B |
| 2026Q1 | $1.33B |
| 2026Q2 | $1.35B |
| 2026Q3 | $1.37B |
| 2026Q4E | $1.87B |
| 2027Q1E | $1.43B |
| 2027Q2E | $1.45B |
| 2027Q3E | $1.49B |
| 2027Q4E | $2.03B |
| 2028Q1E | $1.55B |
| 2028Q2E | $1.57B |
| 2028Q3E | $1.61B |
| 2028Q4E | $2.20B |
| 2029Q1E | $1.68B |
| 2029Q2E | $1.70B |
| 2029Q3E | $1.74B |
| 2029Q4E | $2.38B |
| 2030Q1E | $1.82B |
| 2030Q2E | $1.84B |
| 2030Q3E | $1.89B |
| 2030Q4E | $2.57B |
| 2031Q1E | $1.96B |
| 2031Q2E | $1.99B |
| 2031Q3E | $2.04B |
Assumptions & reasoning
- The 100% flow-through is a convention, not a disclosure. Fee revenue carries no merchandise cost, and the member-service labour that supports it sits inside warehouse SG&A, which Costco does not allocate. This convention and the 2.949% residual on net sales are two halves of one choice: together they reproduce consolidated EBITDA of $3,412m exactly.
- Capex is zero here by construction. Every dollar of property, plant and equipment is carried on the net-sales vertical, so the two lines do not double-count the warehouse estate the fee base depends on.
- The base case does NOT assume another fee increase. The September 2024 increase to $65 Gold Star and $130 Executive was about 25% of membership-fee growth in the quarter, down from 35% year to date, and the company says it laps out. Stripping it leaves 3.8% a year of fee-per-member growth, which is what the ARPU drift carries. The trailing deseasonalised rate of 2.54% a quarter is not carried forward because a quarter of it is about to disappear.
- Both renewal rates fell year on year - U.S. and Canada from 92.7% to 92.2%, worldwide from 90.2% to 89.7% - which the company attributes to memberships sold online and through digital promotions entering the calculation. That risk is expressed in the bear case, not in the base attach glide.
Where each case comes from
Bear case — primary sources
The primary sources this case is built from — filings, calls and posts. Where they are claims by an interested party rather than disclosures, every number in the Bear column is what happens if they are taken at face value.
What the company itself stripped out
- Jun 3, 2026 Higher gasoline prices positively impacted net sales by $1,367, or 221 basis points.
- Jun 3, 2026 changes in foreign currencies positively impacted net sales by approximately $643, or 104 basis points.
- Jun 3, 2026 At the end of the third quarter of 2026, our renewal rates were 92.2% in the U.S. and Canada and 89.7% worldwide.
Bull case — primary sources
The primary sources this case is built from — filings, calls and posts. Where they are claims by an interested party rather than disclosures, every number in the Bull column is what happens if they are taken at face value.
The mix shift management quantified
What the pipeline is being paid for
- Jun 3, 2026 We have a current intention to spend approximately $6,500 during fiscal 2026, as we continue to invest in new warehouse openings, remodel existing locations, expand our depot network, and further develop our digitally-enabled businesses.
- Aug 24, 2026 Bernstein (Zhihan Ma) maintained a Buy rating with a $1,194 price target on 6 August 2026.
Fee 2029 case — primary sources
The primary sources this case is built from — filings, calls and posts. Where they are claims by an interested party rather than disclosures, every number in the Fee 2029 column is what happens if they are taken at face value.
The two increases that are actually in the filings
- Oct 9, 2024 Effective September 1, 2024, we increased our membership fees in the U.S. and Canada for Gold Star, Business, and Business affiliates to $65 per year.
- Oct 18, 2017 Effective June 1, 2017, we increased our annual membership fees in the U.S. and Canada for Gold Star (individual), Business and Business add-on by $5 to $60 per year.
The base the step is sized on
- Jun 3, 2026 Total paid members (000s) 82,900 ... Total cardholders (000s) 148,500.
- Jun 3, 2026 At the end of the third quarter of 2026 we operated 928 warehouses worldwide: 637 in the United States (U.S.) located in 47 states, Washington, D.C., and Puerto Rico, 115 in Canada
- May 28, 2026 At Q3 end, we had 41.2 million paid executive memberships, up 9.6% versus last year.
From cash flow to fair value
| Present value of free cash flow, 20 quarters | $33.58B |
| Terminal-year revenue | $472.25B |
| Terminal-year EBITDA | $23.35B |
| Exit multiple, on ebitda | 24.0x |
| Terminal value | $560.34B |
| Discounted at 8.0% a year, terminal value becomes | $381.36B |
| Enterprise value | $414.93B |
| Net cash | $14.22B |
| Equity value | $429.15B |
| Shares | 0.44B |
| Fair value per share | $965.62 |
| Against the current price of $934.66 | +3% |
Costco trades at 30.3x trailing EBITDA - $417.5bn of enterprise value over $13.79bn of TTM EBITDA, against StockAnalysis's independently computed 29.90x on 26 August. The base case exits at 24x: below today's multiple, above the high-teens range Costco held before 2020. At an 8% discount rate over twenty quarters the terminal value carries most of the enterprise value, so the exit multiple matters more than any driver. The bear and bull cases carry 20x and 28x for exactly that reason.
Read the other way round: at $934.66 the market is paying 23.1x terminal-year revenue, holding every other assumption on this page fixed. That is the number to argue about.
The projected path
| Quarter | Merchandise net sales | Membership fees | Revenue | YoY | EBITDA | Capex | FCF | R40 | PV of FCF |
|---|---|---|---|---|---|---|---|---|---|
| 2026 Q4E | $95.37B | $1.87B | $97.24B | +13% | $4.71B | $2.08B | $1.96B | +15 | $1.92B |
| 2027 Q1E | $74.05B | $1.43B | $75.48B | +12% | $3.65B | $1.61B | $1.52B | +14 | $1.46B |
| 2027 Q2E | $76.12B | $1.45B | $77.57B | +11% | $3.74B | $1.65B | $1.56B | +13 | $1.47B |
| 2027 Q3E | $75.90B | $1.49B | $77.39B | +10% | $3.78B | $1.64B | $1.59B | +12 | $1.48B |
| 2027 Q4E | $104.65B | $2.03B | $106.68B | +10% | $5.21B | $2.26B | $2.20B | +12 | $2.00B |
| 2028 Q1E | $81.24B | $1.55B | $82.79B | +10% | $4.03B | $1.75B | $1.70B | +12 | $1.51B |
| 2028 Q2E | $83.50B | $1.57B | $85.07B | +10% | $4.14B | $1.80B | $1.74B | +12 | $1.52B |
| 2028 Q3E | $83.24B | $1.61B | $84.86B | +10% | $4.18B | $1.79B | $1.78B | +12 | $1.52B |
| 2028 Q4E | $114.76B | $2.20B | $116.95B | +10% | $5.75B | $2.47B | $2.45B | +12 | $2.06B |
| 2029 Q1E | $89.07B | $1.68B | $90.75B | +10% | $4.45B | $1.91B | $1.89B | +12 | $1.56B |
| 2029 Q2E | $91.53B | $1.70B | $93.23B | +10% | $4.56B | $1.96B | $1.93B | +12 | $1.56B |
| 2029 Q3E | $91.23B | $1.74B | $92.98B | +10% | $4.60B | $1.96B | $1.97B | +12 | $1.56B |
| 2029 Q4E | $125.75B | $2.38B | $128.13B | +10% | $6.33B | $2.69B | $2.71B | +12 | $2.11B |
| 2030 Q1E | $97.59B | $1.82B | $99.40B | +10% | $4.89B | $2.09B | $2.09B | +12 | $1.60B |
| 2030 Q2E | $100.26B | $1.84B | $102.10B | +10% | $5.01B | $2.14B | $2.14B | +12 | $1.60B |
| 2030 Q3E | $99.92B | $1.89B | $101.81B | +9% | $5.05B | $2.13B | $2.18B | +12 | $1.60B |
| 2030 Q4E | $137.71B | $2.57B | $140.28B | +9% | $6.95B | $2.94B | $2.99B | +12 | $2.15B |
| 2031 Q1E | $106.85B | $1.96B | $108.81B | +9% | $5.37B | $2.28B | $2.30B | +12 | $1.63B |
| 2031 Q2E | $109.76B | $1.99B | $111.75B | +9% | $5.50B | $2.34B | $2.35B | +12 | $1.63B |
| 2031 Q3E | $109.37B | $2.04B | $111.41B | +9% | $5.54B | $2.33B | $2.39B | +12 | $1.63B |
Every row is projected. A year-over-year change is shown only where the quarter it compares against exists — an em dash means there is no comparable quarter, not a flat year.
Model revisions
Assumptions are marked to reality as each quarter prints. Every change is appended here, with the fair value the model produced at the time, so the model's own history stays visible.
| Date | Changed | Fair value then | Note |
|---|---|---|---|
| 2026-08-27 | all | $965.62 | First published. Built from the verified research brief on the FY2026 Q3 basis quarter (12 weeks ended 10 May 2026), with seasonality factors derived by ratio-to-centred-moving-average over the 19 disclosed quarters from FY2022 Q1. |