Costco has seen steady growth in same-store sales and net income, with new warehouse openings indicating strong demand. Despite a dip from its peak, market expectations for the stock remain high. The company’s success in compounding capital showcases its strength in the retail sector.

With consistent growth in same-store sales, Costco’s financial performance has been robust. The company’s focus on quality products at competitive prices has led to impressive net sales of $270 billion in fiscal 2025. Operating with a limited product range gives Costco negotiating power with suppliers, benefiting both the company and customers.

Costco’s membership model drives recurring revenue, with memberships totaling $5.3 billion in fiscal 2025. The company’s strategic focus on growth, both domestically and internationally, has supported its increasing net income. Despite challenges like the pandemic, Costco’s financial stability and growth potential make it appealing to long-term investors.

While Costco’s track record of compounding capital is impressive, current valuation may give investors pause. The stock’s price-to-earnings ratio of 48.1 requires careful consideration. Waiting for a better entry point or dollar-cost averaging over time may be prudent strategies. Despite its strengths, Costco’s valuation reflects its status as a top-tier company.

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Read more at Yahoo Finance: Is Costco Stock a Long-Term Buy?