Is Costco Stock a Long-Term Buy?

By Neil Patel – Mar 1, 2026 at 5:15PM ESTKey PointsCostco is able to post solid financial gains in seemingly any macro environment. Everyday low prices, which keep customers coming back, are possible due to the company’s huge scale.The market continues to place a sizable premium on this retail stock. Investors should realize that owning boring businesses can still lead to fantastic returns. Costco Wholesale (COST +2.51%) is proof. In the past decade, its shares have produced a total return of 662% (as of Feb. 26), more than doubling the S&P 500's comparable performance. Is this top retail stock a long-term buy? Image source: Getty Images. Understand the fundamentals driving Costco It's important that investors first figure out whether this is a high-quality business. If it isn't, it shouldn't even be on the watch list. In this case, there are some notable reasons to believe that Costco is an elite company. Its steady financial performance is one indicator. In the past five years, Costco's revenue increased at a compound annual rate of 9.3%. There was not a single down year. This was driven by consistent same-store sales growth. The business is a favorite choice among consumers, even during times of economic turmoil, such as the COVID-19 pandemic and periods of above-normal inflation. Over the past decade, online shopping has commanded a bigger share of the overall retail sector, thanks in large part to the rise of Amazon. This hasn't deterred Costco. It continues to add new members each quarter. The company's competitive edge stems from its massive scale, with Q1 2026 (ended Nov. 23) net sales of $66 billion. As Costco carries fewer stock-keeping units than other supermarkets, it buys huge quantities of a smaller number of goods from suppliers, which leads to bargaining power. The end result: everyday low prices for shoppers. Add this to a no-frills warehouse environment, and customers appreciate the value proposition. ExpandNASDAQ: COSTCostco WholesaleToday's Change(2.51%) $24.79Current Price$1011.53Key Data PointsMarket Cap$449BDay's Range$989.78 - $1014.3752wk Range$844.06 - $1067.08Volume136KAvg Vol2.6MGross Margin12.88%Dividend Yield0.51% What the market is saying If you agree that Costco is a fine enterprise, the next step is to gauge what the market thinks of the business. Is this a diamond in the rough? Or does the investment community fully understand Costco's merits? Given that this company sports a significant market cap of $445 billion, the latter situation is reality. Everyone is aware of the durability of this business. Consequently, the valuation is not cheap. In fact, it's extremely expensive. Costco stock trades at a price-to-earnings ratio of 53.6. For comparison's sake, this is a 15% premium to Nvidia, which has been the hottest company for years now. Many observers will question whether the retailer is deserving of a higher multiple than the booming artificial intelligence (AI) stock. Investors should wait for a meaningful pullback before even considering a purchase of the shares. If valuation isn't that big of a concern for you, dollar-cost averaging might make sense, or adopting a plan of buying every month to take advantage of different price points.Read NextFeb 26, 2026 •By Leo SunWhere Will Costco (COST) Stock Be in 1 Year?Feb 25, 2026 •By Rick Munarriz3 Retail Stocks to Buy Now That President Trump's Tariffs Have Been Struck Down by the Supreme CourtFeb 22, 2026 •By John BallardCostco Stock Is Soaring, but Is It Getting Ahead of Itself?Feb 22, 2026 •By Will Healy1 Reason I Haven't Bought Costco Stock -- and Probably Never WillFeb 20, 2026 •By Micah Zimmerman3 Monster Stocks to Hold for the Next 20 YearsFeb 19, 2026 •By Daniel SparksBack Near $1,000, Is Costco Stock a Buy Now?About the AuthorNeil Patel is a contributing Motley Fool stock market analyst covering consumer staples, consumer discretionary, financials, information technology, and communication services. Prior to The Motley Fool, Neil worked in corporate finance roles at JPMorgan Chase and Capital One. He also has experience working on a start-up in the cryptocurrency space. He holds a bachelor’s degree in business administration with a specialization in finance from Ohio State University.TMFNeilPatelStocks MentionedCostco WholesaleNASDAQ: COST$1,011.53(+2.51%)+$24.79*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.