1 Reason I Haven't Bought Costco Stock -- and Probably Never Will

By Will Healy – Feb 22, 2026 at 4:25AM ESTKey PointsCostco's P/E ratio is much higher than its competitors.A long-term record of consistency likely helps its stock maintain a premium price.These 10 Stocks Could Mint the Next Wave of Millionaires ›NASDAQ: COSTCostco WholesaleMarket Cap$437BToday's Changeangle-down(-0.30%) $2.99Current Price$984.83Price as of February 20, 2026 at 3:58 PM ETCostco's success is well known, reducing the opportunity in its stock.Objectively speaking, I'm a huge fan of Costco Wholesale (COST 0.30%). The company offers high-quality products at low prices, and an annual membership fee that starts at $65 per year in the U.S. unlocks this value for Americans living in major metro areas. Moreover, it has found success on four different continents, avoiding the cultural missteps that stymied peers like Walmart and Home Depot in attempted expansions outside of North America. Despite these benefits, it is unlikely I will ever own the stock -- here's why. Image source: Getty Images. Why I will likely always avoid Costco stock Valuation is the reason I will probably never buy Costco stock. As of the time of this writing, its P/E ratio is about 54. That is higher than Walmart at 45 or Amazon, which currently sells at 28 times earnings. Although I might overlook that earnings multiple for a high-growth stock, unfortunately, that does not describe Costco. ExpandNASDAQ: COSTCostco WholesaleToday's Change(-0.30%) $-2.99Current Price$984.83Key Data PointsMarket Cap$437BDay's Range$978.00 - $987.7052wk Range$844.06 - $1067.08Volume68KAvg Vol2.7MGross Margin12.88%Dividend Yield0.53% In the first quarter of fiscal 2026 (ended Nov. 23, 2025), its $67 billion in total revenue grew by 8%, the same growth rate it reported in fiscal 2025. Likewise, net income of $2 billion increased by 11%, just above the 10% profit growth in fiscal 2025. Although such growth could make it one of the best retail stocks to hold over the next 10 years, that is an extremely high valuation for a stock whose profit growth barely reaches double-digit percentage rates. Additionally, Costco stock is unlikely to sell off without either internal missteps or a broad market sell-off. Costco has executed consistently over the years, meaning it has avoided critical mistakes that have hurt its competitors. Furthermore, if a broad market sell-off occurs, Costco will probably become somewhat cheaper, but other stocks I might buy will also likely fall in value under such circumstances. Investors may have to wait a long time for a "low" valuation. The company's P/E ratio has not fallen below 30 since 2019, and the last time the earnings multiple dipped below 20 was in 2010. Thus, even if a downturn occurs, Costco is unlikely to become the most attractive retail stock. Costco is off my buy list Due to its valuation, Costco is a high-quality stock that I am unlikely to ever buy. Of its brick-and-mortar retail cohort, Costco is arguably the most successful when factoring in international performance. Unfortunately, its track record of success is also well understood among investors, and that has led to a situation where a moderate growth company attracts a premium valuation. Hence, while its longest-term investors should probably stay in its stock, new investors should find other stocks trading at fairer valuations.Read NextFeb 22, 2026 •By John BallardCostco Stock Is Soaring, but Is It Getting Ahead of Itself?Feb 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?Feb 19, 2026 •By Neil PatelWhere Will Costco Be in 5 Years?Feb 19, 2026 •By Leo SunIs Costco (COST) Stock Going to $1,200?Feb 17, 2026 •By Neil PatelBest Consumer Stock to Buy Right Now: Costco or Home Depot?About the AuthorWill Healy is a contributing Motley Fool stock market analyst covering technology and consumer goods industries.

Before The Motley Fool, Will was a freelance writer covering stocks and personal finance for MSN Money, Yahoo! Finance, and Nasdaq. Earlier in his career, he was an expert in geographic information systems, applying spatial and IT skills to perform RF and demographic analysis in the telecom industry. He holds a bachelor’s degree in journalism from Texas A&M University and an MBA in finance and strategy from the University of Texas at Dallas.TMFWillHealyX@HealyWritingStocks MentionedCostco WholesaleNASDAQ: COST$984.83 (0.30%) $2.99WalmartNASDAQ: WMT$122.97 (1.52%) $1.90AmazonNASDAQ: AMZN$210.16 (+2.59%) $+5.30Home DepotNYSE: HD$382.25 (+0.97%) $+3.67*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.