Costco's Sales Momentum and Stock Valuation: A Buying Opportunity in 2026?

Costco Wholesale Corporation (COST) has long been a cornerstone of the retail sector, celebrated for its membership model and value-driven offerings. As 2026 approaches, investors are scrutinizing whether the company's recent sales performance and e-commerce growth justify a strategic entry point for long-term investments. This analysis evaluates Costco's December 2025 sales results, its digital transformation, and stock valuation metrics to determine if the current market dynamics present a compelling opportunity.

Sales Momentum: A Resilient Foundation

Costco's December 2025 sales results underscore its resilience in a challenging economic environment. The company reported net sales of $29.86 billion, reflecting an 8.5% year-over-year increase from $27.52 billion in the same period last year. This growth was driven by robust performance across its core markets: U.S. comparable sales rose 6.0%, Canada surged 8.4%, and international markets delivered a double-digit increase of 10.6%. Excluding the volatility of gasoline prices and foreign exchange fluctuations, total comparable sales grew by 6.2%, highlighting the strength of Costco's core retail operations.

The retailer's digital channels further amplified its momentum. Digitally enabled sales rose by 18.9% in the five-week December period. This acceleration in digital adoption positions Costco to capitalize on the broader shift toward omnichannel retailing, a trend that has become critical for sustaining growth in the post-pandemic era.

E-Commerce Growth: A Strategic Edge

Costco's e-commerce strategy has evolved from a supplementary channel to a core growth driver. In fiscal year 2025, the company's e-commerce sales reached $19.6 billion, reflecting a 15% year-over-year increase. This growth outpaced many retail peers, including a 14.8% year-over-year surge in Q3 2025. While Walmart's e-commerce sales surged 27% in the same quarter, Costco's approach prioritizes digital support for its physical stores, leveraging services like Costco Logistics to boost delivery volumes by 31% in Q3.

The retailer's focus on logistics and customer experience has been pivotal. By integrating digital tools with its warehouse model, Costco has maintained a 90% membership renewal rate, a testament to its ability to retain loyalty even as competitors intensify their omnichannel efforts. This hybrid strategy not only strengthens customer retention but also creates a buffer against price wars in the e-commerce space.

Stock Valuation: A Cautionary Premium

Despite Costco's operational strengths, its stock valuation raises questions about whether the market is overbidding for future growth. As of 2025, Costco's P/E ratio stands at 50.46, significantly higher than its 10-year median of 36.4. Analysts project earnings growth of 9.21% in 2026, with per-share earnings expected to rise from $18.03 to $19.69. However, a discounted cash flow (DCF) model estimates an intrinsic value of $581.15 per share, implying the stock is overvalued by 47% compared to its recent closing price of $854.50.

The valuation gap is further highlighted by industry benchmarks. Costco's P/E ratio of 45.69x exceeds the Consumer Retailing industry average of 22.83x and its peer average of 24.43x. While this premium may reflect confidence in Costco's long-term prospects, it also introduces risk if earnings fail to meet expectations. For instance, Telsey Advisory Group's $1,100 price target-a 24.6% upside-relies on the assumption that Costco can sustain its current growth trajectory.

Analyst Perspectives: Optimism Amid Uncertainty

Analysts remain cautiously optimistic about Costco's prospects. Of the 32 analysts covering the stock, 19 assigned a Buy rating, 13 a Hold, and none a Sell, resulting in a consensus Moderate Buy rating. The average 12-month price target of $1,027.75 suggests an 11.47% potential upside. This optimism is underpinned by Costco's strong financial performance, including an 8.3% year-over-year revenue increase to $67.31 billion in 2025.

However, some experts caution against overpaying for growth. A report by MarketBeat notes that Costco's forward P/E ratio remains "significantly higher than historical averages," raising concerns about valuation sustainability. This tension between growth potential and overvaluation is central to the investment decision: while Costco's fundamentals are robust, its stock price may already reflect a best-case scenario.

Conclusion: A Calculated Bet for 2026

Costco's December 2025 sales and e-commerce growth demonstrate its ability to adapt to evolving consumer preferences and maintain market share. The retailer's hybrid model-combining physical and digital retail-positions it to outperform in a fragmented retail landscape. However, the stock's elevated valuation introduces a layer of complexity.

For long-term investors, Costco represents a calculated opportunity. The company's strong membership base, strategic investments in logistics, and consistent revenue growth provide a solid foundation. Yet, the premium valuation means investors must tolerate higher risk if earnings growth slows or macroeconomic conditions deteriorate. Those willing to accept this risk may find Costco's current valuation justified by its long-term potential, particularly if the company continues to execute its digital and membership strategies effectively.