Morgan: Effect of cracking down on member sharing is obvious Costco (COST.US) is entering the "Netflix moment"

Morgan Stanley published a research note saying that Costco (COST.US) may be entering its "Netflix moment" after the rollout of membership card scanners in US clubs. The firm refers to a significant increase in the user base through a few different measures that make it more difficult to share accounts for free. Morgan Stanley analyst Simeon Gutman said his channel checks indicated that membership counts increased double digits during the testing phase of the card scanner rollout at selected Costco stores. Notably, all US clubs are rolling out card scanners. Gutman and his team believe that Costco's membership fee revenue is poised to rise in the coming quarters. Gutman suggested: "Our base case suggests that Costco could add ~400,000 members through conversion of non-paying customers in North America, representing a discrete ~5% 'lift' to its global 76mn user base." Of course, Costco has already anticipated that its annual membership price increases will boost membership fee revenue. The impact on the income statement will be seen over the next 24 months, peaking at 12 months in Q1 2026, as the membership fee increases are rolled out. Morgan Stanley's base case suggests that Costco could add ~400,000 members through conversion of non-paying customers in North America, representing a discrete ~5% "lift" to its global 76mn user base.