COST is now overvalued and could go down -34%

Based on our analysis, Costco Wholesale has received an overvalued rating of 1 out of 5 stars. This conclusion is primarily driven by several financial ratios that indicate potential overpricing compared to industry standards. The Price-to-Earnings (PE) ratio for Costco is 60.56, significantly higher than the sector average of 19.23. A high PE ratio suggests that investors are paying more for each dollar of earnings, which may indicate overvaluation if growth expectations are not met. Furthermore, the Price-to-Book (PB) ratio stands at 16.75, again far above the sector average of 2.04. This metric, which compares a company's market value to its book value, implies that Costco's stock may be overpriced relative to its net assets. Additionally, Costco's dividend yield is only 0.33, considerably lower than the sector average of 2.64. A lower yield can signify that the stock is priced higher than its dividend payouts, which may not attract income-focused investors. While Costco demonstrates strong profitability metrics, such as a net profit margin of 2.90 and a return on assets ratio of 10.55, these figures are not the primary drivers of its current valuation concerns. The stark contrasts in PE, PB, and dividend yield indicate that Costco may not be a sound investment at its current price levels, especially when weighed against industry benchmarks. This is not a comprehensive overview of our valuation, and should not be viewed as financial advice. Always do your own research before considering an investment.