Costco’s stock is not cheap, yet its premium valuation is justified as a core investment holding, with a year-to-date performance up 38.8%. Its forward price-to-earnings multiple stands at 49, compared to a five-year average of 37.9. In 2024, Costco outperformed the S&P 500, surging nearly 39%, attributed to its strong value delivery, market share growth, and thriving private label, Kirkland Signature. For 2025, Costco is focusing on expanding alternative revenue streams, particularly from retail media and e-commerce, while also executing store expansions. However, it faces risks with membership renewal rates that could affect margins and growth plans.
