Costco Stock Big Rally

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Costco Stock Big Rally

Costco Stock: A Big Rally Is Coming?

Costco Wholesale's results from the last few months are very strong. This has reminded investors once again about the strength of Costco's underlying business. This also highlights that consumers continue to find value in shopping at Costco.

Despite the strong results, the Costco stock is not doing well in 2026. The YTD gains of Costco are only 7%. To give you some perspective, the S&P 500 index is up by 13% on a YTD basis.

Does this mean we can expect an upside in the Costco stock price? Let's look at the results and the overall economic situation to answer this question.

Costco Results Are Impressive

The Costco results for Q4 of FY2026 are very solid. Net sales have reached $93.9 billion with an 11% increase during the period.

The comparable growth rate was 10.7% for the US stores. Meanwhile, the overall comparable growth rate for the company was 9.4%. That's a solid number given the high energy prices and inflation.

The overall growth rate of Costco is very impressive when we consider the state of the economy. Also, consumers are cutting back on any type of discretionary spending due to inflation. So, achieving such a growth rate is nothing short of impressive.

This also highlights that consumers are now buying in bulk in order to get lower prices. This is a good trend for stores like Costco, which already operate on this model.

As of now, the market cap of Costco is $400 billion, and the stock is not expensive in terms of its P/E ratio. However, the growth is very solid. Still, it is not enough to justify paying such a high price for the stock.

If you are a long-term investor, you can consider buying Costco stock. However, you shouldn't expect any major rally in Costco's stock price anytime soon. The growth is still solid, but it is not enough to warrant buying Costco shares at current prices.

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