Stock of the week · from 26 October 2026

Costco Wholesale Corp (COST)

$996.54
−0.86% last session

Each week we pick one well-known company and lay out the facts: what it does, how good the business is, whether it looks cheap, and the best arguments on both sides. It's picked in rotation, not because we think you should buy it.

The quick take

$445.4bn company
Business qualityPasses 7 of 7 long-term quality checks; revenue up 9.8% a year over 10 years
ValuationMore expensive than usual on 4 of 4 measures against its own 10-year history
Financial strengthPiotroski score 6/9 (average); Altman Z 9.3 (safe)
Cash back to owners0.7% a year in dividends and buybacks; dividend raised 1 years in a row

Price

+7.2% over 1Y
27 Oct 2026$996.61
$800.00$900.00$1,000.00$1,100.00JanMarJunAug

Daily closing prices. Source: Twelve Data.

Financial health scores

tap a score for the working
6Piotroski F-scoreAverage: passed 6 of 9 strength tests
✓ ProfitableReturn on assets 10.4%
✓ Cash coming in from operationsOperating cash flow positive
✗ Profitability improvingReturn on assets 10.5% → 10.4%
✓ Profits backed by cashOperating cash flow above net income means profits aren't just accounting entries
✓ Less reliant on long-term debtLong-term debt ÷ assets 7.4% → 4.4%
✓ Short-term finances strongerCurrent ratio 1.03 → 1.06
✓ No new shares issuedShare count -0.1%
✗ Gross margin improvingGross margin 12.8% → 12.8%
✗ Using assets more efficientlySales ÷ assets 3.57 → 3.40

7–9 is strong, 4–6 average, 0–3 weak. In the original study, cheap stocks with high scores beat cheap stocks with low scores by a wide margin.

9.3Altman Z-scoreSafe: low risk of financial distress
Working capital ÷ assets (short-term cushion)0.03 × 1.2 = 0.04
Retained earnings ÷ assets (profits built up over its life)0.32 × 1.4 = 0.45
Operating profit ÷ assets (how productive the assets are)0.13 × 3.3 = 0.43
Market value ÷ liabilities (how far the value could fall before debts exceed it)8.37 × 0.6 = 5.02
Sales ÷ assets (how hard the assets work)3.40 × 1 = 3.40
Z-score9.34

Above 2.99 safe · 1.81–2.99 grey zone · below 1.81 distress zone.

-2.66Beneish M-scoreBelow −1.78: no statistical red flags in the accounts
Receivables vs sales1.12
Gross margin falling1.00
Asset quality0.87
Sales growth1.10
Slower depreciation1.01
Overheads vs sales0.99
Leverage rising0.97
Accruals (profit not backed by cash)-7.4%

⚠ marks ratios in the range typical of manipulators in the original study. Ratios near 1 mean little changed from last year. A flag can also come from a big acquisition or a genuine business change. It's a reason to read the notes, not an accusation.

Previous weeks

CL Colgate-Palmolive · 19 OctAXP American Express · 12 OctORCL Oracle · 5 OctPEP PepsiCo · 28 SeptCAT Caterpillar · 21 SeptLMT Lockheed Martin · 14 Sept

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