What’s Next for Costco Stock in the Next Five Years?

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Well, well, well. It’s happened again. Costco’s (COST) stock has soared a glorious 174% over the past five years, while the S&P 500 limped along with an 86% rise. Honestly, it’s like Costco is the overachiever in the school of business, handing in its homework early and getting extra credit for good measure. Meanwhile, the rest of us mere mortals are stuck scrambling for decent returns.

But as thrilling as the past five years have been, the million-dollar question (or perhaps the 52-billion-dollar question, if we’re being precise) is: Can Costco keep it up? Will it keep outshining the market in the next five years? Let’s dig into the business model, the growth numbers, and, of course, the valuation – because, you know, I can’t resist a good chart.

Why Costco’s Business Model is Resilient (Or Maybe Just Unstoppable?)

Costco’s business model is like that friend who always has it together. It just works. First, tCOST”>

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So, How Fast is Costco Growing?

Growth-wise, Costco has been the tortoise and the hare, all rolled into one – steady, reliable, and not afraid to make bold moves. Between fiscal 2020 and 2024, the company has been ticking all the boxes: strong comparable sales growth, more warehouses, more cardholders, and renewal rates that give Netflix a run for its money. As of fiscal 2025, Costco’s growth remains steady, showing an impressive 8.1% increase in comparable sales year-over-year. Not too shabby.

Metric FY 2020 FY 2021 FY 2022 FY 2023 FY 2024
Adjusted* Comps Growth 9.2% 13.4% 10.6% 5.2% 5.9%
Total Warehouses 795 815 838 861 890
Total Cardholders 105.5M 116.1M 118.9M 127.9M 136.8M
Global Renewal Rate 88% 89% 90% 90.4% 90.5%

So, yeah, Costco is in no danger of slowing down anytime soon. They even raised their membership fees in 2023 (a gutsy move, if you ask me) and still managed to keep the growth train running smoothly. If anything, this shows Costco’s pricing power is still strong, and it could raise fees again, at least until I have to admit I can’t afford the $60 annual membership anymore.

Gross margins have dipped slightly, mostly due to inflationary pressures and the expansion of lower-margin e-commerce. But honestly, I’m not too worried about it. Costco’s ability to raise membership fees, while maintaining a large-scale operation, means its earnings per share (EPS) have been growing at a comfortable 16% CAGR. Not bad, not bad at all.

What’s in Store for Costco in the Next Five Years?

Looking ahead, analysts predict that Costco’s net sales and EPS will continue to rise at a steady clip – expect a CAGR of around 8% and 10%, respectively. How will this happen? Well, Costco has big plans to open 25-30 new warehouses each year, continue expanding its e-commerce capabilities, and leverage its sticky membership perks. With those factors in place, Costco’s financial trajectory seems as solid as my resolve to *finally* get my portfolio into a healthy balance. (Note: this is still in progress.)

However, I can’t help but notice Costco’s stock isn’t exactly a bargain right now. At 52 times this year’s earnings, it’s definitely on the pricier side. Just a few months ago, this number was comfortably in the low 30s. So, in a way, we’ve probably already priced in some of that future growth. Don’t you just love the stock market?

But hey, let’s keep dreaming, shall we? If Costco hits its growth targets and achieves an EPS CAGR of 10% from fiscal 2024 to 2027, then the stock could rise to around $1,140 by 2030 – a nice 20% gain. Nothing to sneeze at, though probably not quite as spectacular as the past five years. But, as I say to myself (perhaps a little too often), “Long-term investing is about the steady gains, not the fireworks.” Well, we’ll see.

Until next time, happy investing! 📈

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2025-08-31 02:15