What does Costco Wholesale do?

Costco runs large membership-only warehouse stores where shoppers buy groceries, household goods, electronics, and more, often in bulk. Its warehouses also offer services like gas stations, pharmacies, optical centers, hearing-aid centers, tire installation, and food courts. It operates in the U.S., Canada, Mexico, Japan, the U.K., Korea, Australia, Taiwan, China, Spain, France, Iceland, New Zealand, Sweden, and Puerto Rico, and also sells online.

What is Costco Wholesale's fair value?

On an owner-earnings DCF, Costco Wholesale's most-likely fair value is about $640, versus a recent price near $947. A margin-of-safety estimate, not a price target. Analysis, not advice.

Consumer Defensive · Discount Stores · COST

What Costco Wholesale Does & How It Makes Money (COST)

Updated October 2026 · reflects Costco Wholesale's latest reported financials

Membership warehouse club selling groceries and general merchandise in bulk. Costco earns money by selling a wide range of merchandise and services through its membership warehouses and e-commerce channels, and shoppers must hold a membership to buy there.

Costco Wholesale's story, moat and numbers — in a 3-minute visual book.

Read the illustrated, narrated story →

How Costco Wholesale makes money

Costco earns money by selling a wide range of merchandise and services through its membership warehouses and e-commerce channels, and shoppers must hold a membership to buy there. Ancillary businesses such as gasoline, pharmacy, optical, and travel add further revenue.

What Costco Wholesale does

Costco Wholesale Corporation, founded in 1976 and based in Issaquah, Washington, runs membership warehouses. Shoppers pay to join, then buy from a broad range: dry groceries, fresh meat and produce, bakery and deli items, liquor, appliances, electronics, apparel, furniture, jewelry, tires, and seasonal goods. The company operated as Costco Companies, Inc. until it renamed itself in August 1999. Many warehouses also include services that bring members back often, including gas stations, pharmacies, optical and hearing-aid centers, tire installation, and food courts. Costco also runs e-commerce, business centers, and travel services. It has warehouses in 14 countries plus Puerto Rico, stretching from North America to Asia, Europe, and Oceania.

Products & services

Membership warehouses
Fresh food (meat, produce, bakery, deli)
Gasoline stations
Pharmacy and optical centers
Tire installation centers
E-commerce and travel services

What is Costco Wholesale worth?

On an owner-earnings DCF, Costco Wholesale's most-likely value is about $640 versus a recent price near $947 (32% above fair value). But TacticScale only calls a stock undervalued when the price sits below its conservative no-growth floor (~$237) with a margin of safety — so the honest verdict here is “Fairly priced — no edge.” Fair value earns its keep only at the extremes, not in the wide middle.

Verdict: Fairly priced — no edge

Owner-earnings fair value · recent price ≈ $947

Fair value (most likely)

$640

Range

$440–$1,015

No-growth floor

$237

Price

~$947

Price sits in the normal range — fair value isn't actionable here; it earns its keep only when price drops below the no-growth floor, or runs to roughly double the optimistic case.

Analysis, not advice. Fair value is a margin-of-safety estimate from a deterministic owner-earnings DCF, not a price target or recommendation. See the full breakdown →

Sector Consumer Defensive Industry Discount Stores HQ United States Ticker COST Moat Wide moat (88/100) Official site

Related companies

BJ's Wholesale Club (BJ) · Walmart (WMT) · PriceSmart (PSMT) · Albertsons Companies (ACI) · The Kroger (KR)

Understand Costco Wholesale in 3 minutes →