Costco Wholesale Corp. (NASDAQ:COST)

Price to Earnings (P/E) Ratio

The Price to Earnings ratio demonstrated a relatively stable trend from 2020 to 2023, fluctuating slightly within the range of approximately 36.4 to 40.0. However, a notable increase is observed in 2024, where the ratio rose sharply to 54.68, followed by a slight decrease to 50.06 in 2025. This rise suggests a marked increase in investors' willingness to pay for each unit of earnings, possibly indicating heightened growth expectations or market optimism during the later periods.

Price to Operating Profit (P/OP) Ratio

This ratio followed a pattern similar to the P/E ratio, showing moderate stability between 2020 and 2022, fluctuating around 27 to 30. A significant uptick occurred in 2024, with values rising to 43.38, followed by a decline to 39.05 in 2025. This movement indicates a growing premium placed on the company's operating profit in 2024, reflecting either improved profitability prospects or increased investor confidence in operational efficiency.

Price to Sales (P/S) Ratio

The Price to Sales ratio remained fairly constant from 2020 to 2023, oscillating near the 1.0 mark. In 2024, a pronounced increase to 1.61 is evident, followed by a slight reduction to 1.5 in 2025. This pattern aligns with the trends observed in the P/E and P/OP ratios, pointing toward elevated valuation multiples relative to sales in the more recent periods.

Price to Book Value (P/BV) Ratio

The Price to Book Value ratio experienced more pronounced fluctuations over the examined timeline. It increased steadily from 8.76 in 2020 to a peak of 11.3 in 2021, then declined to 9.99 in 2023. A substantial surge to 17.05 was registered in 2024, succeeded by a decrease to 13.9 in 2025. The elevated P/BV ratio in 2024 suggests an enhanced valuation premium on the company's net assets, which may reflect market sentiment regarding asset quality or anticipated growth in equity value.

Overall Observations

Across all the valuation multiples analyzed, a consistent pattern emerges of relative stability from 2020 through 2023, followed by marked increases in 2024. These spikes in key valuation ratios suggest a period of significant investor enthusiasm or recalibration of growth expectations in 2024. The slight declines in 2025, while still maintaining elevated levels compared to the earlier years, could imply a modest cooling of these heightened valuations or a realignment with underlying financial performance.

The financial data reveals notable growth trends over the analyzed periods. The share price has demonstrated a consistent upward trajectory, increasing significantly from $363.02 in 2020 to $914.8 in 2025. This represents a strong appreciation in market value over the five-year span.

Similarly, earnings per share (EPS) have shown steady improvement, rising from $9.07 in 2020 to $18.27 in 2025. This upward movement in EPS indicates enhanced profitability and operational performance over time.

The price-to-earnings (P/E) ratio has exhibited some fluctuations. Initially, it decreased slightly from 40.02 in 2020 to 36.38 in 2022, suggesting that the share price grew in line with or slightly slower than earnings during this period. However, from 2022 onward, the P/E ratio increased significantly, peaking at 54.68 in 2024 before slightly declining to 50.06 in 2025. This rise in P/E ratio implies that the market began valuing the company's earnings more highly relative to previous years, potentially reflecting heightened expectations of future growth or overall market optimism.

Share Price

Steady increase from $363.02 to $914.8, indicating strong market confidence and capital appreciation.

Earnings per Share (EPS)

Continuous growth from $9.07 to $18.27, reflecting improving profitability and operational effectiveness.

Price-to-Earnings (P/E) Ratio

Initial decline from 40.02 to 36.38 followed by a significant rise to 54.68, then a slight decrease to 50.06, suggesting evolving investor sentiment with increasing valuation multiples during the later years.

Share Price

The share price exhibits a consistent upward trajectory over the analyzed periods. Starting from $363.02, it increases steadily each year, reaching $914.8 by the last reported period. This represents a significant appreciation, more than doubling over the span, indicating strong market confidence and potentially positive underlying business fundamentals.

Operating Profit per Share

Operating profit per share shows a continuous improvement through the years, starting at $12.32 and rising to $23.43 in the most recent period. This steady growth suggests enhanced operational efficiency or revenue expansion, contributing to improved profitability on a per-share basis.

Price to Operating Profit Ratio (P/OP)

The P/OP ratio fluctuates moderately but generally trends upward in the later years. Initially, the ratio hovers around 29 to 30, with a slight dip to about 27.28 in the third period. Subsequently, it rises significantly to a high of 43.38 before declining to 39.05 in the final period. This pattern indicates changing market valuations relative to operating profit, with investors willing to pay increasingly higher multiples for the operating profit in recent years, despite growing operating profit per share. The peak ratio may reflect heightened market optimism or expectations of future growth, followed by a slight market correction or normalization.

Overall Insights

The analyzed data reveals a company experiencing robust growth in both share price and operating profitability. The increasing share price aligns with rising operational earnings, suggesting that market valuation is supported by financial performance. However, the upward movement in the P/OP ratio toward the latter periods could also imply that market valuations are increasingly influenced by future growth expectations beyond current earnings. The slight reduction in this ratio in the final period might indicate a recalibration of investor expectations or a response to broader market conditions.

Share Price

The share price has exhibited a consistent upward trend over the analyzed periods, increasing from $363.02 in 2020 to $914.80 in 2025. This represents a substantial growth, with particularly notable increases between 2022 and 2024, where the share price jumped from $480.32 to $909.10, indicating heightened investor confidence or improved market conditions during these years.

Sales Per Share

Sales per share have also steadily increased throughout the periods, rising from $369.92 in 2020 to $609.04 in 2025. This growth reflects improved revenue generation relative to the number of outstanding shares, with a consistent upward trajectory suggesting effective sales performance and potential expansion over time.

Price-to-Sales (P/S) Ratio

The price-to-sales ratio presents a more variable pattern. It started at 0.98 in 2020, experienced minor fluctuations around the unity mark through 2022, and then increased more sharply to peak at 1.61 in 2024 before slightly declining to 1.50 in 2025. This indicates that, particularly in the last two years, the market has been valuing the company more aggressively relative to its sales, possibly reflecting expectations of enhanced profitability or growth prospects beyond current sales figures.

Overall Insights

The overall data indicates steady growth in fundamental business performance as seen through increasing sales per share. Market valuation, as reflected in the share price and P/S ratio, has outpaced sales growth, especially in the latter years, suggesting growing investor optimism or premium valuation. The moderation of the P/S ratio in 2025 after its peak may imply a slight market reassessment or stabilization of investor expectations.

Share Price

The share price exhibited a consistent upward trend throughout the observed periods, increasing substantially from $363.02 in 2020 to a peak of $914.8 in 2025. The most notable acceleration occurred between 2023 and 2024, where the price jumped from $565.52 to $909.1, indicating strong market confidence or positive company developments during that interval.

Book Value per Share (BVPS)

The book value per share demonstrated generally positive growth, starting at $41.44 in 2020. Although there was a slight dip in 2021 to $39.75, it recovered and grew steadily thereafter, reaching $65.81 by 2025. This trend suggests an improving asset base or retained earnings growth relative to outstanding shares over the period.

Price-to-Book Value (P/BV) Ratio

The P/BV ratio initially increased from 8.76 in 2020 to 11.3 in 2021, followed by a gradual decline to 9.99 in 2023. Subsequently, it surged sharply to 17.05 in 2024 before moderating to 13.9 in 2025. This volatile pattern indicates fluctuations in market valuation relative to the company's book value, with the peak in 2024 potentially reflecting heightened investor optimism or overvaluation relative to net assets.

Overall Insights

The data reveals strong market appreciation in the company's share price, outpacing the growth in book value per share, which explains the elevated P/BV ratios in later years. The fluctuations in the P/BV ratio suggest varying market sentiment, possibly influenced by factors beyond underlying asset values, such as earnings expectations, industry trends, or macroeconomic conditions. While the book value per share growth signals a solid underlying financial position, the increase in market valuation warrants consideration of risk related to market expectations.