Costco Wholesale Corp. (NASDAQ:COST)

The valuation ratios exhibit varied trends over the observed period. Generally, ratios increased throughout 2021 and into early 2022, followed by some moderation and then a renewed upward movement in late 2022 and 2023. More recently, there's evidence of stabilization or slight declines in some ratios as of the latest reporting periods.

Price to Earnings (P/E)

The Price to Earnings ratio demonstrates a generally increasing trend from 37.85 in November 2020 to a peak of 57.16 in May 2025. Prior to this peak, the ratio experienced fluctuations, rising from 37.85 to 47.19 by November 2021, then decreasing to 34.43 by November 2022. The ratio then increased significantly to 57.16, before moderating to 51.49 in November 2025. The most recent value, 51.49, suggests a potential stabilization after a period of growth.

Price to Operating Profit (P/OP)

The Price to Operating Profit ratio follows a similar pattern to the P/E ratio, increasing from 28.20 in November 2020 to 44.63 in August 2024. It experienced a dip to 40.52 in November 2024, followed by a slight recovery to 40.24 in September 2024. The ratio has shown a moderate decline to 35.95 in the most recent period, indicating a potential shift in investor sentiment regarding operating profitability.

Price to Sales (P/S)

The Price to Sales ratio exhibits a consistent upward trend, albeit with some volatility. Starting at 0.97 in November 2020, it rose to 1.67 in August 2024. A slight decrease to 1.57 was observed in November 2024, followed by a further decline to 1.39 in May 2025. The most recent value of 1.57 suggests a potential leveling off after a period of sustained growth. This ratio generally shows less dramatic fluctuations compared to the P/E and P/OP ratios.

Price to Book Value (P/BV)

The Price to Book Value ratio demonstrates a clear upward trend, particularly pronounced in 2023 and 2024. Beginning at 11.01 in November 2020, it increased to 17.33 in August 2024. A subsequent decrease to 13.72 was observed in the latest reporting period. This suggests that the market is placing a higher premium on the company's net asset value, although the recent decline indicates a possible reassessment. The ratio experienced its largest increase between November 2022 (9.43) and February 2024 (15.69).

Overall, the observed trends suggest a period of increasing valuation multiples, followed by a potential stabilization or slight correction in the most recent quarters. The P/BV ratio shows the most significant increase over the period, indicating a growing market confidence in the company’s asset base. The recent moderation in some ratios warrants further investigation to determine if this represents a temporary pause or the beginning of a more substantial shift in valuation.

The Price to Earnings (P/E) ratio for the observed period demonstrates a fluctuating pattern, generally trending upwards with notable peaks and valleys. Initial values indicate a ratio around 33-38, followed by a significant increase and subsequent stabilization before another period of fluctuation.

Initial Period (Nov 2020 - Aug 2021)

The P/E ratio began at 37.85 and experienced a decrease to 32.99 before rising to 39.65. This initial period suggests moderate investor valuation, with some volatility. A clear upward trend is observed from February 2021 to August 2021.

Expansion and Stabilization (Nov 2021 - Aug 2022)

A substantial increase in the P/E ratio is evident, peaking at 47.19 in November 2021. Following this peak, the ratio experienced a decline, stabilizing between 38.26 and 42.83 through August 2022. This suggests a period of heightened investor optimism followed by a correction and relative equilibrium.

Fluctuation and Subsequent Increase (Nov 2022 - May 2024)

The P/E ratio continued to fluctuate, decreasing to a low of 34.43 in November 2022, then increasing to 37.86 in May 2023. A further increase is observed, reaching 52.08 in May 2024. This period indicates ongoing investor reassessment and a renewed upward trend.

Recent Period (Sep 2024 - May 2025)

The P/E ratio reached its highest point at 57.16 in February 2025, before decreasing to 50.06 in May 2025. This suggests a potential plateau or correction after a period of strong growth. The ratio remains elevated compared to earlier periods in the observation window.

Long-Term Trend

Over the entire period, the P/E ratio demonstrates an overall upward trajectory, despite interim fluctuations. The ratio nearly doubled from its initial value to its most recent value, indicating increasing investor confidence or potentially overvaluation depending on underlying earnings growth and broader market conditions.

The observed changes in the P/E ratio likely reflect shifts in investor sentiment, earnings expectations, and broader economic factors impacting the company’s valuation. The recent peak and subsequent slight decline warrant continued monitoring to determine if this represents a sustained trend reversal or a temporary correction.

The Price to Operating Profit (P/OP) ratio for the observed period demonstrates a generally increasing trend, punctuated by periods of fluctuation. Initially, the ratio stood at 28.20 in November 2020. Subsequent quarters saw a decrease to 24.38, followed by a rise to 26.67 and 29.60. A significant increase occurred between August 2021 and November 2021, reaching 34.97. The ratio then experienced a moderate decline before resuming an upward trajectory, peaking at 44.63 in September 2024.

Following the peak, the P/OP ratio exhibited volatility, decreasing to 40.52 in November 2024, then increasing to 44.45 in May 2025, before declining again to 35.95 in September 2025. The most recent observations indicate a rise to 40.24 in November 2025, and a further increase to 40.24 in February 2026.

Overall Trend

The P/OP ratio generally increased over the analyzed period, suggesting investors were willing to pay a higher premium for each dollar of operating profit. However, this trend was not linear, with several instances of short-term declines and fluctuations.

Significant Increases

Notable increases in the P/OP ratio occurred between May 2021 and November 2021, and again between February 2022 and September 2024. These periods may correspond to positive investor sentiment, strong earnings reports, or broader market conditions.

Recent Volatility

The period from September 2024 to February 2026 demonstrates increased volatility in the P/OP ratio. This could indicate uncertainty in the market or specific company-related factors influencing investor perception of future earnings potential.

Comparison to Initial Value

The P/OP ratio increased from 28.20 in November 2020 to 40.24 in February 2026. This represents a substantial increase, indicating a significant shift in market valuation of the company’s operating profitability.

The observed fluctuations in the P/OP ratio warrant further investigation to determine the underlying drivers. Analyzing concurrent changes in operating profit, share price, and broader market indices could provide valuable context for understanding these trends.

The Price-to-Sales (P/S) ratio for the observed period demonstrates a generally increasing trend, punctuated by periods of relative stability and minor declines. Initially, the ratio fluctuated around 0.9, beginning at 0.97 and decreasing to a low of 0.82 before recovering to 0.93. A subsequent increase began in May 2021, culminating in a peak of 1.70 in May 2025. Following this peak, the ratio experienced a decline to 1.39, then increased again to 1.57 by the end of the observation period.

Initial Period (Nov 2020 – Aug 2021)

The P/S ratio exhibited volatility, ranging from 0.82 to 1.03. This initial period suggests a relatively stable valuation based on sales, with minor fluctuations potentially influenced by short-term market conditions or investor sentiment.

Ascending Trend (Nov 2021 – May 2025)

A clear upward trend is evident, with the P/S ratio increasing from 1.22 to a high of 1.70. This suggests a growing investor willingness to pay a premium for each dollar of sales, potentially reflecting increased confidence in future revenue growth or improved profitability. The rate of increase accelerated between February 2024 and May 2025.

Recent Fluctuations (May 2025 – Feb 2026)

The ratio decreased from 1.70 to 1.50, followed by a rise to 1.57. This recent fluctuation could indicate increased market sensitivity or a reassessment of the company’s growth prospects. The final value suggests a stabilization, but further observation is needed to confirm this.

Correlation with Share Price and Sales per Share

The P/S ratio’s increase generally aligns with increases in both share price and sales per share. This positive correlation suggests that the rising valuation is supported by fundamental improvements in the company’s performance. However, the recent fluctuations indicate that the relationship is not always perfectly linear.

Overall, the observed trend in the P/S ratio indicates a strengthening valuation relative to sales over the majority of the period. The recent fluctuations warrant continued monitoring to determine whether they represent a temporary correction or a shift in the long-term trend.

The Price to Book Value (P/BV) ratio for the observed period demonstrates a fluctuating pattern, generally trending upwards with notable peaks and subsequent corrections. Initially, the ratio began at 11.01 in November 2020, experienced a decline to 9.16 in February 2021, and then exhibited moderate growth through August 2021, reaching 11.30. A more substantial increase followed, peaking at 13.20 in November 2021 before decreasing to 12.16 in February 2022.

Subsequent quarters saw a continued decline, reaching a low of 9.43 by November 2022. The ratio then showed some recovery, increasing to 9.99 in May 2023 and 11.22 in November 2023. A significant surge occurred between November 2023 and February 2024, with the P/BV ratio climbing to 15.69. This was followed by further increases, peaking at 17.16 in May 2024 and remaining elevated at 17.05 in September 2024 and 17.33 in November 2024.

A noticeable correction occurred in February 2025, with the ratio decreasing to 15.45. This downward trend continued through August 2025, reaching 13.90, before a further decline to 12.64 in February 2026. The most recent observation in February 2026 shows a P/BV ratio of 13.72.

Overall Trend

The P/BV ratio generally increased over the observed period, although with significant volatility. The latter portion of the period, from November 2023 to February 2025, demonstrates a particularly strong upward movement followed by a correction.

Peak Values

The highest P/BV ratios were observed in May 2024 (17.16), November 2024 (17.33) and February 2024 (15.69), indicating periods where the market valued the company’s stock at a substantial premium relative to its book value.

Low Values

The lowest P/BV ratios were observed in February 2021 (9.16) and November 2022 (9.43), suggesting periods where the market valuation was comparatively lower in relation to the company’s net asset value.

Recent Performance

The most recent data indicates a stabilization of the P/BV ratio after the peak in late 2024, with a slight increase observed in the latest period. This suggests a potential leveling off of the premium investors are willing to pay for the company’s stock relative to its book value.