Costco Wholesale Corp. (NASDAQ:COST)

Price to Earnings (P/E) Ratio

The P/E ratio exhibits a general upward trend over the periods analyzed. Initially around the mid-30s, it fluctuated moderately before rising more consistently from approximately 34 in early 2022 to reach a peak above 57 by mid-2025. This increase suggests growing market expectations for earnings growth or higher valuation multiples despite potential earnings growth rates.

Price to Operating Profit (P/OP) Ratio

The P/OP ratio shows a similar upward trajectory to the P/E ratio, moving from the mid-20s range into the 40s by the later periods. Notably, there was a steady increase starting around 2021, reaching highs above 44 by mid-2025. This indicates that the stock price has been rising faster relative to operating profits, implying increased investor optimism or premium valuation placed on operating earnings.

Price to Sales (P/S) Ratio

The P/S ratio reveals a progressive growth pattern, beginning below 1.0 and climbing steadily to around 1.7 by mid-2025. This consistent increase reflects higher valuation relative to sales, possibly driven by stronger sales growth, improved sales quality, or greater investor confidence in future sales prospects.

Price to Book Value (P/BV) Ratio

The P/BV ratio experienced notable volatility but overall demonstrated a clear upward trend. Starting around 6.6, it moved above 10 in the 2021 period, eventually peaking near 17 in 2024-2025. This rise signifies a substantial increase in the market valuation relative to the company's book value, suggesting elevated investor confidence in asset utilization or future profitability beyond the book value metrics.

General Observations

Across all four valuation ratios—P/E, P/OP, P/S, and P/BV—there is a discernible trend of increasing valuation multiples over the analyzed quarters. This pattern indicates that the market has progressively assigned higher value to the company relative to its earnings, operating profits, sales, and book value. The trend may reflect expectations of improved financial performance, strategic growth initiatives, or shifts in market sentiment favoring this company. However, the upward movement in multiples also suggests the stock may be increasingly priced for future growth, which carries implied risk if performance does not meet investor expectations.

The share price of the company demonstrates a general upward trend over the analyzed periods, starting at $197.13 in November 2018 and reaching a peak of $1010.81 by May 2025. Despite this overall increase, some fluctuations are observed, such as a slight decline from $549.67 in November 2021 to $456.53 in November 2022, followed by renewed growth leading up to the highest values in 2024 and early 2025. The most notable surge occurs after February 2023, where the share price accelerates sharply from $479.52 to surpass $1000 within two years.

Earnings per share (EPS) data begins in September 2019 at $8.32 and displays a steady increment throughout the timeline. EPS rises progressively each quarter, reaching $17.69 by May 2025, indicating consistent growth in profitability on a per-share basis. The growth in EPS appears stable without sudden spikes or dips, suggesting sustainable earnings expansion over the period.

The price-to-earnings (P/E) ratio exhibits more volatility compared to share price and EPS. Initially, it is 35.76 in September 2019 and fluctuates moderately around this range for several periods. However, starting late 2021, the P/E ratio trends upward from approximately 39.65 to reach 57.16 by May 2025. This increasing P/E ratio alongside rising share prices and EPS suggests that investors are willing to pay increasingly higher multiples of earnings, possibly reflecting elevated market expectations or increased investor confidence in future growth prospects.

In summary, the share price and EPS consistently trend upward, indicating strong financial performance and growth in earnings power. The rising P/E ratio further implies growing market optimism, as valuation multiples expand over time. Some intermittent share price corrections occur, but the overall trajectory remains positive, culminating in a substantial increase in market valuation and earnings capacity over the examined timeframe.

Share Price Trend

The share price demonstrates a general upward trend over the observed periods. Starting at 197.13 USD in late 2018, it experiences gradual increases with some fluctuations, achieving strong gains especially from mid-2020 onward. Notably, there is a significant rise from approximately 480 USD in late 2022 to over 1,000 USD by mid-2025, indicating marked investor confidence or positive market valuation in this later period.

Operating Profit per Share

Operating profit per share begins being reported from late 2019, with an initial value of 10.77 USD. It shows a consistent upward trajectory throughout the entire timeline, increasing steadily each quarter. By mid-2025, operating profit per share nearly doubles, reaching approximately 22.74 USD, reflecting sustained profitability growth at the operational level.

Price to Operating Profit Ratio (P/OP)

The P/OP ratio exhibits notable variability over the periods. Initially, it hovers mostly in the mid-to-high twenties, indicating moderate valuation multiples relative to operating profit. Around 2021 and 2022, the ratio climbs into the high twenties and thirties, peaking near the mid-thirties to low forties in early to mid-2024. This increase suggests that share prices are growing faster than operating profits during this phase or market valuations are becoming more optimistic. Towards mid-2025, the ratio slightly decreases but remains elevated above 40, indicating sustained high valuation multiples.

Overall Insights

The combination of steadily increasing operating profit per share and a rising share price denotes positive financial performance and market perception. The rising P/OP ratio in the final years points to a market that is willing to pay a premium for each unit of operating profit, which could reflect expectations of future growth or other qualitative factors. However, the higher ratio also implies increased valuation risk if operating profit growth does not maintain pace with share price appreciation. The strong share price growth post-2022 especially signals heightened investor enthusiasm or favorable external factors impacting valuation.

The share price demonstrates a general upward trend over the period, rising from $197.13 in late November 2018 to a peak of $1010.81 projected in May 2025. This increase, however, is marked by periods of volatility. Notable declines occur around early 2021 and mid-2022, where the share price dips from highs near $549.67 to approximately $456.53, followed by subsequent recovery phases leading into 2023 and beyond. The share price rebounds strongly post-2022, indicating renewed investor confidence or favorable market conditions influencing valuation.

Sales per share data starts appearing in the third quarter of 2019 with a value of $339.7 and shows a consistent upward trajectory through the forecasted periods. There is a steady increase quarter over quarter, culminating in an estimated $594.54 by May 2025. This steady rise suggests growing revenue generation efficiency or expansion of the sales base on a per-share basis, implying improved operational performance or market penetration over time.

The Price-to-Sales (P/S) ratio presents a more fluctuating pattern. Initially, the ratio starts below 1 (0.88 in late 2019) and varies between approximately 0.8 and 1.22 until early 2022. Following this period, a noticeable upward trend emerges, peaking at 1.7 by May 2025. This indicates that investors are willing to pay an increasing premium relative to sales, perhaps reflecting expectations of enhanced profitability, growth prospects, or shifts in market sentiment. The P/S ratio's rise alongside steady sales per share growth and increasing share price suggests improving valuation metrics and potentially heightened investor confidence in future earnings potential.

Summary of trends and implications

The share price's strong growth combined with consistent increases in sales per share point to overall positive financial performance and growth in business scale or efficiency. Periodic share price volatility may represent market corrections or reactions to external conditions. The rising P/S ratio in recent years indicates growing investor optimism and willingness to value the company at higher multiples relative to sales, suggesting expectations of improved profitability or expansion of market opportunities. Together, these trends paint a picture of sustained growth with increasing market valuation over time.

The share price of the company exhibits a generally upward trajectory over the given periods, with notable fluctuations. Starting at $197.13 in November 2018, the share price climbs steadily, reaching a peak of $909.10 by November 2024. This represents a significant increase, indicating strong market valuation growth. However, within this overall trend, there are periods of variability such as a decline between November 2021 and August 2022, followed by renewed growth through to early 2025.

Book value per share (BVPS) presents a consistent, gradual increase from $29.89 at the end of 2018 to $61.16 by May 2025. This steady rise reflects persistent growth in the company’s net asset value on a per-share basis, suggesting ongoing accumulation of equity or retained earnings. The progression appears linear and stable, without abrupt shifts.

The price-to-book value ratio (P/BV) shows more volatility relative to the other metrics. Initially, the ratio fluctuates between approximately 6.6 and 8.8 through early 2020, then spikes notably to values exceeding 11 in late 2020 and sustains relatively high levels above 10 for most of the subsequent periods. The ratio peaks sharply at 17.33 in November 2024 and remains elevated around 15.45 to 16.53 in the latest reported quarters. This suggests growing investor premium over book value, possibly reflecting market expectations of future earnings growth, intangible value not captured on the balance sheet, or other qualitative factors influencing valuation.

In summary, the data reveals a company experiencing robust market valuation growth, as indicated by the rising share price and elevated price-to-book ratios over time. Meanwhile, the stable rise in book value per share signals consistent internal value creation. The increasing divergence between market price and book value suggests heightened investor confidence and possibly an enhanced perception of future growth potential or other competitive advantages during the period analyzed.