Is Costco Wholesale Corp. overvalued or undervalued?

As of 12 June 2025, the valuation grade for Costco Wholesale Corp. has moved from very expensive to expensive, indicating a slight improvement in perceived value but still reflecting high valuation levels. The company is currently considered overvalued. Key ratios include a P/E ratio of 57, an EV to EBITDA of 35.46, and a PEG ratio of 6.21, all of which are significantly higher than industry averages.
In comparison to peers, Walmart, Inc. has a P/E ratio of 35.54 and an EV to EBITDA of 18.47, while Target Corp. shows a more attractive P/E of 10.23 and an EV to EBITDA of 6.33. These figures highlight that Costco's valuation metrics are considerably elevated compared to its peers. Additionally, Costco's stock has outperformed the S&P 500 over the past year, returning 18.41% compared to the index's 10.26%, reinforcing the notion of its current overvaluation.