Costco Is Down 10% in 6 Months While the S&P 500 Is Up 17%. Is Costco Too Cheap to Pass Up Under $900 a Share?

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Costco’s Recent Slump: Watch but Don’t Chase

Costco’s stock lagging the S&P 500 raises questions about valuation despite strong membership and profits.

Costco’s 10% drop over six months while the S&P 500 runs 17% higher catches the eye. The company boasts solid fundamentals — rising revenue, profits, and a remarkable 92.3% membership renewal rate show real customer loyalty. However, Costco trades at a premium versus peers, reflecting those strengths. The tariff pressures and higher fuel costs also chip away at margins, risks often missed in the headline numbers. For South African investors, there’s little direct appeal since there’s no JSE-listed equivalent with such a membership model. Instead, watching USD/ZAR makes more sense here, as a stronger rand would lessen the pain from imported inflation on local retailers like Woolworths or Shoprite. This suggests local counters, especially those with imported goods exposure, could remain under margin pressure. Costco is fine for steady long-term holders but not the place to seek quick upside. If the US consumer slows or tariffs escalate, the premium Costco trade could unravel quickly. this is just our opinion and not financial advice