Runs membership warehouse clubs, earning much of its profit from membership fees rather than from the goods on the shelves.
Costco (COST) scores 7.8 out of 10 as of , computed from its reported financial statements. That reads as high quality. The reading rests on solvency, and profitability is what holds it back.
Data provided by Twelve Data. Scores are computed by Lemma Analysis from reported financials.
Costco’s returns on capital beat their cost in almost every measured year, by a clear margin: 4 of 5 indicators passed.
Quantitative signs of a moat, read from the filed statements. This is not a judgement of where it comes from (brand, network effects, switching costs). How Lemma measures a moat →
Margins here are deliberately thin, so any profitability pillar read on margin alone understates the business, because the return comes from turning inventory quickly and from fees that cost almost nothing to serve. Efficiency and predictability are the pillars that actually describe it. A useful case for seeing how much a sector-relative baseline changes the answer.
As of October 17, 2026, Costco scores 7.8 out of 10 on the Lemma Quality Score, a reading of high quality. Businesses in this band tend to combine good returns with a sound balance sheet, even if one pillar lags the others. Nothing in it comes from the share price or from forecasts: it is Costco’s own reported numbers, scored pillar by pillar.
Ranked with the 71 Consumer Staples companies Lemma publishes, the score sits at the 99th percentile, among the top tenth of the group. The median across the group is 5.8, and the top quarter begins at 6.8, so Costco is well above the typical company here.
Costco’s profitability score is 6.5 out of 10 (average). Against a median of 4.7 among 71 Consumer Staples companies, that is well above the group and the 69th percentile. Profitability in the middle of the range is neither a moat nor a warning: margins and returns look like those of an ordinary business in this line of work.
On solvency, Costco scores 9.3, a strong reading. Its peers have a median of 6.9 across 65 Consumer Staples companies, which places it well above them, at the 91st percentile. A high solvency score means leverage is modest relative to earnings and cash flow, which gives management room to act in a bad year.
On growth, Costco scores 6.6, an average reading. Its peers have a median of 4.0 across 67 Consumer Staples companies, which places it well above them, at the 76th percentile. Average growth reflects a business expanding at roughly the pace of its sector, without a clear acceleration or decline.
On efficiency, Costco scores 7.5, a strong reading. Its peers have a median of 6.7 across 68 Consumer Staples companies, which places it above them, at the 72nd percentile. A strong efficiency reading usually shows up as healthy cash conversion: reported profit arriving as real cash rather than staying on the balance sheet.
Predictability scores 9.2 out of 10, which reads as strong. The median across 71 Consumer Staples companies is 6.1, so Costco is well above its peers on this pillar and ranks at the 99th percentile. A strong predictability score rewards consistency: revenue and earnings that rarely surprise in either direction.
Solvency at 9.3 is Costco’s best pillar and profitability at 6.5 its weakest. The 2.8 point gap between them is worth keeping in mind when reading the overall. Leading with solvency is a defensive strength: it protects the business more than it grows it. Weak profitability can be cyclical, so it helps to know whether margins are at a low point or a long-run level.
Costco has no pillar below the median of Consumer Staples companies, which leaves little room to rise. Its exposure is to slippage instead, and profitability carries the most weight: one point less there would mean an overall of roughly 7.5 rather than 7.8. The weights add up to 100 points (profitability 25, solvency 20, growth 20, efficiency 15, predictability 20), and Costco has a reading on every pillar.
For a fair comparison, start with companies of a similar size: the Consumer Staples companies below are nearest to Costco by market value, each scored on the same pillars.
How much profit the company generates from its capital and sales.
The company’s ability to service debt and meet its obligations.
How fast revenue, earnings and cash flow are compounding.
How well assets and earnings convert into cash and output.
How stable and consistent results have been over time.
Each metric is scored from 0 to 10 against sector-aware benchmarks, where higher is better. Metrics roll up into five pillars, and the pillars combine into the overall score using the weights shown. Sector-sensitive metrics are judged relative to peers in the same sector.
This score is a systematic, backward-looking read of reported fundamentals. It does not judge valuation, management quality, competitive moat, or future prospects, and can be distorted by one-off items or unusual accounting. Treat it as a starting point, not a recommendation.
Educational only. Not investment advice.
On this reading Costco scores 7.8 out of 10, which reads as high quality. Its strongest pillar is solvency, its weakest is profitability. Quality is not the same as a good investment: the score says nothing about the price you would pay.
Costco ranks at the 99th percentile of the 71 Consumer Staples companies Lemma publishes a score for. The median there is 5.8 and the top quarter starts at 6.8, against Costco’s 7.8.
Five pillars, each scored from 0 to 10 against sector-aware benchmarks and then weighted into one overall reading: profitability, solvency, growth, efficiency and predictability. Everything comes from reported financials, and nothing comes from price, sentiment or forecasts.
This page last changed on October 17, 2026. The score moves with the financial statements, so the page changes when a new filing moves the reading rather than on a schedule. Live figures for COST are in the app.
No. Quality and valuation are separate questions, and a good business at the wrong price is still a bad purchase. Score the business here, then price it with a DCF you control.
Inside Lemma Analysis the same five pillars run on every company we cover, with the metrics behind each one, current fundamentals, a DCF you control and a watchlist that tells you when the price catches up.
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