MeritValue

COSTCO WHOLESALE CORP /NEW

COSTdata completeness 100%18 fiscal years on file
The thesis, from the filings

COSTCO WHOLESALE CORP /NEW earns about 35% on invested capital, far above its ~9% cost of capital, with a roughly flat share count — a real edge showing up in the numbers. The estimate methods put fair value between $146.59 and $382.41 a share.Whether it’s worth owning at today’s price is the last question — and yours to answer, below.

i. The business — what you’d actually own
FigureFY 2021FY 2022FY 2023FY 2024FY 2025
Revenue$195.9B1$227B2$242.3B3$254.5B3$275.2B3
Net income$5.01B4$5.84B5$6.29B6$7.37B6$8.1B6
Operating cash flow$8.96B7$7.39B8$11.1B9$11.3B9$13.3B9
Capital expenditure$3.59B10$3.89B11$4.32B12$4.71B12$5.5B12
Free cash flow (derived)$5.37B7$3.5B8$6.75B9$6.63B9$7.84B9
Total debt$15B13$6.56B14$6.46B15$5.9B16$5.79B16
Cash & equivalents$11.3B17$10.2B18$13.7B19$9.91B20$14.2B20
Diluted shares444.3M444.8M444.5M444.8M444.8M

Superscripts are receipts. Each links to the SEC filing the number came from (full list at the bottom).

ii. Your slice — ownership made literal
If you owned
shares
Net assets behind them
$655.66
your share of equity
Profit it earned you last year
$182.08
Free cash flow it threw off
$176.19
Debt you’d be carrying
$130.13

10 shares is a claim on $655.66 of net worth that earned you $182.08 and generated $176.19 of cash last year, against $130.13 of debt.

iii. Is this a good business?
Moat signal · return on invested capital
35% avg · 5y
FY21 24%FY22 36%FY23 36%FY24 38%FY25 40%

It earned about 35% on invested capital, year after year, against a ~9% cost of capital — the footprint of real pricing power. Competition usually drags returns like this back down; here it hasn't.

seeing a moat in the numbers →
Management signal · capital allocation
+0% shares · 5y

Share count is roughly flat over 5 years — little dilution, little buyback. Total debt has fallen 61% — deleveraging.

reading capital allocation →

Signals, not verdicts — read from the filings above. Numbers don’t prove a moat; they show its footprint. You decide.

iv. What it’s worth — engine v0.1.0

The 3 estimate methods that apply put fair value between $146.59 and $382.41 a share. They rest on different assumptions, so where they diverge is the story; the Graham Number is a stricter floor, not a target.

DCF · Growth Exit 10Y
$382.41
assumptions (10)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • terminalGrowth2.5%
  • projectionYears10
  • fcfGrowth7.9%
  • fcfBase$6.75B
DCF · Growth Exit 5Y
$322.91
assumptions (10)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • terminalGrowth2.5%
  • projectionYears5
  • fcfGrowth7.9%
  • fcfBase$6.75B
Earnings Power Value
$146.59
assumptions (8)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • normalizedEarnings$6.29B
  • growthAssumed0.0%
Graham Number
$163.9
assumptions (1)
  • grahamMultiplier2250.0%

Different models answer different questions — which to trust when →

v. The price question — last, on purpose
Is today’s price fair?
See live price ↗
Type a price. The ledger answers.
Or set your own belief
FCF growth, next 5 years7.9%
Discount rate (WACC)8.93%
Terminal growth2.5%
At your growth, a share is worth $322.91
The three cases
Bear0.0%$235.48
Base7.9%$322.91
Bull12.9%$392.31

Bear/base/bull growth = 0% / filed history / history + 5pp. Type a price to see the return each case implies.

Default growth 7.9%= this company’s own filed history (median-to-median FCF CAGR, clamped 0–20%). Your adjustments are recorded anonymously. They become the “what do owners actually believe” dataset.

Sources — the receipts
  1. 10-K · period ending 2021-08-29 · accession 0000909832-23-000042 (RevenueFromContractWithCustomerExcludingAssessedTax)
  2. 10-K · period ending 2022-08-28 · accession 0000909832-24-000049 (RevenueFromContractWithCustomerExcludingAssessedTax)
  3. 10-K · period ending 2023-09-03 · accession 0000909832-25-000101 (RevenueFromContractWithCustomerExcludingAssessedTax)
  4. 10-K · period ending 2021-08-29 · accession 0000909832-23-000042 (NetIncomeLoss)
  5. 10-K · period ending 2022-08-28 · accession 0000909832-24-000049 (NetIncomeLoss)
  6. 10-K · period ending 2023-09-03 · accession 0000909832-25-000101 (NetIncomeLoss)
  7. 10-K · period ending 2021-08-29 · accession 0000909832-23-000042 (NetCashProvidedByUsedInOperatingActivities)
  8. 10-K · period ending 2022-08-28 · accession 0000909832-24-000049 (NetCashProvidedByUsedInOperatingActivities)
  9. 10-K · period ending 2023-09-03 · accession 0000909832-25-000101 (NetCashProvidedByUsedInOperatingActivities)
  10. 10-K · period ending 2021-08-29 · accession 0000909832-23-000042 (PaymentsToAcquirePropertyPlantAndEquipment)
  11. 10-K · period ending 2022-08-28 · accession 0000909832-24-000049 (PaymentsToAcquirePropertyPlantAndEquipment)
  12. 10-K · period ending 2023-09-03 · accession 0000909832-25-000101 (PaymentsToAcquirePropertyPlantAndEquipment)
  13. 10-K · period ending 2021-08-29 · accession 0000909832-22-000021 (LongTermDebtNoncurrent)
  14. 10-K · period ending 2022-08-28 · accession 0000909832-23-000042 (LongTermDebtNoncurrent)
  15. 10-K · period ending 2023-09-03 · accession 0000909832-24-000049 (LongTermDebtNoncurrent)
  16. 10-K · period ending 2024-09-01 · accession 0000909832-25-000101 (LongTermDebtNoncurrent)
  17. 10-K · period ending 2021-08-29 · accession 0000909832-22-000021 (CashAndCashEquivalentsAtCarryingValue)
  18. 10-K · period ending 2022-08-28 · accession 0000909832-23-000042 (CashAndCashEquivalentsAtCarryingValue)
  19. 10-K · period ending 2023-09-03 · accession 0000909832-24-000049 (CashAndCashEquivalentsAtCarryingValue)
  20. 10-K · period ending 2024-09-01 · accession 0000909832-25-000101 (CashAndCashEquivalentsAtCarryingValue)