Is Costco Wholesale Corp's Stock a Buy Ahead of Its Q4 Earnings Report Tomorrow?

Is Costco Wholesale Corp's Stock a Buy Ahead of Its Q4 Earnings Report Tomorrow? Jeremy Bowman, The Motley Fool Wed, May 27, 2026 at 2:35 PM GMT+2 4 min read COST Costco (Nasdaq: COST) has been a paragon of consistency in the retail industry throughout its history, and it's established a wide economic moat thanks to its business model and track record of customer satisfaction. Costco will put that reputation on the line when it reports third-quarter earnings on Thursday after-hours.

Will AI create the world's first trillionaire? Our team just released a report on a little-known company, called an "Indispensable Monopoly," providing the critical technology Nvidia and Intel both need. Continue » Analysts are expecting revenue at the retail giant to grow 10.

2% to $69. 6 billion and for generally accepted accounting principles ( GAAP ) earnings per share to improve from $4. 28 to $4.

92. Is Costco a buy ahead of earnings? Let's take a closer look at what to expect.

Image source: The Motley Fool. The consumer is under pressure Costco's report comes the week after we heard from two of its closest competitors. Walmart and Target both reported earnings last week, and while they delivered solid results, they expressed cautiousness about the remainder of the year, noting that the consumer is facing pressure from inflation, including high gas prices, and a weak labor market.

Both companies also noted the benefit from increased tax refunds in the quarter, which could help Costco as well. Costco is less sensitive to the macroeconomic environment because of its membership model. It makes most of its profit from membership fees, and its membership model means that its customers are higher-income than those of the typical retailer.

What to watch in Costco's quarterly report Costco reports comparable sales growth every month so its quarterly report is less of a surprise than it is for its peers. In the four weeks ending May 3, comparable sales adjusted for gas prices and foreign exchange rose 7. 8%, an improvement over the 6.

5% growth in the first 35 weeks. High gas prices tend to pinch consumer spending, but they can be a good thing for Costco, as cheap gas is part of the appeal of shopping there. In fact, high gas prices tend to encourage its members to visit more often, which could translate into more spending inside the store, and even an increase in members.

This is Costco's first quarterly report since the war in Iran began, so investors should pay attention to any commentary on gas prices. Is Costco a buy? Based on results from Walmart and Target, Costco's own comparable sales, and the potential tailwinds from higher gas prices, Costco looks poised to deliver strong third-quarter results.

Costco doesn't give guidance, so investors won't get much insight into the current quarter. Story Continues While Costco's business remains rock-solid, the stock is still uniquely expensive for a retailer with a price-to-earnings ratio of 52, which is significantly higher than any of its peers. Costco deserves a premium, but at that price, the upside for the stock seems limited.

Investors considering buying the stock should be patient and capitalize on pullbacks in the stock as they occur. With much of the positive information from the quarter already seemingly priced in, it wouldn't be surprising to see Costco move lower following the update due to concern about its valuation. Should you buy stock in Costco Wholesale right now?

Before you buy stock in Costco Wholesale, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the  10 best stocks for investors to buy now… and Costco Wholesale wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004...

if you invested $1,000 at the time of our recommendation,  you’d have $477,813 ! * Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,320,088 !

* Now, it’s worth noting  Stock Advisor’s total average return is 986 % — a market-crushing outperformance compared to 208% for the S&P 500.   Don't miss the latest top 10 list, available with  Stock Advisor , and join an investing community built by individual investors for individual investors. See the 10 stocks » *Stock Advisor returns as of May 27, 2026.

Jeremy Bowman has positions in Target. The Motley Fool has positions in and recommends Costco Wholesale, Target, and Walmart. The Motley Fool has a disclosure policy .

Is Costco Wholesale Corp's Stock a Buy Ahead of Its Q4 Earnings Report Tomorrow?