Costco Wholesale Corporation (Costco) has a solid business model with a predictable stream of subscription revenue, which constitutes 90% of the net profit.
In the video (embedded below), I have projected out Costco’s financial statements and valued its equity. Although, Costco trades at a P/E of ~36 (amongst the highest in the retail business it operates in), I have found it to be fairly valued.
I have embedded the base excel (without the projections). Please feel free to download and try to model the financial statements and value Costco’s equity if you’d like. Do write to me if you have any questions.
