COST vs WMT: Costco vs Walmart — Which Retail Giant Wins?: AI Score, Valuation, Performance and Upside
Costco is priced as a compounding membership machine with minimal earnings volatility, while Walmart is a diversified retail and emerging advertising platform at a more moderate valuation. COST commands a premium for its model quality; WMT offers more growth levers through advertising and e-commerce at a lower starting multiple.
Use this COST vs WMT comparison to weigh model quality against valuation. Costco's membership economics and loyalty are exceptional but come at a steep price. Walmart's diversification into advertising and digital commerce may offer more upside from current levels for valuation-sensitive investors.
WMT holds the edge across 4 of 5 key metrics in this comparison. WMT leads on both 1-year return (+18.04%) and forward P/E quality (34.77x vs 41.55x for COST), a relatively favorable combination of momentum and valuation. On fundamentals, COST is growing revenue faster (21.50%), while WMT maintains the higher operating margin (4.22%) — a classic growth-versus-profitability split. Analyst consensus implies meaningfully more upside for WMT (+21.31%) than for COST (+14.46%).
- →Want a high-quality compounder with predictable membership-driven earnings
- →Value near-100% gross margin on membership fees as a durable profit floor
- →Are comfortable paying a premium multiple for a best-in-class retail model
- →Prefer a retailer with minimal business model disruption risk
- →Want exposure to the world's largest retailer with a growing advertising business
- →Prefer a more moderate valuation with multiple long-term growth levers
- →Believe Walmart+ and Walmart Connect can meaningfully close the gap with Amazon
- →Value grocery and essential goods resilience across economic cycles
| Metric | COST | WMT |
|---|---|---|
| AI score | 60.6 | 53.3 |
| AI rank | #190 | #323 |
| Latest close | $935.80 | $112.20 |
| 1M return | -1.64% | -4.25% |
| 6M return | -2.89% | -6.27% |
| 1Y return | -1.59% | +18.04% |
How much would $10,000 be worth today if invested at the start of each period, with all dividends reinvested?
| Period | COST | WMT |
|---|---|---|
| 1Y ago | $9.88K (-1.2%) started 2025-07-21 | $11.73K (+17.3%) started 2025-07-21 |
| 5Y ago | $24.85K (+148.5%) started 2021-07-21 | $26.68K (+166.8%) started 2021-07-21 |
| 10Y ago | $78.7K (+687.0%) started 2016-07-21 | $64.29K (+542.9%) started 2016-07-21 |
Hypothetical — past performance does not guarantee future results.
| Metric | COST | WMT |
|---|---|---|
| Market cap | $417.26B | $909.13B |
| Trailing P/E | 47.40 | 40.23 |
| Forward P/E | 41.55 | 34.77 |
| Price/Sales | 1.67 | 1.14 |
| EV/Revenue | 1.42 | 1.35 |
| Analyst target | $1,076.91 | $138.59 |
| Target upside | +14.46% | +21.31% |
| Metric | COST | WMT |
|---|---|---|
| Revenue growth | 21.50% | 7.30% |
| Earnings growth | 45.50% | 19.40% |
| EPS growth | +45.50% | +19.40% |
| FCF margin | +2.37% | +0.95% |
| Operating margin | 3.67% | 4.22% |
| Profit margin | 3.01% | 3.14% |
| ROIC proxy | 29.15% | 24.13% |
| Return on equity | 29.15% | 24.13% |
| Dividend yield | 0.62% | 0.87% |
| Beta | 0.87 | 0.60 |
| Debt/equity | 60.26 | 74.82 |
| Current ratio | 1.07 | 0.77 |
| Quick ratio | 0.56 | 0.19 |
Lower drawdown and smaller single-period drops generally indicate a smoother ride, though they do not guarantee lower future risk.
| Period | Metric | COST | WMT |
|---|---|---|---|
| 1Y | Growth | -1.24% | +17.28% |
| CAGR | -1.25% | +17.36% | |
| Sharpe ratio | -0.19 | 0.59 | |
| Max drawdown | 16.57% | 18.91% | |
| Max daily drop | 4.21% | 7.27% | |
| Max wkly drop | 8.96% | 11.67% | |
| 5Y | Growth | +136.67% | +152.04% |
| CAGR | +18.81% | +20.32% | |
| Sharpe ratio | 0.68 | 0.75 | |
| Max drawdown | 31.40% | 25.74% | |
| Max daily drop | 12.45% | 11.38% | |
| Max wkly drop | 16.26% | 19.49% | |
| 10Y | Growth | +560.14% | +438.96% |
| CAGR | +20.78% | +18.35% | |
| Sharpe ratio | 0.77 | 0.68 | |
| Max drawdown | 31.40% | 25.74% | |
| Max daily drop | 12.45% | 11.38% | |
| Max wkly drop | 16.26% | 19.49% |
| Category | COST | WMT |
|---|---|---|
| Company | Costco Wholesale Corporation | Walmart Inc. |
| Sector | Consumer Defensive | Consumer Defensive |
| Industry | Discount Stores | Discount Stores |
| Core business | Membership-based warehouse retailer selling bulk merchandise at low markup. Revenue durability comes from membership fees, which carry near-100% gross margins and extremely high renewal rates. | World's largest retailer by revenue with stores, Sam's Club membership warehouses, Walmart+, and a fast-growing advertising and marketplace business (Walmart Connect). |
| Investor focus | Membership fee growth and renewal rates, same-store sales momentum, international expansion, and whether the premium valuation is justified by the compounding membership model. | U.S. comp store sales, Walmart+ subscriber growth, advertising revenue scaling, grocery share gains vs Amazon, and international unit performance (especially Flipkart). |
- →Membership fee stream acts as a nearly pure-profit recurring revenue layer
- →Extremely high membership renewal rates (~93%) indicate deep customer loyalty
- →Limited SKU model keeps costs low and inventory turns high
- →Grocery dominance provides traffic and resilience in any economic environment
- →Walmart Connect advertising business growing rapidly from a high-margin base
- →Walmart+ and fulfillment services increasingly position WMT as an ecosystem play
- →Premium valuation — COST consistently trades at a significant P/E premium to peers
- →Execution risk in international expansion and new warehouse ramp
- →Consumer spending sensitivity in a discretionary slowdown
- →Margin pressure from supply chain costs, shrink, and mix shift to lower-margin grocery
- →Walmart+ subscriber growth vs Amazon Prime scale advantages
- →International complexity (Flipkart valuation, China JV) adds earnings uncertainty
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