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Costco (COST) sits at a $422 billion market cap, yet 45.5% earnings growth and near-perfect membership renewal support a $2,250 target by 2035.

Wall Street prices in just 13% upside, but e-commerce traffic grew 37% and executive membership hit 75%, compounding sharply over the next decade.

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Costco (NASDAQ:COST | COST Price Prediction) runs the most impressive retail model in America. Membership fees hit $1.373 billion last quarter, comparable sales rose 9.8%, and the worldwide renewal rate held at 89.7%. Yet the stock barely keeps pace with the broader market.

Shares closed at $951.89, and market cap sits at $422.14 billion. When does Costco become a trillion-dollar company? My call is 2035 at $2,250 per share.

The stock is up just 2.04% over the past year and 10.87% YTD, even as the underlying business grew earnings 45.5% year over year. The disconnect is valuation, not fundamentals. Costco trades at 48x trailing earnings, and a beta of 0.87 means shares don't get the reflexive lift a tech name would from a strong quarter.

A $14 million Washington state settlement over promotional emails hit the wires in late July, and shares fell 2.04% on July 30 despite an S&P 500 gain. Over one month, the stock managed only 3.11%. The market has decided the multiple is stretched and refuses to pay more until earnings catch up.

Wall Street's consensus target is $1,076.91, implying roughly 13% upside. The rating split: 3 strong buy, 19 buy, 13 hold, 1 sell, 1 strong sell, so 59% bullish and only 5% bearish. Our internal model puts the base case at $1,026.39 (7.83% upside), an optimistic case at $1,132.14, and a five-year bull target of $1,507.71, with 90% confidence.

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Both views are too short-sighted. Executive membership penetration just hit 75%. Digitally enabled comp sales grew 21.5% with e-commerce traffic up 37%. Compounding at that clip changes the math meaningfully over a decade.

Reaching $2,250 from today's price of $951.89 would require a gain of 136.4%. With forward EPS of $21.69, a price of $2,250 implies a forward P/E of 104x. Our base case of $1,026.39 already implies 48x, meaning the bold target requires 56x of additional multiple expansion on today's earnings. The path must run through earnings growth.

If Costco compounds EPS at roughly 10% to 11% annually through 2035 (in line with recent trajectory of 45.5% YoY quarterly earnings growth), forward EPS reaches the mid-$50s. A 40x multiple on that base delivers $2,250.

Catalysts: Kirkland Signature expanding into new categories with lowered staple prices, the on-site solar and battery system at Costco's Port St. Lucie distribution center with Trinity Energy as a template for warehouse cost reduction, and market share shifting to Costco and Amazon as Kroger and Albertsons contract.

The primary risk: any material break in the 89.7% renewal rate would end the thesis.

Costco trades at a forward P/E of 44x. That is rich for consumer defensive, but justified by 45.5% YoY earnings growth and near-perfect member retention.

Shares sit at $951.89, versus a 52-week range of $840.35 to $1,094.76, about 13% off the peak. Over ten years, Costco has returned 577.99%. That long-term compounding rate makes the trillion-dollar case defensible.

$2,250 by 2035 requires a gain of 136.4%. It is a stretch, but defensible.

Three things need to go right: EPS compounding at 10%+ annually, executive membership penetration continuing to climb past 75%, and the international warehouse pipeline delivering on the 940-plus base targeted for FY2026. Any meaningful slippage in renewal rates derails it. We've outlined the blueprint for how Costco could reach $2,250 in 2035.

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Contact editorial@247wallst.com for any questions or corrections.