DCF Tool

COST

Costco Wholesale Corp – All Other General Merchandise Stores
Costco Wholesale Corporation is an American multinational corporation which operates a chain of membership-only big-box retail stores. The company offers sundries, dry groceries, candies, coolers, freezers, liquor, and tobacco and deli products; appliances, electronics, health and beauty aids, hardware, garden and patio products, sporting goods, tires, toys and seasonal products, office supplies, automotive care products, postages, tickets, apparel, small appliances, furniture, domestics, housewares, special order kiosks, and jewelry; and meat, produce, service deli, and bakery products.
Analysis Results
Intrinsic Value $145.35
Latest Price $491.48
Relative Value 238% overvalued
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Cash Flow (Billions)
Analysis Parameters
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Analysis Details
Growth Rate Projection

An exponential growth model was fit to the past cash flow data, giving more weight to more recent years. This model determined a growth rate estimate of 17.4%.

Weighted Average Cost of Capital (WACC)

The calculated WACC is 8.6%. This value is used as the default discount rate.

Value of Future Flows

Assuming a growth rate of 17.4%, the cash flows for the next 5 years are projected.

The present value of each year's flow is adjusted to present value using the discount rate.

Year Future flow (billion) Present value (billion)
2023 2.75 2.53
2024 3.23 2.74
2025 3.79 2.96
2026 4.45 3.2
2027 5.23 3.46
Terminal Value

Assuming a growth rate after the projection years of 2.0%, the terminal value of the company would be 81.2 billion. This corresponds to a present value of 49.6 billion.

Intrinsic Value Per Share

The total present value of the projected cash flows is 14.9 billion. Adding in the terminal value gives a total present value of 64.5 billion.

There are presently 443.0 million outstanding shares, so the intrinsic value per share is 145.35.

Financial Statements

The following data was to determine the past cash flows.

Current Assets 32,696,000,000
Current Cash 11,049,000,000
Current Liabilities 31,998,000,000
Current Debt 73,000,000
Non-Cash Working Capital (NCWC) -10,278,000,000
Change in NCWC 1,034,000,000
EBIT 7,793,000,000
Tax Provision 1,925,000,000
Depreciation and Amortization 1,900,000,000
Capital Expenditure -3,891,000,000
Unlevered Free Cash Flow 4,922,540,178
Current Assets 29,505,000,000
Current Cash 12,175,000,000
Current Liabilities 29,441,000,000
Current Debt 799,000,000
Non-Cash Working Capital (NCWC) -11,312,000,000
Change in NCWC -1,378,000,000
EBIT 6,708,000,000
Tax Provision 1,601,000,000
Depreciation and Amortization 1,781,000,000
Capital Expenditure -3,588,000,000
Unlevered Free Cash Flow 1,915,289,221
Current Assets 28,120,000,000
Current Cash 13,305,000,000
Current Liabilities 24,844,000,000
Current Debt 95,000,000
Non-Cash Working Capital (NCWC) -9,934,000,000
Change in NCWC -2,437,000,000
EBIT 5,435,000,000
Tax Provision 1,308,000,000
Depreciation and Amortization 1,645,000,000
Capital Expenditure -2,810,000,000
Unlevered Free Cash Flow 508,427,613
Current Assets 23,485,000,000
Current Cash 9,444,000,000
Current Liabilities 23,237,000,000
Current Debt 1,699,000,000
Non-Cash Working Capital (NCWC) -7,497,000,000
Change in NCWC -601,000,000
EBIT 4,737,000,000
Tax Provision 1,061,000,000
Depreciation and Amortization 1,492,000,000
Capital Expenditure -2,998,000,000
Unlevered Free Cash Flow 1,575,234,627
Current Assets 20,289,000,000
Current Cash 7,259,000,000
Current Liabilities 19,926,000,000
Current Debt 0
Non-Cash Working Capital (NCWC) -6,896,000,000
Change in NCWC -1,025,000,000
EBIT 4,480,000,000
Tax Provision 1,263,000,000
Depreciation and Amortization 1,437,000,000
Capital Expenditure -2,969,000,000
Unlevered Free Cash Flow 649,195,407
Current Assets 17,317,000,000
Current Cash 5,779,000,000
Current Liabilities 17,495,000,000
Current Debt 86,000,000
Non-Cash Working Capital (NCWC) -5,871,000,000
Change in NCWC -1,885,000,000
EBIT 4,111,000,000
Tax Provision 1,325,000,000
Depreciation and Amortization 1,370,000,000
Capital Expenditure -2,502,000,000
Unlevered Free Cash Flow -254,619,707
Current Assets 15,218,000,000
Current Cash 4,729,000,000
Current Liabilities 15,575,000,000
Current Debt 1,100,000,000
Non-Cash Working Capital (NCWC) -3,986,000,000
Change in NCWC 391,000,000
EBIT 3,672,000,000
Tax Provision 1,243,000,000
Depreciation and Amortization 1,255,000,000
Capital Expenditure -2,649,000,000
Unlevered Free Cash Flow 1,407,796,352
Current Assets 17,299,000,000
Current Cash 6,419,000,000
Current Liabilities 16,540,000,000
Current Debt 1,283,000,000
Non-Cash Working Capital (NCWC) -4,377,000,000
Change in NCWC -238,000,000
EBIT 3,624,000,000
Tax Provision 1,195,000,000
Depreciation and Amortization 1,127,000,000
Capital Expenditure -2,393,000,000
Unlevered Free Cash Flow 918,368,479
Current Assets 17,588,000,000
Current Cash 7,315,000,000
Current Liabilities 14,412,000,000
Current Debt 0
Non-Cash Working Capital (NCWC) -4,139,000,000
Change in NCWC -598,000,000
EBIT 3,220,000,000
Tax Provision 1,109,000,000
Depreciation and Amortization 1,029,000,000
Capital Expenditure -1,993,000,000
Unlevered Free Cash Flow 541,021,582
Current Assets 15,840,000,000
Current Cash 6,124,000,000
Current Liabilities 13,257,000,000
Current Debt 0
Non-Cash Working Capital (NCWC) -3,541,000,000
Change in NCWC 46,000,000
EBIT 3,053,000,000
Tax Provision 990,000,000
Depreciation and Amortization 946,000,000
Capital Expenditure -2,083,000,000
Unlevered Free Cash Flow 971,351,032
Current Assets 13,526,000,000
Current Cash 4,854,000,000
Current Liabilities 12,260,000,000
Current Debt 1,000,000
Non-Cash Working Capital (NCWC) -3,587,000,000
Change in NCWC -530,000,000
EBIT 2,759,000,000
Tax Provision 1,000,000,000
Depreciation and Amortization 908,000,000
Capital Expenditure -1,480,000,000
Unlevered Free Cash Flow 659,891,217

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