Costco Wholesale Corporation (COST): A Bull Case Theory

We came across a bullish thesis on Costco Wholesale Corporation on Value investing subreddit by snapjohn. In this article, we will summarize the bulls’ thesis on COST. Costco Wholesale Corporation's share was trading at $914.80 as of October 7th. COST’s trailing and forward P/E were 50.34 and 45.87 respectively according to Yahoo Finance.

Costco has partnered with Novo Nordisk to sell GLP-1 drugs Ozempic and Wegovy at $499 per month without requiring insurance, starting October 2025. The drugs are available at over 600 pharmacies as part of Costco’s member prescription program, though a prescription is still needed. This move could be significant, given the rapidly growing demand for GLP-1 medications, and appears aligned with Costco’s strategy of driving traffic through low-margin, high-volume offerings, similar to its approach with gas and rotisserie chicken.

The partnership could strengthen Costco’s healthcare proposition, as its pharmacy revenue is already growing roughly 15% year-over-year, and these drugs could serve as an additional membership hook, potentially boosting renewal rates and average spend per member. While the near-term impact on earnings per share may be limited, the initiative reinforces Costco’s competitive moat by increasing member engagement and creating a more compelling value proposition. For Novo Nordisk, the partnership provides an expanded U.S. distribution channel ahead of Eli Lilly’s Zepbound launch, enhancing the durability of its market presence.

Although both stocks trade at elevated valuations—Costco around 45x earnings and Novo Nordisk near 40x—the real-world expansion into mainstream pharmacy access supports long-term resilience for both companies, illustrating how strategic partnerships can combine consumer access and revenue growth while solidifying competitive advantages. This initiative underscores the evolving intersection of retail and healthcare, demonstrating Costco’s ability to leverage scale and brand trust to enter high-demand categories and reinforce member loyalty, while Novo Nordisk gains a robust channel for sustained penetration in a critical U.S. market.

Previously we covered a bullish thesis on Costco Wholesale Corporation (COST) by FluentInQuality in March 2025, which highlighted its membership-driven revenue model, operational efficiency, and volume-driven growth. The company's stock price has depreciated approximately by 12.61% since our coverage due to broader market pressures. The thesis still stands as Costco’s model remains resilient. SnapJohn shares a similar perspective but emphasizes GLP-1 drug sales with Novo Nordisk.

Costco Wholesale Corporation is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 91 hedge fund portfolios held COST at the end of the second quarter which was 93 in the previous quarter. While we acknowledge the potential of COST as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Disclosure: None.