What changed
$COST — AVOID 📊 | 6 MONTHS THESIS
🎯 FQ3 FY2026 (ends May) | reported May 28 | Rev $70.5B | EPS $4.93 vs $4.98 🔴 | Margin 4.0%
💡 Consensus assumes sustained high growth to justify the 100th percentile PE, but the Q2 miss and 9.8% comp growth (vs. history) indicate the business is maturing. The market is failing to price in margin pressure and the law of large numbers, creating a major valuation disconnect.
📉 Reward/risk: 13.0:1
🏢 Business Quality: 7/10
📊 Valuation: rich
🔮 Catalyst: Q3 2026 earnings (expected Sep 2026)
💰 Entry: $952.54, stop $1000.0, target $334.86
⚖️ Avoid COST at $942; 49x earnings at an all-time high, a recent EPS miss, and a 0.8:1 reward/risk (with 65% downside) make it a dangerous long.