Prediction: Costco Could Be Worth More Than Home Depot and Lowe's Combined by 2030. Here's the Math.

Costco is leveraging its membership “recurring revenue” model: membership-fee revenue rose to $4.06B in the first 36 weeks of fiscal 2026 (from $3.60B), while net sales grew 9.6% YoY and the retailer grew to 931 warehouses. The article argues Costco could plausibly compound in value to about $526B by 2030 assuming 6% annual growth, potentially surpassing the combined market caps of Home Depot (~$327B as of Aug. 31) and Lowe’s (~$115B). Upside hinges on continued warehouse expansion and spending per member, but there is valuation risk if growth slows or the market compresses the multiple.

Analysis

The cleaner read here is not that Costco is "cheap" versus home-improvement, but that its cash-flow profile is becoming more bond-like while HD/LOW remain cyclical duration trades on housing and remodel confidence. In a softer consumer environment, the spend mix should migrate toward essentials, fuel, and private label, which mechanically favors COST’s traffic conversion and hurts ticket-size-sensitive categories at HD/LOW before any recession shows up in reported sales.

The biggest near-term catalyst is not market-cap arithmetic; it is whether the next few monthly comp prints and renewal metrics confirm that members are trading down into recurring household baskets. Over 1-3 months, housing data is the swing factor: if mortgage rates ease and DIY demand rebounds, the relative-value case for COST over HD/LOW narrows quickly because the market will start pricing a renovation backlog release. Over 6-18 months, the real risk to COST is multiple compression—if growth merely stays good rather than great, the stock can underperform even with solid operations.

Consensus is treating COST as a perpetual compounder and HD/LOW as structurally slower, but the market often overpays for perceived stability late in a cycle. The underappreciated point is that COST’s premium multiple is more fragile than its operating model; one or two turns of multiple fade can offset a year of mid-single-digit growth. The thesis is falsified if renewal/membership monetization softens, or if housing starts and renovation spend re-accelerate enough to improve HD/LOW comps and margin mix.

Key Decisions for Investors

• Prefer a 6-12 month relative-value pair: long COST / short equal-dollar HD + LOW basket. Thesis: essentials and fuel hold up while remodel demand stays deferred; target modest outperformance rather than absolute upside. Stop if HD/LOW comparable sales inflect positively for two consecutive quarters.
• If initiating COST exposure, use pullbacks rather than chase strength. The stock is a high-quality compounder but the valuation leaves limited error; a 5%+ drawdown or post-earnings drift is a better entry than paying up into a momentum extension.
• Use XHB as a cleaner macro hedge if housing softens further. Short XHB against a consumer-staples basket or against COST only if mortgage/application data and housing permits continue rolling over for another 1-2 months.
• Watch for falsifiers: renewal-rate softness at COST, a surprise increase in executive-tier attrition, or a durable improvement in remodel demand. Any of those would narrow the spread trade and argue for covering HD/LOW shorts.