Is This Stock the Next Costco (But Cheaper)?

Everyone loves Costco. Great business, loyal members, recession-resistant model. It’s earned the premium.

But what if there were another version of Costco — same membership flywheel, same margin structure, same steady expansion — but at half the valuation and with more room to grow?

Meet BJ’s Wholesale (NYSE: BJ).

Why It’s On Our Radar

1. BJ’s is a B-rated Stock According to our Quant Ratings System

It’s not flashy, but it’s fundamentally solid. Consistent revenue. Growing memberships. Expanding store base. For investors who like durable retail models, this is one of the best-run midcaps in the sector. It’s no wonder it scores a B or “Buy” rating according to our Zen Ratings system. Similar stocks returned 19.88% per year.

Top wall street analysts are predicting ~15% returns on average: 

See BJ price predictions here.

2. It’s Costco’s Smaller Cousin — Just Cheaper

Costco’s current forward P/E? 48

BJ’s forward P/E? Just ~25

That’s almost a 50% discount. Which is why, while COST is a phenomenal stock, it also scores a D in value right now. You’re paying up for what’s already priced in. Here’s why that can be dangerous.

BJ stock is not only a better value, but also scores a B in Growth, meaning it’s seeing sales accelerations, margin improvements, and more. See how it scores for Value, Momentum, and more here.

3. The membership engine is working

BJ’s has raised its membership income every single year for 25 years. Renewal rates just hit an all-time high: 90%. That’s almost Costco-tier loyalty — without the premium price tag. The business model is already proven … but the growth is just beginning.

The Growth Story Is Just Getting Started

One of the key differences here? BJ’s footprint is still small. Just 255 stores today. 

But that’s changing fast:

• Plans to open 25–30 new locations over the next two years
• For context, it only opened 37 total in the last nine years
• Translation: expansion rate is accelerating … and still has a long runway

Costco, by comparison, is already built out in many prime markets. BJ’s is still playing offense.

The Setup in a Nutshell

• Market Cap: ~$10B
• Valuation: ~25x earnings
• Rating: B
• Model: Proven, subscription-based, recession-resilient
• Growth runway: Long … store count could double over the next decade
• Risk profile: Lower than most “growth” names due to recurring revenue

This isn’t a speculative bet. If anything, it’s attractive because the thesis is so simple: same structure, better price, more room to run.

Bottom Line

Costco is the gold standard in retail … but everyone knows it, so that comes with a steep markup.

BJ’s offers the same playbook—membership model, high retention, long-term pricing power—but with a lower multiple and a bigger growth path ahead.

For investors who love the Costco story but hate paying 48x earnings to own it, BJ’s might be the answer. It’s not hype. It’s just math.

Click here to add it to your watchlist.

What to Do Next?

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