If you invested $10,000 in warehouse-style retailer Costco Wholesale (COST -0.70%) in 1990, you'd have over $400,000 today. Simply put, Costco stock was a life-changing investment for some investors thanks to its incredibly consistent performance.

As stellar as returns have been for Costco, one current risk unsettles some investors: It currently trades at a price-to-earnings (P/E) valuation of nearly 60. That's its highest valuation in over 30 years even though its growth prospects have cooled considerably over the past three decades.

Image source: Getty Images.

Costco stock has performed well in part because it has an attractive business model, as I'll explain. But I don't think anyone -- not even bullish shareholders -- can deny the stock is pricey right now. For this reason, I want to highlight three other companies that share certain characteristics of Costco's business model while being valued far more attractively today.

Those three stocks are Floor & Decor (FND 1.55%), Academy Sports and Outdoors (ASO 7.00%), and BJ's Wholesale Club (BJ -1.55%).

1. Floor & Decor

Whereas some retail chains try to open thousands of small locations, businesses such as Costco opt for hundreds of high-volume stores so that they can enjoy better economics. It's something that the late Charlie Munger pointed out about Costco, and an aspect of the business model he noticed was shared by Floor & Decor.

Same-store sales for Floor & Decor fell 1.8% in the first quarter of 2025. But that's how sales are generally trending in the home improvement space right now. For comparison, same-store sales dropped at Lowe's by an almost identical percentage. But keep in mind that Lowe's sells a lot more everyday items whereas Floor & Decor is largely dependent on large flooring projects. In other words, pullbacks in housing projects can disproportionately impact Floor & Decor compared to more general retailers.

Housing cycles ebb and flow, pointing to an eventual rebound for Floor & Decor and its 254 locations. But even in a slowdown, the business still had a first-quarter profit margin of 4%, continuing its years of consistent profitability. Like Costco, its high-volume business model is built for profits.

However, Floor & Decor should enjoy better long-term growth than Costco, which is one reason to prefer it. The business should be able to double or more in coming years as same-store sales rebound and as management grows the company to 500 locations. That's a plan that can lift returns for shareholders if well executed.

2. Academy Sports

Academy Sports also shares the business model of having several hundred high-volume locations. It only had 303 locations at the end of the first quarter of 2025. But management aims for sales volume of $12 million to $16 million in a new store's first year, which helps it have operating leverage, saving on certain expenses such as occupancy and logistics.

Like Floor & Decor, I believe Academy Sports' growth will be superior to Costco's growth, which is one reason to like it. It should open about 15 to 20 more locations in 2025, which can help grow its overall sales. And in coming years, it plans to keep opening new stores at a nice pace.

The biggest reason, I believe, to give Academy Sports stock careful consideration today is its valuation. Whereas Costco is trading at close to an all-time high P/E ratio, Academy Sports stock trades at just 8 times its earnings, which is far below the average valuation in the stock market.

Academy Sports is also using its profits to reward shareholders. For starters, it's paying a growing dividend. But it's also buying back stock. And coupled with its consistently cheap stock price, buybacks have allowed management to reduce its share count by a meaningful 20% over just the past three years, which is something that can really boost shareholder returns over the long term if it continues.

ASO Average Diluted Shares Outstanding (Quarterly) data by YCharts

3. BJ's Wholesale

Finally, BJ's Wholesale is the business most similar to Costco of these three companies. But to circle back to an earlier point, Costco stock does have some valuation risk today. By contrast, the valuation risk is much less for BJ's Wholesale, considering it's trading at a valuation that's more than 50% cheaper.

BJ PE Ratio data by YCharts

That said, I wouldn't recommend buying BJ's Wholesale stock simply because it's cheaper than Costco stock -- there are probably plenty of cheaper stocks that aren't worth buying. But I believe BJ's stock is worth considering because of its business fundamentals and its long-term prospects.

For its business fundamentals, BJ's sells memberships to its stores like Costco does. The company's membership fee income has increased every year for 25 years and its renewal rates currently sit at an all-time high of 90%. In short, the business is as strong as ever.

For its long-term prospects, I believe BJ's could have more meaningful growth than Costco. It plans to open between 25 and 30 new locations over the next two years combined. For perspective, it only has 255 club stores now and only opened 37 new locations over the last nine years combined. That's a substantial uptick in growth but its overall footprint is still small enough to expect moderate growth potential over the long haul.

For all its virtues, I believe Floor & Decor, Academy Sports, and BJ's could all outperform Costco stock over the next five years. The valuations are better and the growth rates should be superior. And that's a combination that should work in investors' favor.