Amid the recent market sell-off, retail giant Costco (NASDAQ:COST) managed to report robust September sales numbers which smashed expectations out of the water and underscored that the U.S. economy is currently firing on all cylinders.

The strong numbers provided a lift to Costco stock, which has been dinged recently due to a weak guide and broad market weakness. A month ago, Costco stock was trading north of $240. It dropped all the way to below $220 in early October. Now, the stock is rebounding back towards $225.

All in all, the situation at Costco stock is ostensibly favorable. The numbers remain good. The growth drivers remain strong. Costco stock corrected downward and is now presumably resuming its upward trend, thanks to still-strong fundamentals.

But I would be wary of Costco stock at current levels. The valuation simply seems too full to support much more upside, and today’s robust comparable sales growth is unsustainable. Inevitably, comparable sales growth will cool and, when it does, the presently super-charged valuation on Costco stock could compress.

Long-term, this stock is a winner. But, the price isn’t right here and now. As such, I think investors can afford to wait for a better entry.

Costco Stock Is a Long-Term Winner

Over the past several years, Costco has faced multiple threats — and easily dismantled all of them.

There was the concern that Amazon (NASDAQ:AMZN) would eat Costco’s lunch by taking over the subscription retail model. That didn’t happen. Instead, Costco’s subscription retail model proved to be its moat against Amazon — and while Amazon grew, so did Costco. The retailers who lost were those who didn’t have a sticky customer base to fall back on.

There was also the concern that Amazon’s acquisition of Whole Foods, and Walmart (NYSE:WMT) and Target’s (NYSE:TGT) expansions into grocery, would negatively affect Costco’s sales. That also didn’t happen. Yet again, Costco’s subscription retail model proved to be a moat, while its all-in-one convenience proved to be a distinct advantage. Thus, as Whole Foods, Walmart grocery and Target grocery grew, so did Costco. The grocers who lost were those didn’t have a unique value prop like Costco.

In the big picture, Costco has proven its staying power as the Amazon of the brick-and-mortar world. Costco’s membership base is akin to Amazon Prime and gives the company a sticky customer base to consistently fall back on. Meanwhile, those membership revenues allow Costco to price items at huge discounts. Plus, you can find pretty much everything you want at Costco.

In other words, Costco has a loyal customer base, always low prices and unprecedented convenience. Those attributes make Costco a long-term winner. But that doesn’t mean investors should rush to buy Costco stock at current levels.

Beware of Valuation Friction

Valuation matters and, at current levels, Costco stock seems more than fully valued.

Let’s consider the trailing earnings multiple on Costco stock. It currently hovers around 32. Historically, it has hovered around 29, so the stock is trading at a 10%-plus premium to a historically average valuation. Moreover, essentially every time that COST stock’s price-to-earnings ratio jumped above 30 over the past five years, the stock was approaching a near-term peak and proceeded to drop until the trailing multiple fell back to 28 or lower.

Let’s also consider the trailing dividend yield on Costco stock. It currently is below 1%. Normally, the dividend yield is above 1%. Over the past five years, every time the dividend yield dropped to below 1%, Costco stock was at a near-term peak.

In other words, the valuation on COST stock seems stretched at current levels. While some investors might say that a stretched valuation is warranted given currently robust growth, I’d argue that this robust growth is unsustainable. Long-term average comparable sales growth for Costco over the past decade is roughly 5%. Last year, comparable sales growth was nearly 10%. Such huge divergences from the norm are usually followed by reversions to the norm (this happened earlier in the 2010s).

Consequently, it is likely that today’s robust growth rates moderate in the foreseeable future. Once they do, the current valuation will seem obviously overextended, and Costco stock could drop.

Bottom Line on COST Stock

This stock is a long-term winner. But the price isn’t right here and now. Investors can wait for a better entry — and could get one soon.

As of this writing, Luke Lango was long AMZN and WMT.