Costco's stock ($COST) has experienced a decline of 5% following an earnings miss, leading to concerns about its high price-to-earnings (P/E) ratio, which currently stands at 52x. Analysts and investors are questioning the sustainability of this valuation amid a slowing economy and increasing union labor. Some commentators argue that the company's P/E ratio should not exceed 30x, citing the need for a more conservative valuation approach. Despite these concerns, Costco maintains a strategy of keeping low gross margins to ensure customer satisfaction and high employee wages, with the average wage for U.S. employees reported at $31 per hour. The company's earnings per share (EPS) growth of 8% has also been viewed as underwhelming in light of its elevated trading multiple, which is currently at 60x earnings according to some analysts. Historical data indicates that the P/E ratio has expanded significantly, prompting caution among investors regarding further purchases of the stock.