Walmart WMT
What does Walmart do?
Walmart operates retail and wholesale stores, membership clubs, online shops and mobile applications worldwide. Its business is divided into three segments: Walmart U.S., Walmart International and Sam's Club U.S. It mainly sells groceries, consumer goods such as household items, pet supplies and baby products, as well as general merchandise and fuel. The stores operate under brands such as Walmart Supercenter and Neighborhood Market.
Revenue arises predominantly from brick-and-mortar retail, supplemented by e-commerce, pickup services and delivery services. Membership fees at Sam's Club and income from advertising, marketplace business and financial services are also included. Internationally, the group is represented through holdings such as Flipkart and PhonePe, among others. Competitively, Walmart relies on very large purchasing power, a dense store network, its own logistics and consistently low price levels. Competitors include other grocery and discount retailers, department store chains, club operators and pure online retailers.
Score profile
Rank vs. Discount Stores (8 companies). 10 = top of the group, 5 = middle. Calculated from the metrics below, without AI.
Metrics compared with the industry
On profitability and quality, Walmart ranks below average in the group Discount Stores (3.1/10). On growth, the company ranks in the bottom fifth in the group Discount Stores (1.9/10). On valuation (higher = cheaper), the stock ranks below average in the group Discount Stores (2.3/10). On financial strength, Walmart ranks below average in the group Discount Stores (2.7/10).
| Metric | Stock | Group median | Ranking |
|---|---|---|---|
| Forward P/E | 38.9x | 20.6x | better than 19 % |
| Trailing P/E | 45.5x | 22.7x | better than 19 % |
| PEG ratio | 4.3x | 2.2x | better than 21 % |
| EV/EBITDA | 24.2x | 14.1x | better than 19 % |
| Price/sales | 1.4x | 1.1x | better than 31 % |
| Price/book | 10.2x | 5.2x | better than 19 % |
| Revenue growth | 5.9% | 8.1% | better than 31 % |
| Earnings growth | -9.1% | 26.3% | better than 6 % |
| Gross margin | 24.8% | 26.6% | better than 44 % |
| Operating margin | 3.5% | 5.0% | better than 6 % |
| Net margin | 3.0% | 3.5% | better than 31 % |
| Return on equity | 22.3% | 24.4% | better than 44 % |
| Debt/equity | 71.7% | 89.6% | better than 56 % |
| Current ratio | 0.8x | 1.1x | better than 19 % |
| Free cash flow yield | 0.7% | 2.0% | better than 6 % |
| Dividend yield | 0.8% | 0.8% | – |
| Payout ratio | 35.0% | 30.7% | – |
| Beta | 0.53 | 0.61 | – |
Valuation: what is Walmart worth?
Two valuation approaches – a discounted cash flow model and a valuation at the industry’s median multiples – give Walmart a model range of 66.35 USD to 69.13 USD per share.
40 analysts, average rating “Buy”, average price target 128.45 USD (+2.3%).
The full DCF matrix, the reverse DCF (what growth the price implies) and scenarios are part of the Pro analysis.
What the business depends on
- Revenue depends heavily on customer traffic and basket size in the grocery and consumer goods business, which is relatively insensitive to the economic cycle.
- Purchasing power and logistics efficiency enable low prices and secure market share as well as margin in the low-margin retail business.
- Growing revenue from e-commerce, advertising, marketplace and memberships can structurally support earnings above those from pure merchandise sales.
Risks
- Intense price competition with discounters, grocers and online providers limits margins and forces ongoing investment in prices.
- Higher wage, transport and merchandise costs, as well as tariffs and supply chain disruptions, can weigh on the already low margin.
- The international business exposes the group to currency, regulatory and political risks, and legal disputes are also a threat.
What to look for with Walmart
Same-store sales growth is particularly informative because it shows organic growth from customer traffic and basket size without effects from new store openings.