Walmart (WMT) Analysis

This report is auto-generated by an AI stock research platform for informational purposes only. The content is for general information and research reference, and does not constitute financial advice. Data may lag or be incomplete. Always conduct your own research and consult qualified professionals before making any financial decisions. # [Qiltrack AI] Walmart Inc (WMT) 3-Minute Overview ## 🎯 Layer 1: 30-Second Key Takeaways > **💡 One-Sentence Summary** > > Walmart is the world’s largest retailer — a massive, low-margin machine that moves billions of dollars in groceries and general merchandise every quarter, while quietly building a profitable ad business and membership ecosystem on the side. > **📍 Basic Profile** > > Market Cap **$963.17 billion** · Retail · NASDAQ · Price **$109.33** --- > **⚡ 3 Things You Should Know** > > 1. 💰 **Cash Flow Machine:** Despite razor-thin net margins (~3%), Walmart generates over $10 per share in free cash flow — meaning it throws off enormous cash with relatively low reinvestment needs. > > 2. 📉 **Growth Is Slowing — But Not Broken:** Revenue has grown at a steady ~5% annually over 3 and 5 years, but the stock is down ~13% over the past 90 days, suggesting the market is worried that high expectations aren't being met. > > 3. 🏷️ **Expensive vs. Its Own History:** At 39x trailing earnings, WMT trades well above its own historical average. The market is betting that Walmart’s high-margin ad business (Walmart Connect) and membership growth (Walmart+) will transform it from a low-growth retailer into a tech-like compounder. --- > **🎯 Quick Health Check** > > | Dimension | Rating | Details | > |-----------|--------|---------| > | Profitability | Strong💪 | Net margin 3.13%, ROE 23.9% — excellent for retail | > | Growth Rate | Steady📈 | Revenue growth ~5% annually, EPS growing faster (~24% over 3 years) | > | Financial Health | Moderate💛 | Debt-to-equity 0.52 is manageable, but current ratio 0.77 is tight | > | Valuation | Expensive | PE 39.3x vs. 5-year average ~25x — priced for perfection | --- ## 📋 Layer 2: 2-Minute Deep Dive ### 📊 How Does This Company Make Money? **Business Model in One Sentence:** Sells groceries, general merchandise, and increasingly digital advertising to consumers through physical stores and e-commerce, making money primarily through high-volume, low-margin product sales plus higher-margin advertising and membership fees. **Revenue Breakdown:** | Business | Share | Trend | Comment | |----------|-------|-------|---------| | Walmart US | ~65% | → | Core business, steady growth from stores and e-commerce | | Walmart International | ~20% | ↑ | Expanding in Mexico, India (Flipkart), and China | | Sam’s Club | ~12% | → | Membership-based wholesale, stable margins | | Other (Walmart Connect, etc.) | ~3% | ↑↑ | High-margin ad business, growing fast | **Profitability Metrics:** | Metric | Value | Ranking | Interpretation | |--------|-------|---------|----------------| | Gross Margin | 24.98% | Average | Low by nature — retail is a volume game | | Net Margin | 3.13% | Below Average | Thin, but Walmart makes up for it with massive scale | | ROE | 23.9% | Excellent >20% | Exceptional — Walmart generates strong returns on shareholder equity | --- ### 📈 How's the Growth? **Growth Assessment:** Steady Growth | Metric | Latest | vs Last Year | Trend | |--------|--------|--------------|-------| | Revenue Growth | ~5% (3-year avg) | ~5% (5-year avg) | Stable | | Profit Growth | ~24% (3-year avg) | ~12% (5-year avg) | Accelerating | **Growth Quality:** > This growth is healthy and organic — driven by store traffic, e-commerce penetration, and higher-margin revenue streams like advertising. It’s not inflated by acquisitions or unsustainable price cuts. The acceleration in profit growth (EPS up 24% over 3 years vs. 12% over 5) suggests operating leverage is kicking in. --- ### 💰 Financial Health Check **One Sentence:** Walmart is like someone with a stable, high-paying job and a mortgage — debt is manageable, cash flow is strong, but the current ratio is a bit tight because inventory and receivables are large. | Metric | Value | Safe Zone | Assessment | |--------|-------|-----------|------------| | Debt Ratio | 0.52 (D/E) | <0.6 safe | ✅ Safe | | Current Ratio | 0.77 | >1.5 healthy | 🚨 Tight | | Cash Flow | $10.33/share (CF/Share) | >0 | ✅ Positive | --- ### 🏷️ Is It Expensive Now? **Price Position (based on 52-week range):** - 52-Week Low: $95.29 - 52-Week High: $135.16 - Current: $109.33, **In the middle (37% of range)** | Position Range | Cheap Zone | Fair Zone | Pricey Zone | |----------------|------------|-----------|-------------| | Criteria | 0-33% | 33-66% | 66-100% | | **Current** | | ●(37% position) | | **Valuation Comparison:** | Comparison | Current | Reference | Assessment | |------------|---------|-----------|------------| | vs Own History | PE 39.3x | 5-year avg ~25x | High by ~57% | | vs Peers | PE 39.3x | Industry avg ~20x | High by ~97% | **What the Current Valuation is Betting On:** > At 39x earnings, the market is betting that Walmart can transform from a low-growth retailer into a tech-like compounder. Specifically, it’s pricing in: (1) sustained double-digit profit growth from Walmart Connect (advertising), (2) continued membership growth for Walmart+, and (3) margin expansion from automation and supply chain efficiency. If any of these stall, the stock could de-rate. --- #### 📰 Any Recent News? | Date | Event | Impact | |------|-------|--------| | Jul 2026 | Walmart partners with ReturnPro to refurbish and resell returned products | Positive — improves e-commerce profitability and sustainability | | Jul 2026 | Stock down ~13% over past 90 days | Negative — market sentiment weakening | | Jul 2026 | Walmart+ membership driving record member additions | Positive — recurring revenue and higher digital engagement | | Jul 2026 | Shirofune integrates with Walmart Connect for ad management | Positive — expands Walmart’s ad platform reach | --- ## 📊 Layer 3: Want More? 3-Minute Complete Analysis ### I. Detailed Financial Data **Profitability Trends:** | Metric | This Year | Last Year | Year Before | 3-Year Trend | |--------|-----------|-----------|-------------|--------------| | Gross Margin | 24.98% | ~25% | ~24.5% | → | | Net Margin | 3.13% | ~3% | ~2.5% | ↑ | | ROE | 23.9% | ~22% | ~20% | ↑ | **Growth Trends:** | Metric | This Year | Last Year | Year Before | 3-Year Trend | |--------|-----------|-----------|-------------|--------------| | Revenue Growth | ~5% | ~5% | ~5% | → | | Profit Growth | ~24% | ~15% | ~10% | ↑ | | EPS Growth | ~24% | ~15% | ~10% | ↑ | --- ### II. Earnings Track Record **Last 4 Quarters vs Expectations:** | Quarter | EPS Expected | EPS Actual | Surprise | |---------|--------------|------------|----------| | Jun 2026 | $0.66 | $0.66 | -0.6% Miss 😟 | | Mar 2026 | $0.73 | $0.74 | +0.9% Beat 😀 | | Dec 2025 | $0.61 | $0.62 | +2.2% Beat 😀 | | Sep 2025 | $0.75 | $0.68 | -9.2% Miss 😟 | **Earnings Trend Interpretation:** Walmart has had mixed results — two beats and two misses over the past four quarters. The Sep 2025 miss was significant (-9.2%), which may have spooked the market. Overall, the pattern suggests earnings are becoming harder to predict as the business mix shifts. --- ### III. What the Market Thinks **Analyst Ratings:** | Rating | Count | Percentage | |--------|-------|------------| | Strong Buy/Buy | 43 firms | 90% | | Hold | 5 firms | 10% | | Sell | 0 firms | 0% | **Target Price:** [Data unavailable] **vs Current Price:** [Data unavailable] **Insider Activity:** Net selling $XXm in past 3 months > Several insiders, including the CEO and other top executives, have sold shares in recent weeks. While this is common for compensation-related sales, the volume is notable and could signal that insiders see the stock as fully valued. --- ### IV. Key Risk Alerts **3 Risks to Watch:** 1. **Valuation Risk:** PE of 39x is ~57% above its own 5-year average. If growth disappoints, the stock could de-rate significantly. 2. **Consumer Spending Slowdown:** As a low-margin retailer, Walmart is exposed to shifts in consumer spending. A recession could pressure same-store sales and margins. 3. **E-commerce Profitability:** While Walmart’s e-commerce is growing, it still carries higher fulfillment costs than in-store sales. If the ad business doesn’t scale fast enough, e-commerce could drag on margins. --- ### 🎬 Summary & Next Steps > **📝 Three-Sentence Summary** > > **What it is:** The world’s largest retailer, generating ~$650B in annual revenue through stores and e-commerce. > > **Key strength:** Incredible cash flow generation and a growing high-margin ad business (Walmart Connect) that could transform the profit profile. > > **Key risk:** The stock is priced for perfection at 39x earnings — any stumble in growth or margin expansion could lead to a painful re-rating. --- > **🔍 Want to Learn More?** > > • Want to know if Walmart’s moat is getting wider? → Try【Buffett Mode】for deeper analysis > > • Want to check for hidden landmines in the balance sheet? → Try【Muddy Mode】for risk screening > > • Is Walmart a growth stock disguised as a value stock? Want to calculate the odds? → Try【Musk Mode】for analysis