Is Walmart a Buy Sell or Hold Amid Economic Uncertainty

Walmart's financial health is a mixed bag, with a debt-to-equity ratio of 0.83, which is higher than the industry average of 0.63. This could be a concern for investors.

The company's revenue has been steadily increasing, with a 4.2% growth in the last quarter, driven by its e-commerce business and strong grocery sales. This growth is a positive sign.

However, Walmart's operating margins have been declining, from 3.4% in 2019 to 3.1% in 2020. This could indicate that the company is investing in new initiatives and technologies, but also facing increased competition.

Despite these challenges, Walmart's cash flow is strong, with a free cash flow of $14.4 billion in 2020, which is a significant improvement from the previous year's $10.3 billion.

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Walmart has a wide economic moat, underpinned by its cost advantage and a ubiquitous brand associated with low prices in its domestic market. This has allowed the company to carve out an enviable position in the US retail landscape.

The company's massive store footprint of over 4,600 domestic namesake locations serves as a strategic asset, giving it a strong presence in US communities. This entrenchment lets Walmart serve customers through multiple channels.

In the last year, 23 stock analysts published opinions about Walmart, with 14 recommending to BUY the stock and 7 recommending to SELL the stock.

Walmart has a wide economic moat due to its cost advantage and ubiquitous brand associated with low prices in its domestic market.

The company is the largest retailer in the United States, with over $440 billion in annual sales.

Walmart has a massive store footprint of over 4,600 domestic namesake locations, giving it a strong presence in US communities.

This proximity to the vast majority of US consumers allows Walmart to serve customers through multiple channels.

Its unmatched scale enables Walmart to spread its omnichannel and distribution investments over a wider sales and profit base, making it more adaptable to the dynamic retail environment.

Despite the fragmented and competitive retail landscape, Walmart has carved out an enviable position, benefiting from its strategic assets.

When analyzing a company's performance, it's essential to understand its fundamentals compared to its peers. Walmart's fundamentals show a stark contrast to its peers.

Walmart's Return On Equity (ROE) is 0.23, significantly higher than the peer average of -0.31. This indicates that Walmart is generating more profits from its shareholders' equity.

Walmart's Return On Asset (ROA) is 0.0695, also higher than the peer average of -0.14. This suggests that Walmart is utilizing its assets more efficiently.

Walmart's Profit Margin is 0.03%, which is lower than the peer average of -1.27%. This indicates that Walmart is not generating as much profit from its sales as its peers.

Walmart's Operating Margin is 0.04%, which is also lower than the peer average of -5.51%. This suggests that Walmart is not generating as much profit from its operations as its peers.

Here's a comparison of Walmart's fundamentals with its peers:

Walmart's Current Valuation is 887.49 billion, significantly higher than the peer average of 16.62 billion. This indicates that Walmart is more valuable than its peers.

Walmart's Shares Outstanding is 8.03 billion, which is much higher than the peer average of 571.82 million. This suggests that Walmart has a larger market capitalization than its peers.

Walmart's Shares Owned By Insiders is 46.02%, which is higher than the peer average of 10.09%. This indicates that Walmart's insiders have a significant stake in the company.

Walmart's Shares Owned By Institutions is 35.73%, which is lower than the peer average of 39.21%. This suggests that institutions have a lower stake in Walmart compared to its peers.

Walmart's Number Of Shares Shorted is 36.29 million, which is higher than the peer average of 4.71 million. This indicates that there is more short selling activity in Walmart compared to its peers.

Walmart's Price To Earning is 47.07 X, which is higher than the peer average of 28.72 X. This suggests that Walmart's stock is more expensive compared to its peers.

Walmart's Price To Book is 9.49 X, which is similar to the peer average of 9.51 X. This indicates that Walmart's stock is valued similarly to its peers.

Walmart's Price To Sales is 1.24 X, which is lower than the peer average of 11.42 X. This suggests that Walmart's stock is less expensive compared to its peers.

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Walmart's Revenue is 648.12 billion, which is much higher than the peer average of 9.43 billion. This indicates that Walmart generates more revenue than its peers.

Walmart's Gross Profit is 166.41 billion, which is also higher than the peer average of 27.38 billion. This suggests that Walmart generates more gross profit than its peers.

Walmart's EBITDA is 38.87 billion, which is higher than the peer average of 3.9 billion. This indicates that Walmart generates more EBITDA than its peers.

Walmart's Net Income is 15.51 billion, which is higher than the peer average of 570.98 million. This suggests that Walmart generates more net income than its peers.

Walmart's Cash And Equivalents is 8.88 billion, which is higher than the peer average of 2.7 billion. This indicates that Walmart has more cash and equivalents than its peers.

Walmart's Cash Per Share is 4.27, which is lower than the peer average of 5.01. This suggests that Walmart's cash per share is less than its peers.

Walmart's Total Debt is 60.44 billion, which is higher than the peer average of 5.32 billion. This indicates that Walmart has more debt than its peers.

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Walmart's Debt To Equity is 0.81%, which is lower than the peer average of 48.70%. This suggests that Walmart has a lower debt-to-equity ratio than its peers.

Walmart's Current Ratio is 0.87, which is lower than the peer average of 2.16. This indicates that Walmart has a lower current ratio than its peers.

Walmart's Book Value Per Share is 10.97, which is higher than the peer average of 1.93. This suggests that Walmart's book value per share is higher than its peers.

Walmart's Cash Flow From Operations is 35.73 billion, which is higher than the peer average of 971.22 million. This indicates that Walmart generates more cash flow from operations than its peers.

Walmart's Short Ratio is 2.43, which is lower than the peer average of 4.00. This suggests that Walmart has a lower short ratio than its peers.

Walmart's Earnings Per Share is 2.42, which is higher than the peer average of 3.12. This indicates that Walmart generates more earnings per share than its peers.

Walmart's Price To Earnings To Growth is 3.13, which is lower than the peer average of 4.89. This suggests that Walmart's price-to-earnings-to-growth ratio is lower than its peers.

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Walmart's Target Price is 105.64, which is higher than the peer average of 0. This indicates that Walmart's target price is higher than its peers.

Walmart's Number Of Employees is 2.1 million, which is much higher than the peer average of 18.84 thousand. This suggests that Walmart has a much larger workforce than its peers.

Walmart's Beta is 0.55, which is lower than the peer average of -0.15. This indicates that Walmart's stock is less volatile than its peers.

Walmart's Market Capitalization is 835.79 billion, which is higher than the peer average of 19.03 billion. This suggests that Walmart has a larger market capitalization than its peers.

Walmart's Total Asset is 252.4 billion, which is higher than the peer average of 29.47 billion. This indicates that Walmart has more total assets than its peers.

Walmart's Retained Earnings is 89.81 billion, which is higher than the peer average of 9.33 billion. This suggests that Walmart has more retained earnings than its peers.

Walmart's Working Capital is -15.54 billion, which is lower than the peer average of 1.48 billion. This indicates that Walmart has less working capital than its peers.

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Walmart's financial performance has been a mixed bag in recent years. Free cash flow has been a bright spot, with the company generating $25.8 billion in 2020, $11.1 billion in 2021, and $12.2 billion in 2022.

However, capital expenditures have been on the rise, increasing from $10.3 billion in 2020 to $24.9 billion in 2025 (projected). This could be a concern for investors, as it may impact the company's ability to generate cash flow in the future.

Depreciation has also been a significant expense for Walmart, with the company reporting $11.2 billion in 2020 and $14.3 billion in 2025 (projected). This is a normal part of the business, but it's still worth noting.

Here are some key financial metrics for Walmart:

Walmart's net income has also been affected by various factors, including a significant decline in 2022 to $11.3 billion. This could be a concern for investors, as it may impact the company's ability to generate profits in the future.

Investments have been another area of focus for Walmart, with the company reporting $-10.1 billion in 2020 and $-18.2 billion in 2025 (projected). This could be a sign of the company's efforts to expand its business and improve its financial performance.

Overall, Walmart's financial performance has been a mixed bag in recent years. While the company has generated significant free cash flow and invested heavily in its business, it has also faced challenges such as rising capital expenditures and declining net income.

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Walmart faces a significant threat from the rise in e-commerce, which could erode its traditional brick-and-mortar retail model. This threat is particularly pronounced for sales of general merchandise like electronics, apparel, and home decor.

Walmart's grocery sales, which account for 60% of its domestic sales, are somewhat insulated from online penetration. However, this also means that margin pressure could ensue if the company's mix shifts towards merchandise sales, which typically carry higher margins.

Amazon's expansion into grocery sales, beyond Whole Foods and Amazon Fresh, is a potential concern for Walmart. While Amazon's lack of physical storefronts currently limits this threat, it's still worth monitoring the competition from the corporate giant.

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Walmart faces a formidable threat from the rise in e-commerce, which could challenge its traditional brick-and-mortar retail model.

The company's sales are underpinned by grocery items, which make up 60% of domestic sales and tend to be more insulated from online penetration.

However, Walmart also faces tough online competition for sales of general merchandise such as electronics, apparel, and home decor, which is unlikely to abate anytime soon.

Margin pressure could ensue if merchandise sales become a larger part of Walmart's mix, given the higher margins those sales typically carry.

Amazon.com has entertained expanding its physical presence in grocery beyond Whole Foods and Amazon Fresh, although this threat is viewed as low due to Amazon's lack of physical storefronts.

The threat from Amazon is worth monitoring, especially considering the company's corporate behemoth status.

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Walmart is America's largest retailer, with stores located within a short drive of roughly 90% of the country's population.

Its massive size and bargaining power allow Walmart to keep prices low, making it a go-to destination for shoppers.

Walmart has expanded to other retail categories, including big-box and e-commerce, through its Sam's Club and online platforms.

The company has paid and raised its dividend for 51 consecutive years, demonstrating its financial stability.

Walmart's balance sheet is considered fortress-like, providing a strong foundation for the business.

Analysts expect Walmart to continue growing for years, but estimates call for long-term earnings growth averaging just over 7%.

This growth rate may not justify the current valuation of Walmart's stock, which trades at a forward P/E of 28.

Walmart's strong market share and ability to gain further market share is a significant advantage. They've been outpacing the S&P since late 2021, with a lofty valuation of 38x forward PE, but a PEG ratio close to 4x.

Their grocery component helps insulate them from online competition, and their private label products are a major draw for consumers looking for value. These products keep prices down, including consumer brands.

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Walmart's profitability is solid, but margins are thin, with half of their business coming from grocery sales, which have historically narrow margins of 2-3%. Management has done a good job pivoting to online sales and adding advertising to their platform.

Here are some key points to consider:

Walmart has been doing a great job of adapting to the changing retail landscape, and their strong eCommerce business is a major advantage. They're also generating cash flow and increasing revenues.

When it comes to making investment decisions about Walmart, it's essential to consider the opinions of stock analysts. 23 stock analysts have published opinions about WMT-N in the last year.

Most of these analysts have a positive outlook on Walmart, with 14 out of 23 recommending to BUY the stock. This suggests that many experts believe Walmart is a good investment opportunity.

A smaller number of analysts, 7 out of 23, have recommended to SELL the stock, indicating some concerns about Walmart's performance.

When considering Walmart Inc as an investment opportunity, it's essential to weigh the pros and cons. 23 stock analysts on Stockchase covered Walmart Inc in the last year, with 14 recommending a BUY and 7 suggesting a SELL.

The latest stock analyst recommendation is not specified, but it's worth noting that experts have mixed opinions about Walmart's valuation. The company's forward PE ratio is 38x, and its PEG ratio is nearly 4x, which raises concerns about future growth potential.

Walmart has reported strong performance metrics, but its high dependence on grocery sales, which yield thin margins of 2-3%, poses a risk given the current economic climate. Recent innovations in e-commerce and advertising revenue streams, including the Walmart+ membership, are commended, indicating a positive direction for revenue generation.

Here's a summary of the key points to consider when making a market decision about Walmart Inc:

Walmart's debt-to-equity ratio is 0.81, which is considered acceptable given its current industry classification. However, the company's current ratio is 0.85, suggesting that it may not have enough short-term capital to pay financial commitments when payables are due.

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A market order is a type of order that allows you to buy or sell a security at the current market price, as seen in the "Understanding Order Types" section.

You can also use a limit order to buy or sell a security at a specific price, as discussed in the "Setting a Budget" section.

This can be especially useful if you're looking to buy a stock at a certain price or sell one at a higher price.

A stop-loss order, on the other hand, allows you to limit your potential losses if the market moves against you, as explained in the "Managing Risk" section.

For example, if you buy a stock and it starts to drop in value, a stop-loss order can automatically sell the stock at a predetermined price to limit your losses.

By understanding these different types of orders, you can make more informed investment decisions and execute trades that align with your goals.

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