Walmart(US:WMT) The Motley Fool·2024-07-09 00:00Core Viewpoint - Walmart has the potential to reach a market valuation of $1 trillion by 2030, requiring a 79% gain from its current market value of approximately $560 billion, although achieving this growth may be challenging for a mature company [1][2] Group 1: Financial Performance - Walmart reported nearly $650 billion in consolidated revenue for fiscal 2024, with a market value of around $560 billion [1] - The company's net income has only doubled over the last 20 years, indicating low-margin retail sales [2] - Walmart's earnings per share (EPS) have grown more than net income due to share repurchases, but profitable growth has been difficult to achieve [2] Group 2: E-commerce Growth - Walmart's e-commerce sales exceeded $100 billion in fiscal 2024, growing by 23% [3] - The company has the opportunity to leverage its scale into high-margin areas such as digital advertising and third-party sales [3] Group 3: Digital Advertising and Third-Party Sales - Walmart's advertising business grew by 24% in the most recent quarter, likely approaching $1 billion in quarterly ad revenue [4] - The number of independent sellers on Walmart's e-commerce platform increased by 50% year over year in fiscal Q1 2025, enhancing product offerings and potential profits from commissions and advertising [5] Group 4: Future Profit Expectations - To reach a $1 trillion valuation, Walmart's profits would need to increase by about 80% over the next six years, requiring an additional $15 billion in annual profit [6] - Walmart's current expectation for operating profit growth is around 6% for the year, which is below the necessary growth rate to achieve the $1 trillion target [7] - Despite the challenges, the growth of Walmart's digital business presents opportunities for stronger profit growth in the future [7]