Walmart Stock Has Pulled Back. Is It Time to Buy?

Core Viewpoint - Walmart's stock has experienced a significant decline from its all-time high, raising questions about its valuation and future growth potential [1][2][9]. Financial Performance - Walmart reported total revenue of $648.1 billion for fiscal 2025, reflecting a year-over-year increase of 5.6$0.66, up from $0.60 in the previous year [5]. Profitability and Growth Outlook - Operating income increased by 8.3%, or 9.4% when adjusted for currency fluctuations [5]. - For fiscal 2026, management anticipates net sales growth of 3% to 4% and adjusted operating income growth of 3.5% to 5.5%, indicating a slowdown from previous growth rates [6]. Market and Economic Conditions - Broader macroeconomic factors such as higher interest rates, inflation, and consumer spending concerns may impact Walmart's growth [7]. - The company is positioned to benefit from its value-based retail model during economic downturns, but potential new tariffs could affect costs and margins [7][8]. Valuation Concerns - Despite a recent stock price decline, Walmart's shares still trade at a price-to-earnings multiple of 35, which is significantly higher than the S&P 500's multiple of about 22 [9]. - Current valuation, combined with cautious financial guidance and macroeconomic challenges, suggests that this may not be an optimal entry point for investors [10].