Walmart Inc. (WMT): A Bull Case Theory

Core Thesis - Walmart Inc. is positioned as a strong investment opportunity due to its dual business model, combining traditional retail with high-growth digital segments, which could lead to substantial upside as the market recognizes its value [5]. Financial Performance - As of September 25th, Walmart's share price was $103.05, with trailing and forward P/E ratios of 38.89 and 39.53 respectively [1]. - The company has achieved steady revenue growth of approximately 3.5% annually over the past 15 years, with earnings per share (EPS) growing at about 5%, primarily driven by share buybacks [2]. - Walmart operates on low net margins of 2.5–3% but has a strong dividend history, increasing payouts for 53 consecutive years, supported by a well-covered payout ratio [2]. Growth Segments - Walmart's e-commerce platform has seen significant growth, achieving 25% global growth in Q2, leveraging over 4,600 U.S. stores as distribution hubs [3]. - The Walmart Marketplace, a third-party selling platform, and the Walmart+ membership program grew by 17% and 15% respectively, enhancing customer engagement [4]. - Walmart Connect, the advertising business, is scaling rapidly with a 46% growth rate, generating high-margin revenue from data insights [4]. Business Transformation - The combination of traditional retail operations and high-margin digital ecosystems is reshaping Walmart's business model, positioning it for future growth [5]. - The evolution into a dual business model offers investors resilient cash flow, a strong dividend history, and exposure to accelerating digital businesses [5].