Wall Street Thinks Walmart Stock Is a Buy. Here's Why I Don't.

Core Viewpoint - Walmart's stock has seen significant gains despite only marginal improvements in its financial performance, raising questions about its valuation and growth potential [2][11]. Company Performance - Walmart has successfully revived its business by leveraging technology to enhance its e-commerce presence and improve supply chain efficiency [4]. - The company has adapted its product offerings to meet local needs in international markets, focusing on e-commerce growth in regions like Mexico, China, and India [4]. - Over the last five years, Walmart's stock has increased by nearly 170%, outperforming the S&P 500 [5]. Financial Metrics - In the first nine months of 2025, Walmart reported revenue of almost $573 billion, reflecting a growth rate of 4% [7]. - The net income for the same period was just under $18 billion, up nearly 25% year-over-year, primarily driven by gains in equity investments [8]. - Operating income fell by 2% when accounting for increased selling, general, and administrative expenses [8]. Valuation Concerns - Walmart's price-to-earnings (P/E) ratio is currently at 45, significantly higher than the S&P 500 average of 30, making it more expensive than Amazon, which has a P/E of 30 [9]. - The premium valuation raises concerns about whether Walmart's stock is justified given its slow growth and financial challenges [9][11]. Investment Outlook - Despite Walmart's strong position in retail and advancements in e-commerce and AI, the stock may not be a good buy due to its premium valuation and lackluster growth [10][11].