Best Stock to Buy Right Now: Shopify vs. Walmart

Core Viewpoint - Shopify and Walmart are now competing for the same customers, with both companies focusing on digital sales channels, making it essential to evaluate which stock is a better buy today [1] Group 1: Walmart's Transformation - Walmart has shifted its strategy to embrace digital sales, investing hundreds of millions into automated shipping and fulfillment centers to compete with online retailers like Amazon [3] - The company's revenue growth rates have rebounded, with net sales increasing by 3.4% last quarter, driven by a 17% rise in e-commerce sales [3] - Walmart operates 10,623 stores, which is over 1,000 fewer than in 2018, indicating a shift from physical expansion to enhancing digital capabilities [2] Group 2: Shopify's Growth - Shopify has maintained a strong focus on e-commerce from its inception, offering a platform that allows merchants to sell online easily, which has led to sales growth exceeding 20% annually [4] - The company commands a 28% share of the U.S. e-commerce platform market, providing a significant growth runway for the future [7] Group 3: Valuation Comparison - Shopify's stock trades at a premium, with a price-to-sales ratio of 14 times, while Walmart trades at just 0.75 times sales [6] - In terms of free cash flow yield, Shopify stands at 0.9%, compared to Walmart's 3.1%, indicating a difference in cash flow generation [6] - Shopify's earnings multiple is significantly higher at 870 times earnings, while Walmart's is 31 times earnings, reflecting the contrasting growth profiles of the two companies [6] Group 4: Investment Considerations - Shopify is seen as a high-growth investment with potential long-term upside, suitable for investors willing to take on more risk [7] - Walmart is viewed as a more conservative investment with stable cash flow and profits, appealing to investors looking for lower risk [7]