Walmart Inc. (WMT) stock analysis

P/E above its 5-year median

Walmart's P/E of 45.4 is above its own 5-year median of 38.3.

P/E above the industry

Walmart's P/E of 45.4 is above the Variety Stores median of 22.5.

EV/EBITDA above its 5-year median

Walmart's EV/EBITDA of 22.0 is above its 5-year median of 14.7.

P/B above the industry

Walmart's price-to-book of 10.15 is above the Variety Stores median of 5.57.

Trading above fair value

The share price of $125.67 is above our fair value estimate of $74.43.

Margin of safety under 20%

The price is 68.8% above fair value, so there is no margin of safety.

Revenue growing under 10% a year

Revenue grew 5.3% a year over the last three fiscal years, short of the 10% we look for.

EPS growing 10%+ a year

Diluted EPS grew 24.3% a year over the last three fiscal years.

Earnings growth not accelerating

Net income grew 3.4% over the last twelve months, against a 5-year average of 10.1% a year.

Growing slower than the industry

Revenue grew 6.2% over the last twelve months; the Variety Stores median is 9.6%.

Guidance raised

Walmart raised its fiscal year 2026 adjusted operating income outlook on Nov 20, 2025.

Gross margin improving

Gross margin was 25.2% over the last twelve months, against 24.9% a year earlier.

Return on equity over 15%

Return on equity was 23.4% over the last twelve months and averaged 19.2% over five years.

Return on capital over 10%

Return on invested capital was 19.0%, above the 10% that usually covers the cost of capital.

Return on equity below the industry

Walmart's return on equity of 23.4% is below the Variety Stores median of 24.9%.

Earnings grew over 5 years

Net income grew 10.1% a year on average over the last five fiscal years.

Net margin above its 5-year average

Net margin was 3.0% over the last twelve months, against a 5-year average of 2.5%.

Net margin below the industry

Walmart's net margin of 3.0% is below the Variety Stores median of 4.0%.

High debt

Debt is 51.3% of shareholders' equity, above the 40% we consider low.

Debt falling against equity

Debt to equity fell from 55.0% five years ago to 51.3%.

Debt covered by cash flow

Operating cash flow over the last twelve months equals 85.1% of total debt.

Interest well covered

Operating income covers interest expense 17.4 times.

Short-term assets don't cover short-term debts

Current assets are 0.77 times current liabilities.

Low bankruptcy risk

The Altman Z-score is 6.41; above 3 is the safe zone and below 1.8 the distress zone.

Pays a dividend

Walmart paid dividends worth 0.8% of the share price over the last twelve months.

Yield below Treasuries

The 0.8% yield is below the 4.4% on a 1-year Treasury.

Yield below the top quarter

The top quarter of US dividend payers yield 3.8% or more; Walmart yields 0.8%.

Dividend not cut

The dividend per share has not fallen by more than 10% in any of the last 10 fiscal years.

Covered by earnings

Dividends take 34.9% of net income.

Covered by free cash flow

Dividends take 57.0% of free cash flow.