WMT Stock Risk & Deep Value Analysis
Walmart Inc
DVR Score
out of 10
What You Need to Know About WMT Stock
We analyzed Walmart Inc using our deep value framework. Sign in to see our full verdict and DVR Score.
We ran WMT through our deep value framework — analyzing financial health, distress signals, competitive moat, and risk factors. Our risk assessment: Moderate. Here's what we found.
WMT Risk Analysis & Red Flags
What Could Go Wrong
Walmart's current valuation with a trailing P/E of ~47.4 is stretched for a company growing revenue at 5-6%. Any slowdown in this modest growth or increased pressure on the company's already thin retail margins could lead to significant multiple contraction, potentially causing a 10-20% stock price decline.
Risk Matrix
Overall
Moderate
Financial
Medium
Market
Low
Competitive
Medium
Execution
Low
Regulatory
Low
Red Flags
- ⚠
Trailing P/E of ~47.4 for mid-single-digit revenue growth is a significant valuation concern.
- ⚠
Heavy capital expenditure is pressuring Free Cash Flow, with a noted declining trend.
- ⚠
Current ratio (0.79) and quick ratio (0.24) are tight, indicating potential short-term liquidity stress, although common for lean retail operations.
- ⚠
Director C. Douglas McMillon (former CEO) sold $2.39 million worth of shares in March 2026.
Upcoming Risk Events
- 📅
Potential global economic slowdown impacting consumer spending
- 📅
Increased competitive pressure from Amazon, Target, and regional players
When to Reconsider
- 🚪
Exit if quarterly global e-commerce growth consistently drops below 15% YoY.
- 🚪
Sell if the company's P/E multiple contracts below 30x without a clear path to accelerated earnings growth.
- 🚪
Re-evaluate position if Free Cash Flow turns negative for two consecutive quarters, signaling unsustainable capital allocation.
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Investment Thesis
Walmart represents a foundational investment in the global retail sector, leveraging its formidable scale, integrated omnichannel strategy, and increasing technological investments (AI, automation) to deliver consistent, modest growth and strong defensive characteristics. It's a reliable performer that tends to outperform in stable markets and offer resilience during downturns, making it suitable for long-term capital preservation and incremental returns.
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WMT Price Targets & Strategy
12-Month Target
$140.00
Bull Case
$150.00
Bear Case
$120.00
Valuation Basis
50x forward P/E applied to the midpoint of FY2027 estimated EPS guidance of $2.80
Entry Strategy
Dollar-cost average on dips towards $125-$128, which could represent near-term support following recent consolidation.
Exit Strategy
Take profit above $145 if strong momentum continues; consider re-evaluating if price falls below $120, breaching key support levels.
Portfolio Allocation
2-4% for conservative to moderate risk tolerance, given its defensive nature and stability.
Price Targets & Strategy
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Is WMT Financially Healthy?
Valuation
P/E Ratio
47.41
EV/EBITDA
23.37
Price/Sales
1.44
Profitability
Gross Margin
24.93%
Operating Margin
4.18%
Net Margin
3.07%
Return on Equity
23.69%
Revenue Growth
4.73%
EPS
$2.73
Balance Sheet
Current Ratio
0.79
Quick Ratio
0.20
Debt/Equity
0.52
Cash Flow
Operating Cash Flow
$41.60B
Other
Beta (Volatility)
0.65
Dividend Yield
0.79%
Does WMT Have a Competitive Moat?
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🏰 Wide
Moat Trend
Stable
Moat Sources
4 Identified
Walmart's moat is exceptionally durable due to its immense global scale, which provides significant cost advantages in sourcing and distribution. Its powerful brand, vast physical store network, and continuous investment in supply chain technology and data analytics create formidable barriers to entry and make it incredibly difficult for competitors to replicate its operational efficiency and reach.
Moat Erosion Risks
- •Failure to keep pace with rapid digital innovation and evolving consumer preferences from pure-play e-commerce rivals like Amazon.
- •Significant increases in labor costs or supply chain disruptions that erode its cost advantage.
- •Intensified regulatory scrutiny or anti-trust actions due to its market dominance.
WMT Competitive Moat Analysis
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WMT Market Intelligence
Sentiment & Insider Activity
Social Sentiment
Neutral (Walmart is a stable blue-chip, not typically a high-momentum social media stock, with generally consistent retail investor interest).
Institutional Sentiment
Positive (Strong Buy consensus from 30 out of 38 analysts, with recent target raises, and outperformance against broader indices).
Insider Activity (Form 4)
Director C. Douglas McMillon (former CEO) sold 19,416 shares on March 26, 2026, at $123.16/share, totaling $2.39 million. No insider buys reported in the last 90 days.
Options Flow
Normal options activity (no unusual options activity reported in the provided research).
Earnings Intelligence
Next Earnings
2027-05-21
Surprise Probability
Medium
Historical Earnings Pattern
Walmart typically experiences measured stock price movements around earnings, often reacting positively to beats and strong guidance, reflecting its stable, defensive nature.
Key Metrics to Watch
Competitive Position
Top Competitor
Amazon (AMZN)
Market Share Trend
Stable/Gaining (Walmart is effectively defending and slightly expanding its market share through strong omnichannel execution and e-commerce growth, particularly challenging Amazon in same-day delivery).
Valuation vs Peers
Walmart is trading at a premium to many diversified retail peers on a P/E basis (P/E ~47.4) when compared to its growth rate, reflecting its market dominance and defensive characteristics. Costco often trades at a comparable premium due to its membership model and consistent growth.
Competitive Advantages
- •Unparalleled scale and purchasing power providing significant cost advantages
- •Extensive global physical footprint acting as a strategic advantage for omnichannel fulfillment
- •Strong brand recognition and customer loyalty built over decades
- •Robust and efficient supply chain and logistics network
Market Intelligence
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What Could Drive WMT Stock Higher?
Near-Term (0-6 months)
- •Q1 FY2027 Earnings Report (expected May 21, 2027)
- •Continued strong global eCommerce growth rates
Medium-Term (6-18 months)
- •Expansion of Upstream Facility Services into new markets (B2B maintenance)
- •Further integration and impact of AI investments in supply chain and customer experience
Long-Term (18+ months)
- •Continued global retail market share gains through omnichannel strategies
- •Deepening competitive advantage against Amazon in last-mile delivery
Catalysts & Growth Drivers
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What's the Bull Case for WMT?
- ✓
Sustained acceleration in global e-commerce revenue growth rates beyond current levels.
- ✓
Demonstrable improvements in net margins and Free Cash Flow generation through efficiency gains and strategic initiatives.
- ✓
Continued outperformance against the S&P 500 and consumer staples sector ETFs.
Bull Case Analysis
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How Walmart Inc Makes Money
Walmart Inc. operates as a multinational retail corporation, generating revenue by selling a vast array of products including general merchandise, groceries, and health & wellness items through its extensive global network of hypermarkets, discount department stores, and membership-based warehouse clubs (Sam's Club). Its business model is built on offering competitive everyday low prices, achieved through immense purchasing power, an ultra-efficient supply chain, and a growing omnichannel presence that integrates its physical stores with its rapidly expanding e-commerce platform.
Read Full Business Model BreakdownFAQ
What is the DVR Score for Walmart Inc (WMT)?
As of April 25, 2026, Walmart Inc has a DVR Score of 0.7 out of 10, placing it in the "Distressed" category. This score is generated by our AI-powered deep value analysis framework that evaluates growth potential, financial health, competitive moat, and risk factors.
What is the market capitalization of Walmart Inc?
Walmart Inc's market capitalization is approximately $1.0T..
What is the risk level for WMT stock?
Our analysis rates Walmart Inc's overall risk as Moderate. This assessment considers execution risk, market risk, financial risk, competitive risk, and regulatory risk. For a full breakdown, see the risk analysis section above.
What is the P/E ratio of WMT?
Walmart Inc currently has a price-to-earnings (P/E) ratio of 47.4. This is above the market average, suggesting the stock may be priced for high growth expectations.
Does Walmart Inc pay a dividend?
Yes, Walmart Inc pays a dividend with a current yield of approximately 0.79%.
Is Walmart Inc's revenue growing?
Walmart Inc has reported revenue growth of 4.7%. The company is growing at a moderate pace.
Is WMT stock profitable?
Walmart Inc has a profit margin of 3.1%. The company is profitable but margins are modest.
How often is the WMT DVR analysis updated?
Our AI-powered analysis of Walmart Inc is refreshed regularly to incorporate the latest financial data, market conditions, and news. The most recent update was on April 25, 2026.
Important Disclaimer – Not Financial Advice
Deep Value Reports is an independent research platform for educational and informational purposes only. We are not financial advisors, investment advisors, or licensed professionals. The analysis, scores, and information provided on this page for WMT (Walmart Inc) should not be construed as personalized investment advice, a recommendation to buy or sell any security, or an offer to provide investment advisory services.
All investments involve risk, including the potential loss of principal. Past performance does not guarantee future results. Always conduct your own research, consider your financial situation, and consult with a qualified financial advisor before making any investment decisions.