Home > Analyses > Consumer Defensive > Walmart Inc.
Walmart shapes how millions shop and save daily, blending physical stores with a growing digital presence. It dominates specialty retail with its vast network of supercenters, Sam’s Club warehouses, and innovative eCommerce platforms. Known for operational efficiency and scale, Walmart drives consumer trends and sets pricing standards worldwide. As competition intensifies and consumer habits evolve, I question whether Walmart’s fundamentals still justify its hefty market valuation and growth prospects.
Table of contents
Business Model & Company Overview
Walmart Inc., founded in 1945 and headquartered in Bentonville, Arkansas, dominates the specialty retail sector with a vast ecosystem spanning supercenters, membership warehouse clubs, and a robust eCommerce presence. Its core mission integrates grocery, consumables, health, apparel, and digital payment services into a seamless consumer experience. This scale supports its position as a global retail powerhouse with 2.1M employees driving operations.
The company’s revenue engine balances physical stores with growing online platforms across the Americas, Asia, and Europe. Walmart generates value through grocery and consumables, private-label merchandise, and financial services, leveraging its broad footprint and digital innovation. Its competitive advantage lies in unparalleled scale and diversified offerings, cementing its role in shaping retail’s future landscape.
Financial Performance & Fundamental Metrics
I analyze Walmart Inc.’s income statement, key financial ratios, and dividend payout policy to uncover its core strengths and risks in 2026.
Income Statement
Below is Walmart Inc.’s income statement summary for the fiscal years 2022 through 2026, reflecting key profitability and expense figures in billions of USD.
| 2022 | 2023 | 2024 | 2025 | 2026 | |
|---|---|---|---|---|---|
| Revenue | 573B | 611B | 648B | 681B | 713B |
| Cost of Revenue | 429B | 464B | 490B | 512B | 535B |
| Operating Expenses | 118B | 127B | 131B | 140B | 148B |
| Gross Profit | 144B | 148B | 158B | 169B | 178B |
| EBITDA | 31B | 30B | 36B | 42B | 44B |
| EBIT | 21B | 19B | 25B | 29B | 30B |
| Interest Expense | 2.0B | 2.1B | 2.7B | 2.7B | 0.4B |
| Net Income | 14B | 12B | 16B | 19B | 22B |
| EPS | 1.63 | 1.43 | 1.92 | 2.42 | 2.74 |
| Filing Date | 2022-02-17 | 2023-02-21 | 2024-03-15 | 2025-03-14 | 2026-02-19 |
Income Statement Evolution
Walmart’s revenue increased steadily from 573B in 2022 to 713B in 2026, a 24.5% rise. Net income surged 60.1% over the same period, reflecting improved net margins from 2.39% to 3.07%. Gross profit growth outpaced revenue, indicating margin expansion, while operating expenses grew in line with revenue, tempering EBIT margin improvements.
Is the Income Statement Favorable?
In 2026, Walmart reported a gross margin of 24.93%, considered favorable, while EBIT and net margins were neutral at 4.18% and 3.07%, respectively. Revenue growth slowed to 4.7%, with operating expenses rising equally, creating slight pressure on operating leverage. However, net income and EPS growth remained strong, signaling generally favorable fundamentals despite some margin compression risks.
Financial Ratios
Below is a summary of Walmart Inc.’s key financial ratios from 2022 to 2026, reflecting profitability, liquidity, leverage, and valuation metrics:
| Ratios | 2022 | 2023 | 2024 | 2025 | 2026 |
|---|---|---|---|---|---|
| Net Margin | 2.39% | 1.91% | 2.39% | 2.85% | 3.07% |
| ROE | 16.42% | 15.23% | 18.50% | 21.36% | 21.98% |
| ROIC | 11.89% | 8.60% | 12.08% | 13.06% | 11.67% |
| P/E | 28.55 | 33.56 | 28.68 | 40.61 | 43.44 |
| P/B | 4.69 | 5.11 | 5.30 | 8.67 | 9.55 |
| Current Ratio | 0.93 | 0.82 | 0.83 | 0.82 | 0.79 |
| Quick Ratio | 0.28 | 0.21 | 0.24 | 0.24 | 0.24 |
| D/E | 0.69 | 0.77 | 0.73 | 0.66 | 0.67 |
| Debt-to-Assets | 23.4% | 24.2% | 24.3% | 23.0% | 23.6% |
| Interest Coverage | 13.01 | 9.60 | 10.07 | 10.76 | 81.05 |
| Asset Turnover | 2.34 | 2.51 | 2.57 | 2.61 | 2.51 |
| Fixed Asset Turnover | 5.09 | 5.13 | 4.97 | 4.87 | 4.54 |
| Dividend Yield | 1.58% | 1.56% | 1.38% | 0.85% | 0.79% |
Evolution of Financial Ratios
Return on Equity (ROE) steadily improved from 15.23% in 2023 to 21.98% in 2026, indicating enhanced profitability. The Current Ratio declined from 0.82 to 0.79, showing a slight weakening in short-term liquidity. Debt-to-Equity Ratio remained relatively stable around 0.67, suggesting consistent leverage management over the period.
Are the Financial Ratios Fovorable?
Profitability ratios like ROE (22%) and ROIC (11.7%) are favorable, exceeding WACC (6.56%), signaling efficient capital use. Liquidity ratios, including Current (0.79) and Quick (0.24), are unfavorable, raising short-term liquidity concerns. Leverage ratios show a neutral Debt-to-Equity (0.67) and favorable debt-to-assets (23.6%). Market multiples, including P/E (43.4) and P/B (9.55), appear stretched, while interest coverage (81.05) and asset turnover (2.51) remain strong. Overall, the ratio profile is slightly favorable but requires monitoring liquidity and valuation risks.
Shareholder Return Policy
Walmart maintains a dividend payout ratio around 34%, with a steady dividend per share growth reaching $0.94 in 2026. The annual dividend yield hovers below 1%, supported by consistent free cash flow coverage and moderate buyback activity, balancing shareholder distributions prudently.
This approach aligns with sustainable value creation, avoiding excessive payouts or repurchases that could strain liquidity. The policy reflects Walmart’s focus on stable returns while preserving capital for strategic investments, supporting long-term shareholder interests amid competitive retail dynamics.
Score analysis
The following radar chart displays Walmart Inc.’s key financial metric scores for a comprehensive evaluation:
Walmart shows a very favorable return on equity (5) and a favorable return on assets (4). Its discounted cash flow score is moderate (3). However, debt to equity (2), price to earnings (1), and price to book (1) scores remain unfavorable to very unfavorable.
Analysis of the company’s bankruptcy risk
Walmart’s Altman Z-Score of 6.5 places it well within the safe zone, indicating a low bankruptcy risk:
Is the company in good financial health?
The Piotroski diagram highlights Walmart’s financial health score, reflecting key profitability and efficiency metrics:
With a Piotroski Score of 6, Walmart’s financial condition is average, suggesting moderate strength but room for improvement in operational efficiency and balance sheet quality.
Competitive Landscape & Sector Positioning
This section examines Walmart Inc.’s strategic positioning, revenue streams, key products, and competitors in the specialty retail sector. I will assess whether Walmart holds a competitive advantage within its industry landscape.
Strategic Positioning
Walmart Inc. maintains a diversified portfolio across retail formats and geographies. Its revenue spans Walmart U.S. (462B in 2025), Walmart International (122B), and Sam’s Club (90B). The U.S. market dominates with 558B in revenue, while international operations contribute 123B, reflecting broad geographic exposure.
Revenue by Segment
This pie chart illustrates Walmart Inc.’s revenue distribution across three segments—Walmart U.S., Walmart International, and Sams Club—for fiscal year 2025.
Walmart U.S. dominates with $462B, showing steady growth over recent years. Walmart International at $122B also expands, reflecting global reach. Sams Club contributes $90B, growing steadily but remains the smallest segment. The business increasingly concentrates on the U.S. market, signaling robust domestic demand but potential geographic concentration risk. Overall, the segments show healthy growth without abrupt shifts in 2025.
Key Products & Brands
The table below outlines Walmart Inc.’s primary products and brands across its key business segments:
| Product | Description |
|---|---|
| Walmart U.S. | Operates supercenters, supermarkets, discount stores, and Walmart Neighborhood Market brands. |
| Walmart International | Manages retail operations and eCommerce platforms including walmart.com.mx, walmart.ca, Flipkart, and PhonePe. |
| Sam’s Club | Membership-only warehouse clubs offering bulk groceries, consumables, electronics, and more. |
| Private Brands | Markets proprietary brands such as Allswell, Athletic Works, Equate, and Free Assembly. |
| Consumer Products | Includes grocery items, health and beauty aids, home and apparel, consumer electronics, and software. |
| Financial Services | Provides payment platforms, money transfers, bill payments, co-branded credit cards, and lending products. |
Walmart’s product mix spans retail formats, eCommerce, private labels, and financial services. This diversified portfolio supports substantial revenue streams across multiple consumer categories and geographic markets.
Main Competitors
This sector includes 10 main competitors, with the table below listing the top 10 leaders by market capitalization:
| Competitor | Market Cap. |
|---|---|
| Amazon.com, Inc. | 2.42T |
| Alibaba Group Holding Limited | 340B |
| PDD Holdings Inc. | 159B |
| MercadoLibre, Inc. | 102B |
| eBay Inc. | 39B |
| Ulta Beauty, Inc. | 28B |
| Tractor Supply Company | 27B |
| Williams-Sonoma, Inc. | 23B |
| Genuine Parts Company | 17B |
| Best Buy Co., Inc. | 15B |
Walmart Inc.’s exact rank is not specified, and its relative market cap to the leader is zero, indicating it is not ranked among these top 10 competitors by market cap. The company is positioned above both the average market cap of the top 10 (317B) and the median market cap in the sector (33.6B). Distance metrics to the nearest competitors above and below are not available, leaving some uncertainty about its precise competitive scale.
Comparisons with competitors
Check out how we compare the company to its competitors:
Does WMT have a competitive advantage?
Walmart Inc. presents a competitive advantage, demonstrated by a ROIC exceeding its WACC by 5.1%, indicating value creation despite a slight decline in profitability. Its scale and diversified retail formats underpin this advantage in the specialty retail sector.
Looking ahead, Walmart’s expansion in eCommerce platforms and financial services offers growth opportunities across domestic and international markets. Continued innovation in digital payments and private brands may enhance its competitive positioning.
SWOT Analysis
This SWOT analysis highlights Walmart Inc.’s core competitive position and challenges to guide strategic decisions.
Strengths
- massive scale with 2.1M employees
- strong brand recognition globally
- diverse revenue streams including eCommerce
Weaknesses
- low current and quick ratios signal liquidity risk
- high P/E and P/B ratios suggest valuation concerns
- declining ROIC trend despite value creation
Opportunities
- expansion in digital payments and financial services
- growth in international markets
- leveraging private brands for margin improvement
Threats
- intense competition in specialty retail
- rising operational costs impacting margins
- economic downturns reducing consumer spending
Walmart’s scale and diversified model create resilience. However, liquidity and valuation metrics warrant caution. Strategic focus on innovation and international growth is critical to offset competitive and economic pressures.
Stock Price Action Analysis
The weekly stock chart of Walmart Inc. (WMT) illustrates price movements and volatility over the last 100 weeks:
Trend Analysis
Over the past two years, Walmart’s stock rose by 104.4%, signaling a bullish trend with clear acceleration. The price ranged from a low of 59.53 to a high of 133.89. Volatility remains moderate, with a standard deviation of 17.15, confirming strong upward momentum.
Volume Analysis
Trading volume has increased, with buyers dominating 61.88% overall. In the recent three months, buyer dominance rose to 73.95%, indicating strong buyer-driven activity. This suggests heightened investor confidence and growing market participation supporting the stock’s bullish trend.
Target Prices
Analysts set a confident target consensus for Walmart Inc., reflecting steady expectations.
| Target Low | Target High | Consensus |
|---|---|---|
| 120 | 150 | 135.73 |
The target range from 120 to 150 indicates moderate upside potential. The consensus at 135.73 suggests analysts expect Walmart to outperform modestly in the coming months.
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Analyst & Consumer Opinions
This section examines Walmart Inc.’s recent analyst ratings and consumer feedback to provide a balanced market perspective.
Stock Grades
The following table presents recent verified analyst grades for Walmart Inc., reflecting current market assessments:
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| Telsey Advisory Group | Maintain | Outperform | 2026-02-20 |
| HSBC | Downgrade | Hold | 2026-02-20 |
| TD Cowen | Maintain | Buy | 2026-02-20 |
| DA Davidson | Maintain | Buy | 2026-02-20 |
| Truist Securities | Maintain | Buy | 2026-02-20 |
| UBS | Maintain | Buy | 2026-02-20 |
| BTIG | Maintain | Buy | 2026-02-20 |
| Bernstein | Maintain | Outperform | 2026-02-20 |
| DA Davidson | Maintain | Buy | 2026-02-18 |
| Keybanc | Maintain | Overweight | 2026-02-13 |
Most analysts maintain a bullish stance, predominantly issuing Buy or Outperform grades. HSBC’s Hold rating stands out as a notable cautious viewpoint amid widespread optimism.
Consumer Opinions
Consumer sentiment around Walmart Inc. reflects a blend of appreciation for value and concerns about service consistency.
| Positive Reviews | Negative Reviews |
|---|---|
| Competitive prices on everyday goods | Long wait times at checkout |
| Wide product selection | Inconsistent stock availability |
| Convenient store locations | Mixed experiences with customer service |
| Efficient online ordering process | Some complaints about store cleanliness |
Overall, consumers praise Walmart for affordability and convenience. However, recurring issues with service speed and inventory gaps temper enthusiasm. These factors could influence customer loyalty if not addressed.
Risk Analysis
The table below summarizes key risks facing Walmart Inc., highlighting probability and potential impact:
| Category | Description | Probability | Impact |
|---|---|---|---|
| Valuation Risk | Elevated P/E (43.44) and P/B (9.55) ratios suggest overvaluation. | High | High |
| Liquidity Risk | Low current ratio (0.79) and quick ratio (0.24) indicate tight liquidity. | Medium | Medium |
| Market Risk | Beta of 0.671 shows lower volatility but exposure to market swings persists. | Medium | Medium |
| Debt Risk | Moderate debt-to-equity (0.67) with favorable debt-to-assets (23.57%). | Low | Low |
| Profitability Risk | Low net margin (3.07%) signals margin pressure despite strong ROE and ROIC. | Medium | Medium |
Valuation risk stands out as most pressing due to Walmart’s stretched multiples relative to the Consumer Defensive sector. Liquidity remains a red flag, with Walmart’s current ratio below 1 signaling potential short-term constraints. Profitability margins are under pressure, despite efficient capital use. I advise caution given these risks amid a turbulent retail environment in 2026.
Should You Buy Walmart Inc.?
Walmart appears to be delivering robust value creation with a slightly favorable moat, as it maintains returns above its cost of capital despite a declining ROIC trend. While the leverage profile shows some pressure, the overall rating suggests a very favorable investment profile.
Strength & Efficiency Pillars
Walmart Inc. demonstrates solid operational efficiency with a return on equity of 21.98% and a return on invested capital (ROIC) of 11.67%. The company is a clear value creator, as its ROIC of 11.67% exceeds the weighted average cost of capital (WACC) at 6.56%. Gross margin remains favorable at 24.93%, supported by stable interest expense of only 0.05%. While net margin is modest at 3.07%, Walmart sustains a strong asset turnover of 2.51, reflecting efficient use of capital.
Weaknesses and Drawbacks
Despite operational strengths, valuation metrics raise concerns. Walmart’s price-to-earnings ratio at 43.44 and price-to-book ratio at 9.55 indicate a premium valuation that may limit upside. Liquidity is a red flag: the current ratio stands at 0.79 and quick ratio at 0.24, both unfavorable, signaling potential short-term liquidity constraints. Debt-to-equity at 0.67 is neutral but coupled with weak liquidity could pressure financial flexibility. Dividend yield is low at 0.79%, which may disappoint income-focused investors.
Our Final Verdict about Walmart Inc.
Walmart’s fundamentals appear attractive for long-term exposure, with a strong value-creating moat and a bullish overall price trend. The recent period shows strong buyer dominance at 73.95%, reinforcing positive momentum. However, the elevated valuation and liquidity concerns suggest caution. Investors might consider a measured approach, as the profile could offer opportunities but may also face short-term volatility.
Disclaimer: This content is for informational purposes only and does not constitute financial, investment, or other professional advice. Investing in financial markets involves a significant risk of loss, and past performance is not indicative of future results.
Additional Resources
- Walmart reports revenue growth of 5.6%, up 4.9% in constant currency (cc) – Business Wire (Feb 19, 2026)
- Walmart earnings beat estimates, but company offers cautious outlook amid ‘somewhat unstable’ backdrop – Yahoo Finance (Feb 19, 2026)
- Walmart (WMT) Is King, Says Jim Cramer – Yahoo Finance (Feb 18, 2026)
- Walmart shares fall 3% as cautious outlook overshadows solid quarterly results – Yahoo Finance (Feb 19, 2026)
- Walmart (WMT) Gets Price Target Boost from Rothschild & Co Redburn on Digital Momentum – Yahoo Finance (Feb 20, 2026)
For more information about Walmart Inc., please visit the official website: corporate.walmart.com
