Walmart offers an unmatched defensive profile paired with aggressive high-margin digital growth engines. As consumer budgets face pressure, this leader consistently captures market share across diverse income demographics due to its everyday low-price positioning and an expansive grocery footprint. This retail volume provides the foundation for higher-margin alternative revenue streams such as digital advertising, marketplace merchant services, and recurring membership fees through exclusive clubs.
Furthermore, the firm’s heavy multi-year capital investments in automated fulfillment centers and AI-driven logistics are driving operating leverage. Operating income is compounding faster than top-line sales, allowing the enterprise to widen its competitive moat against traditional grocers and e-commerce competitors alike while funding steady share repurchases and predictable dividend growth.
The stock trades at 36.8 times the company’s forward earnings forecast. That’s a premium relative to legacy retail competitors. However, we feel it’s justified by the company’s evolving business mix: high-margin digital advertising, e-commerce marketplace fulfillment commissions, and membership revenue are growing far faster than core brick-and-mortar sales.
WALMART INC. (Nasdaq symbol WMT) is the world’s largest retailer, operating 11,000 outlets (as of July 31, 2026) across 19 countries and serving about 280 million customers each week.
The company reported stronger-than-expected sales and earnings for its latest quarter. That’s partly due to gains at its online and advertising businesses. However, signs that consumers are scaling back discretionary spending as they cope with rising gasoline and other costs caused the stock to drop.
In the fiscal 2027 second quarter, ended July 31, 2026, sales rose 5.9%, to $187.94 billion from $177.40 billion a year earlier. That topped the consensus forecast of $186.77 billion.
Walmart’s U.S. same-store sales (including online) rose 2.6%. However, that missed the consensus forecast of 3.5%. That’s partly because new price caps on certain drugs cut revenue at its pharmacies.
In the U.S., the number of transactions rose 1.5% while customers spent 1.1% more per transaction.
The company also continues to see stronger demand at its online division—e-commerce sales in the quarter improved 23%. As well, revenue from selling ads (both in-store and online platforms) jumped 38%.
If you factor out gains and losses on investments and other unusual items, earnings per share rose 19.1%, to $0.81 from $0.68. That beat the $0.74 consensus estimate.
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Walmart’s P/E is high but acceptable
Walmart continues to scale Walmart Connect and Sam’s Club Member Access Platform, while expanding high-margin marketplace services and leveraging supply chain tariff adjustments and artificial intelligence tools for inventory forecasting and customer personalization.
Meanwhile, Walmart plans to use the refunds it received after the U.S. Supreme Court reversed the Trump administration’s tariffs to keep prices down. As a result, it now expects sales (excluding businesses it recently sold and currency rate fluctuations) for all fiscal 2027 will rise 4.0% to 5.0%. That’s up from its earlier forecast of 3.5% to 4.5% growth.
The company also raised its full-year earnings forecast to between $2.80 and $2.87 a share from its earlier prediction of $2.75 to $2.85 a share. The stock trades at 36.8 times the midpoint of that new range. That’s a high p/e, but still acceptable considering Walmart’s dominant market share and fast-growing online and advertising businesses. The $0.99 dividend yields 1.0%.
Recommendation in Wall Street Stock Forecaster: Walmart Inc. is a buy.
