Walmart has successfully leveraged its massive scale and logistics network to create an unbeatable value proposition for consumers while simultaneously building higher-margin digital businesses. The company’s e-commerce growth of 25% globally, combined with its expanding advertising platform generating 46% revenue growth, demonstrates successful diversification beyond traditional retail.
What’s more, strategic investments and partnerships in automation and AI position the firm to maintain cost leadership while improving service quality. This creates sustainable competitive advantages that competitors struggle to match.
The company has increased its dividend for 52 consecutive years, reflecting management’s confidence in sustained business performance. The combination of strong operational metrics, market share gains across all segments, and disciplined capital allocation creates a compelling investment profile for both growth and income-focused investors.
The stock trades at 40.6 times the company’s forward earnings forecast. While this elevated valuation appears concerning, our comprehensive analysis reveals multiple factors that justify this premium positioning. This firm remains a strong buy for the long run.
WALMART INC. (New York symbol WMT; www.walmart.com) is the world’s biggest retailer, with 10,797 outlets in 19 countries.
Walmart’s U.S. operations supplied 69% of total sales in the latest fiscal year, followed by international stores (18%) and the Sam’s Club warehouse stores (13%)
In August 2024, the company sold its 9.4% stake in Chinese e-commerce retailer JD.com for $3.6 billion. The cash helped fund its $1.9 billion acquisition of Vizio Holding Corp. (New York symbol VZIO). That firm makes TV sets and soundbars.
Walmart is mainly interested in Vizio’s SmartCast Operating System, which streams ad-supported content on its devices to 19 million subscribers.
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Studying the viewing and purchasing habits of those users will help Walmart create ads that better appeal to those users and prompt more purchases. Improving the effectiveness of these ads will also help draw more advertisers to this system.
The company also continues to expand its e-commerce operations, which benefit from its large network of stores and fulfillment centres. It can now deliver packages to 93% of U.S. households on the same day and aims to expand that to 95% by the end of 2025.
Walmart has a number of strategies to offset tariffs
Walmart reported lower-than-expected earnings for its latest quarter. That’s due to the impact of tariffs on goods it imports from overseas (about a third of its U.S. sales) and rising operating costs such as employee wages. However, the company raised its full-year outlook.
In the fiscal 2026 second quarter, ended July 31, 2025, sales rose 4.8%, to $177.40 billion from $169.35 billion a year earlier. That topped the consensus forecast of $176.2 billion.
Thanks to stronger demand for groceries, health and beauty products, and general merchandise, Walmart’s U.S. same-store sales (including online) rose 4.6%. That was due to a higher number of transactions (up 1.5%) and higher spending per transaction (up 3.1%). As well, global online sales improved 25%, partly due to strong demand for home delivery and in-store pickup services. Advertising revenue also jumped 31% following the recent acquisition of TV-set maker Vizio and its advertising platform.
If you factor out gains and losses on investments and other unusual items, earnings per share rose 1.5%, to $0.68 from $0.67. That missed the consensus estimate of $0.74 a share. Walmart increased its inventories ahead of the new U.S. tariffs on goods from China and other countries but is facing higher costs as it replenishes those goods. In response, it plans to raise prices on certain products
The company now expects its sales for all of fiscal 2026 (excluding businesses it recently sold and currency rate fluctuations) to rise between 3.75% and 4.75%. That’s up from its previous forecast of 3.0% to 4.0% growth.
The retail giant also raised its earnings outlook, to between $2.52 and $2.62 a share from $2.50 to $2.60 a share. The stock trades at 40.6 times the midpoint of that new range. While that’s a high multiple, it’s still an acceptable p/e in light of Walmart’s high market share and fast-growing online and advertising businesses.
As well, with the April 2025, payment, Walmart raised your quarterly dividend by 13.3%. Investors now receive $0.235 a share instead of $0.2075. The new annual rate of $0.94 yields 0.9%. The company has increased the annual dividend each year for the past 52 years.
Recommendation in Wall Street Stock Forecaster: Walmart Inc. is a buy.
