Walmart Inc. (WMT) Stock Analysis
Walmart Inc. (WMT) Stock Analysis
Analysis from 10-Q filed 2025-12-03. Data as of Q1 2026.
Overall Grade: F (Concerning)
Walmart Inc. faces challenges in financial performance that warrant careful analysis.
| Metric | Value | Context |
|---|---|---|
| ROIC | 15.3% | Solid returns |
| FCF Margin | 2.1% | Cash flow pressure |
| Debt/Equity | 0.4x | Conservative leverage |
Investment Thesis: Strong return on invested capital of 15.3% suggests durable competitive advantages and efficient capital allocation.
Explore Walmart Inc.: Earnings History | Filing Intelligence | ROIC Analysis
Profitability: Walmart Inc. earns 15.3% ROIC, Top 50% in Consumer Discretionary
Walmart Inc.'s trailing-twelve-month ROIC of 15.3% ranks Top 50% in Consumer Discretionary companies (sector median: 8.8%), driven by NOPAT margin of 3.2% combined with asset turnover of 2.6x. Source: 10-Q filed 2025-12-03. Gross margin of 24.9% with operating margin at 4.2% reflects a competitive pricing environment.
| Metric | WMT | Rating | Context |
|---|---|---|---|
| Return on Invested Capital (ROIC) | 15.3% | Good | Above sector median of 8.8% |
| Return on Equity (ROE) | 24.0% | Excellent | Efficient use of shareholder equity |
| Gross Margin | 24.9% | Adequate | Competitive pricing environment |
| Operating Margin | 4.2% | Warning | Moderate operational efficiency |
Cash Flow: Walmart Inc. generates $14.9B FCF at 2.1% margin, positive NaN/8 quarters
Walmart Inc. generated $14.9B in free cash flow (TTM), a 2.1% FCF margin, a margin that ranks Bottom 50% in Consumer Discretionary. Operating cash flow exceeds net income by 1.9x, indicating high earnings quality. FCF was positive in N/A of the last 8 quarters. Source: 10-Q filed 2025-12-03.
| Metric | WMT | Rating | Context |
|---|---|---|---|
| Free Cash Flow Margin | 2.1% | Warning | Thin cash margins |
| Free Cash Flow (TTM) | $14.9B | Good | Positive cash generation |
| OCF/Net Income | 1.9x | Excellent | High earnings quality |
| FCF Consistency (8Q) | N/A | Warning | Variable cash flow |
Balance Sheet: Walmart Inc. at 0.4x leverage
Walmart Inc.'s debt-to-equity ratio of 0.4x reflects moderate leverage. Total debt of $44.8B offset by $11.3B in cash. Source: 10-Q filed 2025-12-03.
| Metric | WMT | Rating | Context |
|---|---|---|---|
| Debt to Equity | 0.4x | Good | Conservative capital structure |
| Net Cash Position | $-33.4B | Warning | Net debt position |
Valuation: Walmart Inc. trades at 43.5x earnings
Walmart Inc. trades at a P/E of 43.5x. Free cash flow yield of 1.6% reflects market expectations for growth.
| Metric | WMT | Rating | Context |
|---|---|---|---|
| P/E Ratio | 43.5x | Adequate | Premium valuation |
| EV/Sales | 1.4x | Excellent | Attractive revenue multiple |
| FCF Yield | 1.6% | Warning | Lower cash yield |
| Dividend Yield | 0.8% | Adequate | Growth focus over income |
Capital Allocation: Walmart Inc. returns 1.6% shareholder yield
Walmart Inc.'s total shareholder yield is 1.6% (dividends 0.8% + buybacks 0.9%). Source: 10-Q filed 2025-12-03.
| Metric | WMT | Rating | Context |
|---|---|---|---|
| Total Shareholder Yield | 1.6% | Adequate | Dividend + buyback yield combined |
| Buyback Yield | 0.9% | Adequate | Minimal buyback activity |
| Total Capital Returned (TTM) | $15.6B | Good | Dividends + buybacks returned to shareholders |
Sector Rankings
| Metric | Value | Percentile | vs Median |
|---|---|---|---|
| Return on Invested Capital (ROIC) | 15.3% | Top 50% | 1.7x above |
| Free Cash Flow Margin | 2.1% | Bottom 50% | 0.8x below |
| Gross Margin | 24.9% | Bottom 25% | 0.6x below |
| Operating Margin | 4.2% | Bottom 50% | 0.9x below |
| Return on Equity (ROE) | 24.0% | Top 50% | 2.3x above |
| P/E Ratio | 43.5x | N/A | - |
Financial Scorecard
| Metric | WMT | Rating | Sector Context |
|---|---|---|---|
| Return on Invested Capital (ROIC) | 15.3% | Good | Top 50% of sector (median: 8.8%) |
| Free Cash Flow Margin | 2.1% | Warning | Bottom 50% of sector (median: 2.7%) |
| Gross Margin | 24.9% | Adequate | Bottom 25% of sector (median: 39.5%) |
| Debt to Equity Ratio | 44.9% | Good | Moderate leverage |
| P/E Ratio (Price-to-Earnings) | 43.5x | Adequate | High expectations priced in |
| Free Cash Flow Yield | 1.6% | Warning | Growth-focused valuation |
Frequently Asked Questions
Q: What is Walmart Inc.'s Return on Invested Capital (ROIC)?
Walmart Inc. (WMT) has a trailing twelve-month Return on Invested Capital (ROIC) of 15.3%. This compares above the sector median of 8.8%. An ROIC between 12-20% indicates solid capital allocation and sustainable competitive position.
Q: What is Walmart Inc.'s Free Cash Flow Margin?
Walmart Inc. (WMT) has a free cash flow margin of 2.1%, generating $14.9 billion in free cash flow over the trailing twelve months. A thin FCF margin may indicate heavy reinvestment or operational challenges.
Q: Is Walmart Inc. stock overvalued or undervalued?
Walmart Inc. (WMT) trades at a P/E ratio of 43.5x, which is above the sector median of N/A. The EV/Sales multiple is 1.4x. Free cash flow yield is 1.6%, reflecting growth expectations priced into the stock.
Q: Does Walmart Inc. pay a dividend?
Walmart Inc. (WMT) currently pays a dividend yield of 0.8%. Including share buybacks, the total shareholder yield is 1.6%. The relatively low yield suggests the company prioritizes growth reinvestment over income distribution.
Q: What is Walmart Inc.'s revenue and earnings growth?
Walmart Inc. (WMT) grew revenue by 4.7% year-over-year. Earnings per share increased by 13.2% compared to the prior year. Modest growth indicates a mature business with stable demand.
Q: Is Walmart Inc. buying back stock?
Walmart Inc. (WMT) repurchased $8.1 billion of stock over the trailing twelve months. This represents a buyback yield of 0.9%.
Q: How does Walmart Inc. compare to competitors in Consumer Discretionary?
Compared to other companies in Consumer Discretionary, Walmart Inc. (WMT) shows: ROIC of 15.3% is above the sector median of 8.8% (Top 28%). FCF margin of 2.1% trails the sector median of 2.7% (Bottom 44% of sector). Gross margin at 24.9% is 14.6 percentage points lower than sector peers. These rankings are based on MetricDuck's analysis of all Consumer Discretionary companies with available SEC filings.
Q: What warning signs should I watch for with Walmart Inc.?
Investors in Walmart Inc. (WMT) should monitor these potential warning signs: 1) FCF margin is thin at 2.1%, leaving limited buffer for economic downturns. Regular monitoring of SEC filings and quarterly trends is recommended.
Data Source: Data sourced from 10-Q filed 2025-12-03. TTM metrics as of Q1 2026.
Methodology: Financial metrics calculated from SEC 10-K and 10-Q filings using standardized formulas. Sector comparisons use peer group based on SIC code.
Scope: This analysis covers SEC filing fundamentals — profitability, cash flow, balance sheet, and valuation metrics. For analyst estimates and price targets, consult sell-side research.
This analysis is for informational purposes only and does not constitute investment advice.