Should You Buy Walmart (WMT)?

[View in browser]( [The Spill Logo] BROUGHT TO YOU BY: [Logo]( Proprietary Data Insights Financial Pros’ Top Discount Retail Stock Searches in the Last Month Rank Ticker Name Searches #1 [WMT]( Walmart 80 #2 [TGT]( Target 66 #3 [COST]( Costco Wholesale 23 #4 [DLTR]( Dollar Tree 19 #5 [OLLI]( Ollie’s Bargain 8 #ad [Navigating Market Volatility: The Alt Advantage]( Brought to you by [International Living Magazine]( [Riots at major party conventions, war with China, Dems hacking machines…]( [International Living Magazine - Riots at major party conventions, war with China, Dems hacking machines…]( Anything could happen this election season. International investment expert finds safe way to move assets overseas and potentially get paid to do it BEFORE the election chaos hits. [Read More...]( Should You Hold Walmart (WMT)? The #1 Fortune 100 company impressed investors with its latest earnings report. Sales beat expectations while operating income surged. The Wall Street Journal even did a piece recently on how the company earns more than $1.2 million a minute. And financial pros are taking notice. Search volume surged in the last two weeks, putting Walmart (WMT) in the top spot after sitting behind Target (TGT) for months. Unlike consumer discretionary stores, Walmart offered a satisfying outlook. Shares surged on the news, catching everyone’s attention. There’s a lot to love here. But is this just hype and hope or a real investment opportunity? Walmart’s Business When you think of retail giants, Walmart is probably the first name that comes to mind. And for good reason - this company is the largest retailer on the planet, with over 10,500 stores and clubs across 24 countries. With trailing 12-month revenue over $650 billion, Walmart's massive scale allows it to offer some of the lowest prices around. That’s not always pleasant for suppliers who are regularly beat up for cost savings. Each week, more than 230 million customers visit Walmart's stores and digital channels to stock up on groceries, everyday essentials, general merchandise, and health & wellness products. Whether you prefer shopping at supercenters, discount stores, Neighborhood Markets, or Sam's Club warehouse membership clubs, Walmart's got you covered. The company’s business is divided into three main segments: - Walmart U.S. (66% of total revenue) - This is the company's core mass merchant business in the U.S., operating under the Walmart brand - Walmart International (23% of revenue) - Here, you'll find Walmart's operations in 23 countries outside the U.S. - Sam's Club (11% of revenue) - This segment includes the warehouse membership clubs in the U.S. Walmart isn't resting on its laurels - the retail giant is constantly adapting to stay ahead of the game. By heavily investing in eCommerce, expanding delivery options, and leveraging its vast network of stores, Walmart is ensuring that it remains convenient for customers to shop however they prefer. Strategic partnerships, like the recent one with Shopify, are expanding Walmart's online product offerings, while the rapid growth of its advertising business, Walmart Connect, showcases the value of the company's massive customer reach and data insights. In short, Walmart is making all the right moves to maintain its position as the world's retail leader. Financials [Financials] Source: Stock Analysis In the first quarter of fiscal 2025, Walmart posted some impressive numbers. Total revenue jumped 6.0% year-over-year to $161.5 billion, while adjusted operating income surged 13.7% to $7.1 billion, thanks to strong sales, higher gross margins, and increased membership income. And get this - eCommerce sales skyrocketed 21% in the quarter! Comparable sales for Walmart U.S. rose 3.8% during Q1, driven by strong performance in groceries and consumables. The company even managed to attract more high-income shoppers and saw a nice boost in its advertising business. This continues a +5% sales growth trend for the company - pretty high for a big box store. Margins have increased slightly over the decade as ecommerce and supply chain efficiencies take hold. However, free cash flow margin has compressed as Capex doubled from $10 to $20 billion from 2021 to 2024. The $10 billion in free cash flow gets plowed back to shareholders through dividends and share buybacks, yielding around 1.9% overall. Valuation [Valuation] Source: Seeking Alpha Walmart trades at a P/E and price-to-cash premium to fellow retailer Target, which has been plagued by issues in the last few years, as well as Dollar Tree (DLTR). Yet, all three are far cheaper than high-growth Costco (COST). At 14.6x cash flow, Walmart trades at 7.6% above its 5-year average. Growth [Growth] Source: Seeking Alpha Walmart’s growth numbers might not look so hot compared to some of its peers like Ollie’s Bargain Outlet (OLLI). And even three and five-year CAGR revenue growth are half Costco’s. Yet, it’s on par with most retailers this and next fiscal year. Profitability [Profit] Source: Seeking Alpha Retail margins aren’t especially high. But with heavy volume, small increments matter. Walmart’s EBIT and net income margins could be higher if they improved their sales mix. And we’ve talked about the recent boost in Capex, which has hurt free cash flow. That’s brought down the company’s returns this year. [Alarm Bells: Seniors' Savings at Risk]( I’m writing to you about a congressional law that I believe poses a significant threat to the retirement savings of American seniors. This legislation, which I describe as one of the most devastating in my career, is designed to slash the value of 401(k)s, IRAs, including Roth IRAs, and pensions. As a result, retirees across the country are facing the prospect of substantial financial losses. However, there are proactive measures that retirees can take to protect themselves from the adverse effects of this law. [Here's how to safeguard a brighter financial future ]([Ad] Our Opinion 7/10 Walmart is the best retailer outside of Costco in this group. They deliver consistent performance year after year while always improving operations. If the economy starts to move into a recession, we could see consumers begin to trade down on their purchases, boosting Walmart’s sales. Nonetheless, we feel it is fairly valued at these prices, offering no real bargain. [-facebook-share]( [-twitter-share]( [-linkedin-share]( [-email-share](mailto:?body= %3Cbr+%2F%3E%0A%3Cb%3ENotice%3C%2Fb%3E%3A++Undefined+property%3A+stdClass%3A%3A%24previewText+in+%3Cb%3E%2Fvar%2Fwww%2Fhtml%2Fnl_forms%2Fsrc%2FICTheSpill%2Fautomate-ic-article.php%3C%2Fb%3E+on+line+%3Cb%3E102%3C%2Fb%3E%3Cbr+%2F%3E%0Ahttps%3A%2F%2Finvestingchannel.com%2F%3Fp%3D616719?utm_medium=ic-nl&utm_source=118911 ) News & Insights Just Spilled - [Should You Hold GameStop (GME)?]( - [Decoding Your Finances: The Juice Edition]( - [Disney Stock Surges 57%: Unlock the Secrets Behind the Magic!]( - [Financial Pros Top 5 Stock Searches This Month]( [News & Insights-facebook-share]( [News & Insights-twitter-share]( [News & Insights-linkedin-share]( [News & Insights-email-share](mailto:?body= %3Cbr+%2F%3E%0A%3Cb%3ENotice%3C%2Fb%3E%3A++Undefined+property%3A+stdClass%3A%3A%24previewText+in+%3Cb%3E%2Fvar%2Fwww%2Fhtml%2Fnl_forms%2Fsrc%2FICTheSpill%2Fautomate-ic-article.php%3C%2Fb%3E+on+line+%3Cb%3E102%3C%2Fb%3E%3Cbr+%2F%3E%0Ahttps%3A%2F%2Finvestingchannel.com%2F%3Fp%3D616719?utm_medium=ic-nl&utm_source=118911 ) [We want to hear from you. Let us know your thoughts by clicking here]( [Ads] [InvestingChannel Logo](#) Follow us on: [Facebook Logo]( [LinkedIn Logo]( [Twitter Logo]( [Instagram Logo]( To ensure delivery of all emails, [allow us on your list](. Manage your subscriptions with our [preference center](. [Unsubscribe here.]( View our privacy policy [here](. Copyright ©2024 InvestingChannel. All rights reserved. 1325 Avenue of the Americas, Floor 27 & 28 New York, New York 10019 Disclaimer: This is not investment advice. This InvestingChannel, Inc., newsletter is for information purposes only and is based on opinion. Futures, forex, stock, and options trading are not appropriate for all investors. There is a substantial risk of loss associated with trading these markets. Losses can and will occur. No system or methodology has ever been developed that can ensure returns or eliminate losses. InvestingChannel, Inc., makes no representation or implication that using any of the methodologies or systems in this newsletter will generate returns or insure against losses. Investors should be cautious about any and all investments and are advised to conduct their own due diligence prior to making any investment decisions. [Link](