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The favorable case requires capital spending relative to depreciation to fall while Walmart U.S.
Capital expenditures relative to depreciation and amortization remain above 2.0 times at FY2029.
Sell. At the report-date price of $106.05 on 2026-09-08, the shares stood above Fair value of $75.66 and Potential value of $95.99.3
The main risk is that investment spending stays high without improving segment economics. That would absorb operating cash and reduce the cash supporting value per share.
The clearest upside is capital normalization. FY2026 operating cash flow was $41.57 billion and free cash flow was $14.92 billion despite $26.64 billion of capex.
The favorable path is demand-led: segment economics remain stable while investment intensity falls, allowing more operating cash to become distributable cash.5
Sell because the report-date valuation exceeds the supported Fair value despite Walmart’s strong operating cash generation.5
The favorable path requires stable segment economics and lower capital spending relative to depreciation and amortization. That would allow more operating cash to become distributable cash.5
Sell because the report-date valuation exceeds the supported Fair value despite Walmart’s strong operating cash generation.5
Walmart International is its second largest segment and operates 5,743 stores across 18 countries outside of the U.S. WALMART INC. continues to expand its marketplace offerings, which further enhances its fulfillment and advertising services. WALMART INC. is engaged in global operations of retail, wholesale and other units, as well as eCommerce, located throughout the U.S., Africa, Canada, Central America, Chile, China, India and Mexico. Its operations are conducted in three reportable segments: Walmart U.S., Walmart International and Sam's Club U.S., which are further described below. Each segment contributes to the Company's operating results differently.
Walmart seeks to build and maintain the trust of customers, associates, shareholders and other stakeholders with respect to its use of technology and data. Its digital trust commitments, in line with its Company's values of service, excellence, integrity and respect for the individual, provide a foundation for its approach to cybersecurity.
The harsh path combines weaker Walmart U.S. growth and margin with prolonged investment. Sales, profit and distributable cash fall while investors pay less for future earnings.
The downside path reduces consolidated sales, earnings and distributable cash, while investors assign less value to each future earnings dollar.
Walmart U.S. revenue growth below 3% for two fiscal years would weaken consolidated sales, earnings and cash flow.
A Walmart U.S. operating margin below 4.8% for two fiscal years would show weaker pricing, mix or competitive economics.
The five developments that would weaken our investment case.
A sustained shortfall in the largest operating segment would reduce consolidated revenue and flow through operating profit, earnings and free cash flow.
Current:FY2026 Walmart U.S. revenue was $485.60 billion versus $706.41 billion of consolidated revenue.
Walmart reported FY2026 operating income, but that outcome does not establish switching costs, network effects, protected assets, or another qualifying structural moat.
FY2026 operating income was $29.83 billion on $706.41 billion of revenue. These are operating outcomes, not independent proof of a moat.5
Each lens answers a different valuation question. Only included lenses set Fair value; floors and diagnostics provide context.
The highlighted cell is Fair value when every assumption sits at its base level ($75.66). Each row and column shows what Fair value becomes when one assumption moves.
Free cash flow to the firm stays positive in the first projected year at $13.0B after modeled reinvestment of $10.9B, with terminal value at 81.9% of enterprise value. A sudden drop in free cash flow is not projected unless capital spending relative to revenue, reinvestment, or gross margin resets materially.
This path would allow more operating cash to become free cash flow. It fades if investment intensity remains high through FY2029 or segment margins weaken.
A beat matters only if segment margins hold and investment intensity also improves.
Estimate delivery alone would not resolve the valuation and investment-duration risks.
Weak domestic growth or margin would reduce sales, profit and cash.
FY2026 operations generated $41.57 billion of cash versus $21.89 billion of reported profit. Capital spending was $26.64 billion after rising from $20.61 billion in FY2024.5
This segment drives most consolidated sales.6
FY2026 free cash flow was $14.92 billion after $26.64 billion of capital spending. Capital spending had risen from $20.61 billion in FY2024.45
Capex increased across FY2024-FY2026. Shareholders therefore need evidence that future spending either falls relative to depreciation or lifts segment economics.
FY2026 operating income establishes profitability, but that single level does not establish a multi-year return-on-invested-capital trajectory.
WACC was 7.3708% on 2026-09-09. No spread is inferred from operating income alone.
FY2026 operating cash flow was $41.57 billion versus net income of $21.89 billion.
Capital spending is the bridge between operating cash and free cash flow, so higher spending leaves less cash after investment.
| Revenue | $187,937,000,000 |
|---|---|
| Cost of revenue | $138,804,000,000 |
| Gross profit | $49,133,000,000 |
| Operating expenses | $39,750,000,000 |
| Operating income | $9,383,000,000 |
| Non-operating items and tax | -$2,854,000,000 |
| Net income | $6,529,000,000 |
| Total assets | $284,668,000,000 |
|---|---|
| Cash | $10,727,000,000 |
| Current assets | $84,874,000,000 |
| Total liabilities | $178,488,000,000 |
| Current liabilities | $107,469,000,000 |
| Shareholders’ equity | $105,887,000,000 |
| Net income | $21,893,000,000 |
|---|---|
| Operating inflow | $41,565,000,000 |
| Depreciation and amortization | $14,203,000,000 |
| Other operating adjustments | $5,469,000,000 |
| Operating cash flow | $41,565,000,000 |
| Cash available | $51,224,000,000 |
| Beginning cash | $9,536,000,000 |
| Exchange-rate effect | $123,000,000 |
| Investing outflow | $26,350,000,000 |
| Financing outflow | $13,553,000,000 |
| Net debt issuance | $4,881,000,000 |
| Share repurchases | $8,088,000,000 |
| Dividends paid | $7,507,000,000 |
| Other financing activities | $2,839,000,000 |
| Ending cash | $11,321,000,000 |
| Investing cash flow | -$26,350,000,000 |
| Financing cash flow | -$13,553,000,000 |
Source: SEC EDGAR · Filed 2026-03-13 · SEC EDGAR
| Revenue by operating segment | Revenue | Share | YoY |
|---|---|---|---|
| Walmart US | $485.6B | 68.1% | 4.4% |
| Walmart International | $132B | 18.5% | 7% |
| Sams Club US | $95.5B | 13.4% | 3.2% |
Point-in-time financial data used in the 2026-09-09 analysis.
| Period | Revenue | EBITDA | Net income | Operating cash flow | Free cash flow | Capex | Depreciation and amortization | Stock-based compensation | Share repurchases | Dividends paid | Net debt issuance | Investing cash flow | Financing cash flow | Beginning cash | Ending cash | Cash and investments | Total debt | Operating margin | ROIC | WACC | ROIC − WACC spread |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2017-01-31 | $481.3B | $32.8B | $13.6B | $31.7B | $21.1B | $10.6B | $10.1B | $596M | $8.3B | $6.2B | — | -$13.9B | -$19.1B | — | $7.1B | $6.9B | $38.3B | 4.7% | — | 4.3% | — |
| 2018-01-31 | $495.8B | $28B | $9.9B | $28.3B | $18.3B | $10.1B | $10.5B | $626M | $8.3B | $6.1B | — | -$9.1B | -$19.9B | $7.1B | $7B | $6.8B | $33.8B | 4.1% | — | 5.1% | — |
| 2019-01-31 | $510.3B | $24.5B | $6.7B | $27.8B | $17.4B | $10.3B | $10.7B | $773M | $7.4B | $6.1B | — | -$24B | -$2.5B | $7B | $7.8B | $7.7B | $45.4B | 4.3% | — | 4.4% | — |
| 2020-01-31 | $519.9B | $33.7B | $14.9B | $25.3B | $14.6B | $10.7B | $11B | $854M | $5.7B | $6B | — | -$9.1B | -$14.3B | $7.8B | $9.5B | $9.5B | $49.1B | 4.0% | — | 3.4% | — |
| 2021-01-31 | $555.2B | $34B | $13.5B | $36.1B | $25.8B | $10.3B | $11.2B | $1.2B | $2.6B | $6.1B | — | -$10.1B | -$16.1B | $9.5B | $17.8B | $17.7B | $44.3B | 4.1% | — | 2.7% | — |
| 2022-01-31 | $567.8B | $31.3B | $13.7B | $24.2B | $11.1B | $13.1B | $10.7B | $1.2B | $9.8B | $6.2B | — | -$6B | -$22.8B | $17.8B | $14.8B | $14.8B | $37.7B | 4.6% | — | 3.6% | — |
| 2023-01-31 | $605.9B | $30.1B | $11.7B | $28.8B | $12B | $16.9B | $10.9B | $1.6B | $9.9B | $6.1B | $2.3B | -$17.7B | -$17B | $14.8B | $8.8B | $8.6B | $38.8B | 3.4% | — | 5.5% | — |
| 2024-01-31 | $642.6B | $36.4B | $15.5B | $35.7B | $15.1B | $20.6B | $11.9B | $2.1B | $2.8B | $6.1B | $1.3B | -$21.3B | -$13.4B | $8.8B | $9.9B | $9.9B | $39.6B | 4.2% | — | 6.0% | — |
| 2025-01-31 | $674.5B | $42B | $19.4B | $36.4B | $12.7B | $23.8B | $13B | — | $4.5B | $6.7B | -$1.3B | -$21.4B | -$14.8B | $9.9B | $9.5B | $9B | $36B | 4.4% | — | 6.9% | — |
| 2026-01-31 | $706.4B | $46.5B | $21.9B | $41.6B | $14.9B | $26.6B | $14.2B | — | $8.1B | $7.5B | $4.9B | -$26.4B | -$13.6B | $9.5B | $11.3B | $10.7B | $38.2B | 4.2% | — | 8.0% | — |
Walmart Inc. (WMT) trades at 36.8x forward earnings against a peer median of 17.9x. Its EV/EBITDA of 20.7x compares with a peer median of 15.2x. The comparison uses 4 peers: Costco Wholesale Corporation, Philip Morris International Inc., Dollar General Corporation and Dollar Tree Inc., as of 2026-09-09.
Capex rose from $20.61 billion in FY2024 to $23.78 billion in FY2025 and $26.64 billion in FY2026.5
The favorable path requires stable segment economics and lower capital spending relative to depreciation and amortization. That would allow more operating cash to become distributable cash.
The adverse path has spending remain high while Walmart U.S. growth or margin weakens. That combination pressures profit and cash at the same time.
Walmart U.S. remains the main operating exposure, while International and Sam’s Club provide profitable but smaller contributions.6
No new allocation; reduce existing exposure. The report-date price exceeds Potential value. Domestic growth, margin and investment intensity remain the operating checkpoints.3
Reassess after each earnings update, focusing on domestic growth, margin, operating cash and investment intensity.
The report-date price is above Potential value, leaving no support from the published valuation range.3
Reduce exposure because the valuation gap outweighs the supported operating strengths.
Domestic concentration, prolonged investment and shorter earnings duration can weaken value through separate channels.
The report-date price of $106.05 exceeds Fair value of $75.66 and Potential value of $95.99.3
Structural durability is not established, while the report-date price exceeds both Fair value and Potential value.
Capture your own thesis, position size, and follow-up questions. Stays on this device, only you can see it.
The records this analysis drew on, as they stood when it was run.
Not every cited input appears here: internal calculations and intermediate model outputs have no external record, and some citations could not be matched to one.
Capital expenditures above 2.0 times depreciation and amortization at FY2029 would prolong reinvestment and reduce distributable cash.
A cost of equity above 8.6686% would lower the present value of distant cash flows without offsetting operating improvement.
An 18x valuation would mean investors pay less for each future earnings dollar even if Walmart remains profitable.
Sustained margin erosion would show that pricing, mix or competition is weakening profit and cash generated from each sales dollar.
Current:FY2026 operating income was $25.16 billion on $485.60 billion of revenue.
Alert ifBelow 4.8% for two consecutive fiscal years.
Persistently high investment would absorb operating cash without a measured payoff, delaying distributable cash growth and lowering cash-flow-based value per share.
Current:Capital expenditures were approximately 1.88 times depreciation and amortization in FY2026.
Alert ifAbove 2.0 times at FY2029.
A higher required return lowers the present value of distant cash flows, especially when the investment case depends on long-duration earnings.
Current:The cost of equity was 7.6686% on 2026-09-09.
Alert ifAbove 8.6686% within 12 months.
Investors would be paying less for each future earnings dollar, reducing value even if Walmart continued to report positive profit.
Current:Forward price to earnings was 36.76 times on 2026-09-09.
Alert ifFalls to 18 times within 24 months.
| Scale receives a shorter valuation period | high | Over the next 24 months | Require sustained estimate delivery and stable cash generation before treating scale as evidence of longer-lasting protection. |
Limitation: Terminal value is 71.1% of this model's value, above the 60% level at which the methodology flags concentration; the value leans on the years beyond the explicit forecast.
Under the moderate discount rate, $25.02 comes from forecast-period earnings and $55.68 from the long-term value, totaling $80.70.
Project EPS through the explicit advantage period, fade growth as competition catches up, and discount the full stream at cost of equity.
Limitation: Terminal value is 79.9% of this model's value, above the 60% level at which the methodology flags concentration; the value leans on the years beyond the explicit forecast.
Apply a terminal P/E to the dated forward EPS path, then discount that future share value back to the analysis date.
Convert the revenue and margin path into after-tax free cash flow, discount the annual per-share amounts and terminal value at WACC, then adjust for signed net debt per current share.
Limitation: Terminal value is 81.9% of this model's value, above the 60% level at which the methodology flags concentration; the value leans on the years beyond the explicit forecast.
Add depreciation to net income, subtract maintenance capex, divide by diluted shares, and apply a normalized valuation multiple.
Multiply the peer median PEG by this stock's forecast growth to derive an implied forward P/E, then apply it to forward EPS.
Solve for the growth rate that makes the model value equal the report-date share price.
Value each distinct segment, subtract corporate overhead and net debt, add probability-weighted optionality, and divide by diluted shares.
Discount the explicit dividend path and its Gordon-growth terminal value at cost of equity.
This path depends on meeting the FY2028 revenue and earnings estimates while preserving Walmart U.S. operating profitability. It weakens if annual Walmart U.S. revenue growth stays below 3% or operating margin stays below 4.8% for two consecutive fiscal years. Either breach would reduce consolidated sales, profit, earnings per share and free cash flow.1
Erosion would show weaker pricing, mix or competitive economics.
Persistent intensity would absorb cash and delay shareholder returns.
Weakness would reduce diversification and consolidated sales.6
Weak conversion would make reported earnings less useful for valuing distributable cash.5
| $779.55B |
| $812.34B |
| $845.07B |
| $878.33B |
| $912.07B |
| Revenue growth | 5.6% | 4.5% | 4.2% | 4.0% | 3.9% | 3.8% |
| Operating margin | 4.2% | 4.2% | 4.2% | 4.2% | 4.3% | 4.3% |
| Operating income | $31.57B | $33.02B | $34.45B | $35.86B | $37.30B | $38.75B |
| Tax rate | 24.4% | 24.4% | 24.4% | 24.4% | 24.4% | 24.4% |
| NOPAT | $23.87B | $24.97B | $26.05B | $27.12B | $28.21B | $29.30B |
| Reinvestment | $10.91B | $9.06B | $6.99B | $4.72B | $2.24B | $6.50B |
| Reinvestment rate (of NOPAT) | 45.7% | 36.3% | 26.8% | 17.4% | 8.0% | 22.2% |
| Depreciation and amortization | $15.00B | $15.67B | $16.33B | $16.99B | $17.66B | $18.34B |
| Free cash flow to firm | $12.96B | $15.91B | $19.06B | $22.40B | $25.96B | $22.81B |
| Walmart Us revenue | $512.97B | $535.86B | $558.40B | $580.90B | $603.76B | $626.95B |
| Walmart International revenue | $139.40B | $145.62B | $151.74B | $157.86B | $164.07B | $170.37B |
| Sams Club Us revenue | $100.89B | $105.40B | $109.83B | $114.25B | $118.75B | $123.31B |
| Terminal growth | 3.6% | 3.6% | 3.6% | 3.6% | 3.6% | 3.6% |
FY2026 capex was $26.64 billion, while free cash flow was $14.92 billion.
Value depends on spending normalizing or producing measurable returns.
| Margin |
|---|
| WMT | Walmart Inc. | $844.0B | 36.8x | 1.1x | 20.7x | 22.3% | — |
| COST | Costco Wholesale Corporation | 40.2x | 1.4x | 29.2x | 29.2% | 3.7% | |
| PM | Philip Morris International Inc. | 20.1x | 6.8x | 18.5x | — | 40.0% | |
| DG | Dollar General Corporation | 15.5x | 0.6x | 11.8x | 19.7% | 6.8% | |
| DLTR | Dollar Tree Inc. | 15.7x | 1.2x | 11.9x | 46.0% | 6.2% |
