Walmart's Earnings Report Signals Caution for Investors
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1 hour ago
0mins
Should l Buy WMT?
Source: Fool
- Quarterly Revenue Growth: Walmart reported fourth-quarter revenue of $190.7 billion, a 5.6% increase, driven by a 24% rise in global e-commerce sales, indicating positive progress in its digital transformation despite an uncertain economic backdrop.
- Earnings Beat Expectations: Adjusted earnings per share were $0.74, exceeding analysts' expectations by $0.01, with an annual EPS of $2.64, reflecting stable profitability; however, the cautious future guidance may dampen investor sentiment.
- Prudent Future Guidance: Walmart expects revenue growth of 3.5%-4.5% for fiscal year 2027, below Wall Street's forecast of 4.8%, which could lead to investor concerns, particularly as lower-income consumers face spending constraints.
- Competitive Market Pressure: While Walmart achieved a 46% annual growth in its global advertising business and a 15.1% increase in membership fee revenue, its price-to-earnings ratio of 44.3 is significantly higher than the Nasdaq and S&P 500 averages, potentially causing investors to adopt a cautious stance on future growth.
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Analyst Views on WMT
Wall Street analysts forecast WMT stock price to fall
26 Analyst Rating
25 Buy
1 Hold
0 Sell
Strong Buy
Current: 126.750
Low
119.00
Averages
125.75
High
136.00
Current: 126.750
Low
119.00
Averages
125.75
High
136.00
About WMT
Walmart Inc. is a technology-powered omnichannel retailer. The Company is engaged in the operation of retail and wholesale stores and clubs, as well as eCommerce Websites and mobile applications, located throughout the United States (U.S.), Africa, Canada, Central America, Chile, China, India and Mexico. It operates in three reportable segments: Walmart U.S., Walmart International and Sam's Club U.S. The Walmart U.S. segment includes the Company's mass merchandising concept in the U.S., as well as eCommerce, which includes omni-channel initiatives and certain other business offerings such as advertising services. The Walmart International segment consists of the Company's operations outside of the U.S. through its subsidiaries, as well as eCommerce and omni-channel initiatives. The Sam's Club U.S. segment includes the warehouse membership clubs in the U.S., as well as samsclub.com and omni-channel initiatives.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Walmart's Earnings Report Signals Caution for Investors
- Quarterly Revenue Growth: Walmart reported fourth-quarter revenue of $190.7 billion, a 5.6% increase, driven by a 24% rise in global e-commerce sales, indicating positive progress in its digital transformation despite an uncertain economic backdrop.
- Earnings Beat Expectations: Adjusted earnings per share were $0.74, exceeding analysts' expectations by $0.01, with an annual EPS of $2.64, reflecting stable profitability; however, the cautious future guidance may dampen investor sentiment.
- Prudent Future Guidance: Walmart expects revenue growth of 3.5%-4.5% for fiscal year 2027, below Wall Street's forecast of 4.8%, which could lead to investor concerns, particularly as lower-income consumers face spending constraints.
- Competitive Market Pressure: While Walmart achieved a 46% annual growth in its global advertising business and a 15.1% increase in membership fee revenue, its price-to-earnings ratio of 44.3 is significantly higher than the Nasdaq and S&P 500 averages, potentially causing investors to adopt a cautious stance on future growth.
See More
Walmart Faces Growth Challenges Amid High Valuation
- Net Income Growth: Walmart's net income increased by 13% in fiscal 2025, a notable achievement in the low-margin retail sector, yet the high P/E ratio poses potential risks to its stock performance.
- Leadership Transition: John Furner took over as CEO on February 1, 2026, succeeding Doug McMillon, who led the company since 2014, with investors questioning whether Furner can replicate McMillon's success.
- Valuation Pressure: When McMillon stepped down, Walmart's P/E ratio was 42, significantly higher than the S&P 500's 29, indicating that despite strong income growth, the stock could be vulnerable if expectations fall.
- Limited Growth Potential: With approximately 5,200 stores in the U.S., Walmart has little room for domestic expansion, and its heavy reliance on imports could lead to price hikes due to tariff uncertainties, negatively impacting sales.
See More
Walmart's New CEO Faces Significant Challenges
- Leadership Transition: John Furner became Walmart's CEO on February 1, 2026, succeeding Doug McMillon, who led the company since 2014 and delivered over 500% returns to shareholders, significantly outperforming the S&P 500.
- Market Environment: Furner inherits a company with a P/E ratio of 42, well above the S&P 500's 29, and while net income grew by 13% in fiscal 2026, the high P/E ratio poses risks if expectations falter.
- Limited Growth Potential: With approximately 5,200 stores in the U.S., Walmart faces market saturation, limiting future growth opportunities, and past attempts to expand outside North America have often ended in failure, complicating Furner's task.
- Import Dependency Risks: Walmart's heavy reliance on imports raises concerns, as tariff uncertainties could lead to price increases and subsequently lower sales, presenting significant challenges for Furner in driving sustained growth.
See More
Walmart's Earnings Report Highlights Strong Growth
- Strong Financial Performance: Walmart reported over $700 billion in revenue for Q4 of fiscal 2026, marking a nearly 5% year-over-year increase, underscoring its formidable position in the global retail market.
- Significant Profit Growth: Walmart's profits are growing faster than sales, driven by its digital transformation, with e-commerce sales reaching 23% of total sales, contributing to higher profit margins.
- Surge in Membership Income: Costco saw a 5% year-over-year increase in total memberships to 146 million in Q1 of fiscal 2026, with membership income jumping 14%, highlighting the effectiveness of its business model.
- Digital Advertising Boosts Profitability: Walmart enhances profitability through digital advertising and its connected-TV platform acquired from Vizio, leveraging extensive first-party consumer data, which is expected to continue driving profit growth.
See More
Walmart and Costco Financial Results Analysis
- Walmart Financial Highlights: In the fourth quarter of fiscal 2026, Walmart reported revenues exceeding $700 billion, marking a nearly 5% year-over-year increase, with profits rising even more, underscoring its strong market position and profitability.
- Costco Membership Growth: Costco's total memberships grew by 5% year-over-year to 146 million in the first quarter of fiscal 2026, with executive memberships increasing by 9%, resulting in a 14% rise in membership income, significantly enhancing the company's bottom line.
- E-commerce Sales Innovation: Walmart's global e-commerce sales reached 23% of total sales in fiscal 2026, a record high, indicating the success of its digital transformation, while high-margin third-party sales contributed additional revenue.
- Dividend and Valuation Comparison: Although both Costco and Walmart have forward P/E ratios exceeding 40, Walmart's higher dividend yield may offer better returns for investors, reflecting the differing investment values of the two companies in the market.
See More
Jim Cramer Outlines Market Investment Strategy
- Market Investment Framework: Jim Cramer outlined a straightforward market analysis framework, emphasizing the importance of investing in companies that are understandable, thereby mitigating risks associated with potential disruptions from artificial intelligence.
- HALO Stock Concept: Cramer highlighted the current market focus on 'HALO' stocks, which are characterized by heavy assets and low obsolescence risk, suggesting that these companies are more resilient in uncertain economic conditions and can attract investor interest.
- Demand-Driven Investments: He specifically mentioned that manufacturers of memory chips and storage devices, such as Sandisk and Micron, are currently facing product shortages, indicating strong market demand, and investors should look for opportunities in these sectors.
- Cautious Areas: Cramer advised investors to be cautious in sectors like finance, beef pricing, and steel, as these industries may be affected by market volatility and policy changes, recommending a focus on more stable consumer goods companies for investment.
See More
Walmart's Earnings Report Signals Caution for Investors
- Quarterly Revenue Growth: Walmart reported fourth-quarter revenue of $190.7 billion, a 5.6% increase, driven by a 24% rise in global e-commerce sales, indicating positive progress in its digital transformation despite an uncertain economic backdrop.
- Earnings Beat Expectations: Adjusted earnings per share were $0.74, exceeding analysts' expectations by $0.01, with an annual EPS of $2.64, reflecting stable profitability; however, the cautious future guidance may dampen investor sentiment.
- Prudent Future Guidance: Walmart expects revenue growth of 3.5%-4.5% for fiscal year 2027, below Wall Street's forecast of 4.8%, which could lead to investor concerns, particularly as lower-income consumers face spending constraints.
- Competitive Market Pressure: While Walmart achieved a 46% annual growth in its global advertising business and a 15.1% increase in membership fee revenue, its price-to-earnings ratio of 44.3 is significantly higher than the Nasdaq and S&P 500 averages, potentially causing investors to adopt a cautious stance on future growth.
See More
Walmart Faces Growth Challenges Amid High Valuation
- Net Income Growth: Walmart's net income increased by 13% in fiscal 2025, a notable achievement in the low-margin retail sector, yet the high P/E ratio poses potential risks to its stock performance.
- Leadership Transition: John Furner took over as CEO on February 1, 2026, succeeding Doug McMillon, who led the company since 2014, with investors questioning whether Furner can replicate McMillon's success.
- Valuation Pressure: When McMillon stepped down, Walmart's P/E ratio was 42, significantly higher than the S&P 500's 29, indicating that despite strong income growth, the stock could be vulnerable if expectations fall.
- Limited Growth Potential: With approximately 5,200 stores in the U.S., Walmart has little room for domestic expansion, and its heavy reliance on imports could lead to price hikes due to tariff uncertainties, negatively impacting sales.
See More
Walmart's New CEO Faces Significant Challenges
- Leadership Transition: John Furner became Walmart's CEO on February 1, 2026, succeeding Doug McMillon, who led the company since 2014 and delivered over 500% returns to shareholders, significantly outperforming the S&P 500.
- Market Environment: Furner inherits a company with a P/E ratio of 42, well above the S&P 500's 29, and while net income grew by 13% in fiscal 2026, the high P/E ratio poses risks if expectations falter.
- Limited Growth Potential: With approximately 5,200 stores in the U.S., Walmart faces market saturation, limiting future growth opportunities, and past attempts to expand outside North America have often ended in failure, complicating Furner's task.
- Import Dependency Risks: Walmart's heavy reliance on imports raises concerns, as tariff uncertainties could lead to price increases and subsequently lower sales, presenting significant challenges for Furner in driving sustained growth.
See More
Walmart's Earnings Report Highlights Strong Growth
- Strong Financial Performance: Walmart reported over $700 billion in revenue for Q4 of fiscal 2026, marking a nearly 5% year-over-year increase, underscoring its formidable position in the global retail market.
- Significant Profit Growth: Walmart's profits are growing faster than sales, driven by its digital transformation, with e-commerce sales reaching 23% of total sales, contributing to higher profit margins.
- Surge in Membership Income: Costco saw a 5% year-over-year increase in total memberships to 146 million in Q1 of fiscal 2026, with membership income jumping 14%, highlighting the effectiveness of its business model.
- Digital Advertising Boosts Profitability: Walmart enhances profitability through digital advertising and its connected-TV platform acquired from Vizio, leveraging extensive first-party consumer data, which is expected to continue driving profit growth.
See More
Walmart and Costco Financial Results Analysis
- Walmart Financial Highlights: In the fourth quarter of fiscal 2026, Walmart reported revenues exceeding $700 billion, marking a nearly 5% year-over-year increase, with profits rising even more, underscoring its strong market position and profitability.
- Costco Membership Growth: Costco's total memberships grew by 5% year-over-year to 146 million in the first quarter of fiscal 2026, with executive memberships increasing by 9%, resulting in a 14% rise in membership income, significantly enhancing the company's bottom line.
- E-commerce Sales Innovation: Walmart's global e-commerce sales reached 23% of total sales in fiscal 2026, a record high, indicating the success of its digital transformation, while high-margin third-party sales contributed additional revenue.
- Dividend and Valuation Comparison: Although both Costco and Walmart have forward P/E ratios exceeding 40, Walmart's higher dividend yield may offer better returns for investors, reflecting the differing investment values of the two companies in the market.
See More
Jim Cramer Outlines Market Investment Strategy
- Market Investment Framework: Jim Cramer outlined a straightforward market analysis framework, emphasizing the importance of investing in companies that are understandable, thereby mitigating risks associated with potential disruptions from artificial intelligence.
- HALO Stock Concept: Cramer highlighted the current market focus on 'HALO' stocks, which are characterized by heavy assets and low obsolescence risk, suggesting that these companies are more resilient in uncertain economic conditions and can attract investor interest.
- Demand-Driven Investments: He specifically mentioned that manufacturers of memory chips and storage devices, such as Sandisk and Micron, are currently facing product shortages, indicating strong market demand, and investors should look for opportunities in these sectors.
- Cautious Areas: Cramer advised investors to be cautious in sectors like finance, beef pricing, and steel, as these industries may be affected by market volatility and policy changes, recommending a focus on more stable consumer goods companies for investment.
See More
