Walmart Inc. WMT

Key data

The business

Walmart sells groceries, general merchandise and now services to roughly 90% of American households, and it sets price by being the largest buyer in most of its categories. Groceries are more than half of US revenue and supply the recurring traffic. Payment is mostly the old way, margin on goods sold, at a 25.2% gross margin and a 4.2% operating margin on $713.2B of revenue.

The interesting part is attached: advertising sold to the brands on Walmart's own shelves, commission on third-party marketplace sellers, a membership program, and fulfilment services sold back to those sellers. Those businesses grow faster and carry margins several times the retail base, which is what changed the multiple. Walmart does not break their revenue out, so the mix shift is asserted rather than shown.

Business read. A 4% grower with a 4% margin, priced for a mix shift it has not yet disclosed.

Things you might not know

Doug McMillon no longer runs Walmart. The 2026 proxy, filed 2026-04-23, shows John Furner succeeded him as President and CEO in 2025, with McMillon retiring from the board in June 2026. The $26.6B capital spending decision now belongs to a chief executive in a first full year in the job.

About 82% of the CEO's fiscal 2026 target pay is tied to operating income, sales and return on investment, per that same proxy. Return on investment sits inside the long-term award, which means the person guiding capital spending is paid on how well that capital earns.

Walmart runs a 0.77 current ratio and a 0.23 quick ratio, numbers that would frighten anyone reading a manufacturer. With 8.9x inventory turns and 66x receivables turns, it sells the goods long before it pays for them. Suppliers finance the balance sheet, and that is a feature.

Fundamentals

Annual detail is what the source pulled, so sequential comparisons are unavailable except on reported earnings per share. The shape is clear enough: operating income grew 1.6% on 4.7% revenue growth, meaning margin went backwards, while earnings per share grew 13.3% on help from below the operating line and a smaller share count. Cash flow grew faster than either.

Valuation

Peer set: Costco, Target, Kroger, Amazon, Dollar General.

Peer medians were not pulled in the source run, and this note does not fetch vendor comparables, so the right column stays honest rather than full. On its own numbers Walmart carries 37.4x trailing earnings and 61.1x free cash flow while growing revenue 4.7% at a 4.2% operating margin. The multiple is doing the work that the margin is not, which is the entire argument on both sides.

Management

Compensation

The linchpins

Win big if

Capital spending flattens while operating cash flow keeps growing, so free cash flow expands toward $20B and 61.1x collapses into something a 4% grower can actually carry. The first observable proof is fiscal 2027 capital spending guidance at or below $27B against the $26.6B just spent. The confirming signal is operating margin moving above 4.4% as advertising and marketplace mix builds, because that is the first evidence the attached businesses are large enough to bend a $713.2B revenue base.

Surprised down if

Capital spending keeps climbing with revenue past $30B and free cash flow stalls near $15B, which leaves the stock near 55x cash for a business reinvesting two thirds of its cash flow to grow 4%. The first observable proof is a capital spending guide above $30B. The confirming signal is operating income growth staying below revenue growth for a second year, with comparable sales decelerating into a weakening consumer, which would remove the defensive premium as well.

Last word

Walmart earns $2.73 a share and generates $1.70 of free cash; the gap is wearing a hard hat.