Is Walmart (WMT) Still Undervalued After Its Recent Share Price Rally?

Walmart (WMT) has quietly kept shareholders happy this year, with the stock up about 27% year to date and roughly 12% over the past 3 months, outpacing many big-box retail peers.

See our latest analysis for Walmart.

At around $114 per share, Walmart’s 1 month share price return of 13.67% and year to date share price return of 27.07% signal strengthening momentum, while its 5 year total shareholder return above 150% shows that long term holders have been well rewarded.

If Walmart’s steady climb has you thinking more broadly about resilient consumer names, you might also want to explore fast growing stocks with high insider ownership for other interesting ideas.

With shares hovering just below Wall Street targets and trading only slightly under some intrinsic value estimates, investors face a key question: Is Walmart still a bargain, or is the market already pricing in its next leg of growth?

Most Popular Narrative: 4.3% Undervalued

With Walmart last closing at $114.36, the most widely followed narrative pegs fair value modestly higher at about $119, framing the stock as slightly mispriced rather than deeply discounted.

Expansion of high margin business streams Walmart Connect (advertising, up 31 46% globally), marketplace, and Walmart+ memberships (global advertising up 46%, membership income up 15%) is diversifying Walmart's income base beyond retail. This is gradually transforming the company's profit mix and resulting in structurally higher net margins and earnings over time.

Read the complete narrative.

Want to see why a mature retailer is being modeled more like a growth compounder? The narrative leans on expanding margins, disciplined buybacks, and a future earnings multiple usually reserved for market darlings. Curious which revenue streams and profit forecasts are doing the heavy lifting in that equation? Read on to unpack the full playbook behind this fair value call.

Result: Fair Value of $119 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, sustained wage inflation and tougher online competition could squeeze margins, challenging assumptions about steady earnings growth and the premium valuation already reflected in the share price.

Find out about the key risks to this Walmart narrative.

Another View: Rich Multiples, Thin Margin of Safety

While the narrative and fair value work suggest Walmart is modestly undervalued, its 39.8x earnings multiple paints a tougher picture. That is well above the US consumer retailing industry at 21.8x, the peer average at 26x, and even our 36.9x fair ratio. This leaves little room for disappointment.

See what the numbers say about this price — find out in our valuation breakdown.

Build Your Own Walmart Narrative

If you see things differently or prefer to dig into the numbers yourself, you can build a personalized view of Walmart in just minutes: Do it your way.

A great starting point for your Walmart research is our analysis highlighting 3 key rewards and 1 important warning sign that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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