Is Now the Moment to Reassess Walmart Stock After Its 18.9% Surge in 2025?

• Ever wondered if Walmart's strong reputation and massive footprint translate into an attractive stock price? Let's dig into what really drives its value and see if now is the right time to take a closer look.
• Walmart's stock has surged recently, climbing 6.4% over the last week and delivering an impressive 18.9% gain year-to-date. This could indicate shifting momentum or fresh optimism.
• Recent headlines have highlighted Walmart's strategic expansion into new markets and innovations in its digital offerings. These moves are fueling investor enthusiasm and could help explain the notable uptick in share price.
• The company's valuation score is just 1 out of 6. This suggests the market may be pricing in more than the fundamentals warrant right now. Stay with us as we break down how different valuation methods paint the picture and reveal a smarter way to judge if Walmart is truly a buy.

Walmart scores just 1/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.

Approach 1: Walmart Discounted Cash Flow (DCF) Analysis

The Discounted Cash Flow (DCF) model estimates a company’s value by projecting its future free cash flows and discounting them back to their present value. This provides an intrinsic value for investors and seeks to capture Walmart’s ability to generate cash well into the future.

For Walmart, the latest reported Free Cash Flow stands at $17.3 Billion. Analysts forecast steady growth, with FCF expected to reach $31.5 Billion by 2030. Projections for the next five years are analyst-driven, while longer-term numbers are extrapolated based on confidence in Walmart’s stable and resilient business model.

Based on these cash flow projections, the DCF methodology estimates Walmart’s fair value at $112.93 per share. Compared to the current market price, this suggests the stock is trading at a 5.2% discount, or slightly below its intrinsic value.

The DCF perspective is that Walmart is ABOUT RIGHT in terms of valuation at present. Investors see only a modest margin of undervaluation, likely reflecting the company’s well-known strengths and stability.

Result: ABOUT RIGHT

Walmart is fairly valued according to our Discounted Cash Flow (DCF), but this can change at a moment's notice. Track the value in your watchlist or portfolio and be alerted on when to act.

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Walmart.

Approach 2: Walmart Price vs Earnings

For established and consistently profitable companies like Walmart, the Price-to-Earnings (PE) ratio is a time-tested tool for valuation. This metric reflects what investors are currently willing to pay for each dollar of Walmart’s earnings, making it a quick check on how the stock’s price stacks up relative to its profitability.

Interpreting a “normal” or “fair” PE ratio depends on factors such as a company’s expected earnings growth and its risk profile. Companies with faster-growing profits and lower risks usually deserve a higher PE, while those with slower growth or more uncertainty tend to trade at a lower multiple.

Walmart’s current PE ratio is 37.2x, noticeably higher than both the Consumer Retailing industry average of 20.0x and the peer group average of 24.8x. At first glance, this premium may seem steep, but headline ratios only tell part of the story.

Simply Wall St’s proprietary Fair Ratio offers a deeper analysis than standard benchmarks by considering Walmart’s specific growth prospects, profit margins, market cap, and risk profile. For Walmart, the Fair Ratio is calculated at 34.4x, suggesting a valuation that better reflects its unique attributes.

The Fair Ratio provides a smarter comparison than generic industry or peer averages because it adjusts for company-specific details that traditional multiples can miss. Comparing Walmart’s current PE of 37.2x to its Fair Ratio of 34.4x shows that the stock is trading just above this intrinsic benchmark. The difference is within a reasonable range, indicating investors are not dramatically overpricing or underpricing Walmart at present.

Result: ABOUT RIGHT

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1437 companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your Walmart Narrative

Earlier we mentioned there is an even better way to understand valuation, so let’s introduce you to Narratives.

A Narrative is more than just a number; it is your personal story or perspective about a company that connects the business’s outlook to a financial forecast and, ultimately, to a fair value estimate.

On Simply Wall St, Narratives make it easy for anyone to link their insights about Walmart’s strategy, market shifts, or business risks directly to future estimates for revenue, earnings, and profit margins. These connect together to produce your own fair value for the stock.

This feature lives right within the Community page on Simply Wall St, making professional-style valuation accessible to millions of investors who want to test, compare, and update their views in real time as news or earnings emerge.

Narratives help you answer the most important investment questions: Is Walmart's current price above or below the fair value based on your expectations, and is now the right time to buy or sell?

For example, some investors, bullish on Walmart’s digital transformation, see a fair value as high as $127 per share; others, more cautious about margin growth and international risks, arrive at just $64 per share. Narratives let you see, understand, and join the debate with your own assumptions.

Do you think there's more to the story for Walmart? Head over to our Community to see what others are saying!

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com