New York, USA – Walmart has been steadily climbing the ranks in the “Top 10 Client Position” list, driven by the increase in stock price and continued stock purchases. Year-to-date, the stock is up by 48.15% as of the end of August 31, 2024. Despite this growth, there has been limited discussion from sell-side or prominent buy-side investors regarding the retail giant’s performance.

Analysts suggest that Walmart has strong support in the $68 – $72 per share range, making it wise to await a potential pullback to capitalize on buying opportunities. The latest Q2 ’25 earnings call revealed that both earnings per share (EPS) and revenue exceeded expectations. The company experienced a quarterly comparable sales growth of 4.2%, surpassing management’s projections based on the previous year’s 6% growth.

Furthermore, Walmart’s operating margin expanded by 20 basis points to 5.70%, reflecting a healthy performance for the company. The retail giant has been focusing on utilizing artificial intelligence to reduce costs and exploring new revenue streams through initiatives like advertising and data analytics. These efforts have led to higher-margin revenue generation and revenue diversification.

Despite making strides in e-commerce, Walmart still faces challenges in this area, as it continues to narrow the gap with industry leader Amazon. The company’s e-commerce segment, while not yet profitable, is showing signs of improvement, with losses decreasing over time. Additionally, Sam’s Club, a subsidiary of Walmart, has demonstrated consistent growth and performance, signaling a successful turnaround for the division.

Looking ahead, Walmart’s valuation remains at a premium with a price-to-earnings (P/E) ratio of 30x expected ’25 fiscal EPS. However, the stock is trading at a lower multiple when considering cash flow per share, indicating potential value for investors. Despite the current valuation, analysts believe Walmart has the potential to reach $100 per share with its innovative “flywheel” strategy and focus on higher-margin revenue growth.

In recent years, Walmart has faced stiff competition from online retail giant Amazon, prompting the company to adopt various “omni-channel” strategies to enhance its market position. The evolving retail landscape has seen Walmart and Amazon moving closer in terms of strategy, with Walmart improving its e-commerce capabilities while Amazon explores physical retail strategies like Amazon Fresh.

Walmart’s ongoing initiatives in revenue diversification, artificial intelligence integration, and margin expansion position it favorably in the market. Investors are advised to consider buying opportunities on any potential pullbacks, as Walmart continues its growth trajectory in the retail sector.