Investment Thesis
Walmart demonstrates solid fundamental strength with robust profitability (22% ROE, 7.7% ROA) and exceptional cash generation ($41.6B operating cash flow) despite modest revenue growth of 1.0% YoY. The company maintains healthy interest coverage (12.9x) and conservative leverage (0.38x debt/equity), though tight liquidity ratios warrant monitoring as operational efficiency remains critical in the competitive retail environment.
WMT Strengths
- Exceptional return on equity (22.0%) and return on assets (7.7%) demonstrate efficient capital deployment
- Strong operating cash flow generation ($41.6B) with solid free cash flow ($14.9B) supporting dividends and reinvestment
- Conservative leverage profile (0.38x debt/equity) with comfortable interest coverage (12.9x)
- Diluted EPS growth of 13.3% YoY despite net income decline suggests effective share repurchase strategy
WMT Risks
- Deteriorating liquidity position with current ratio (0.79x) and quick ratio (0.24x) below typical retail benchmarks, indicating potential working capital pressure
- Revenue growth stalled at 1.0% YoY while net income declined 1.7% YoY, signaling challenging demand environment and margin compression
- Net margin of only 3.1% leaves minimal room for cost inflation or competitive pressures in the commoditized retail sector
Key Metrics to Watch
- Operating cash flow trend and free cash flow sustainability as capital expenditure needs may increase
- Revenue growth acceleration and same-store sales trends to assess competitive positioning
- Liquidity ratios and working capital management, particularly inventory turnover and accounts payable dynamics
WMT Financial Metrics
Revenue
$713.2B
Net Income
$21.9B
EPS (Diluted)
$2.73
Free Cash Flow
$14.9B
Total Assets
$284.7B
Cash Position
$10.7B
WMT Profitability Ratios
Gross Margin
N/A
Operating Margin
4.2%
Net Margin
3.1%
ROE
22.0%
ROA
7.7%
FCF Margin
2.1%
WMT Balance Sheet & Liquidity
Current Ratio
0.79x
Quick Ratio
0.24x
Debt/Equity
0.38x
Debt/Assets
0.0%
Interest Coverage
12.87x
Long-term Debt
$38.2B
Disclaimer: This analysis is generated by Claude AI based on publicly available SEC EDGAR filings.
It does not include stock price data and should not be considered financial advice.
All fundamental data is sourced from SEC public domain filings.
Always conduct your own research and consult with a qualified financial advisor before making investment decisions.
Data Source: SEC EDGAR |
Analysis Date: Mar 18, 2026 |
Data as of: 2026-01-31 |
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