Walmart (WMT) Stock: Growth Momentum, Valuation Debate, and What Investors Are Watching Next
Walmart Inc. (NYSE: WMT) has emerged as one of the most resilient and closely watched stocks in the consumer retail space. While traditionally seen as a defensive name, recent performance shows a company that is steadily transforming into a more diversified, technology-enabled growth story. At the same time, investor activity and valuation metrics are sparking debate about how much upside remains.
This article explores Walmart’s recent stock performance, valuation arguments, institutional and insider activity, earnings strength, and the differing viewpoints shaping investor sentiment.
advertisement
Strong Share Price Performance and Long-Term Returns
Walmart shares have delivered solid gains in 2025, rising roughly 27% year-to-date and about 12% over the past three months. Trading around $114 per share, the stock has also produced a five-year total shareholder return exceeding 150%, rewarding long-term investors and outperforming many traditional retail peers.
Short-term momentum has been notable as well, with a one-month return of nearly 14%. This steady climb reflects both consistent execution and growing confidence in Walmart’s evolving business model.
Is Walmart Still Undervalued? Two Competing Views
The “Modestly Undervalued” Perspective
According to valuation models cited by Simply Wall St, Walmart’s fair value is estimated near $119 per share, suggesting the stock is about 4–5% undervalued at current levels. Supporters of this view argue that Walmart’s transformation beyond pure retail is not fully reflected in its price.
Key drivers behind this optimism include the expansion of higher-margin business lines such as Walmart Connect advertising, third-party marketplace services, and Walmart+ memberships. Advertising revenue has been growing rapidly on a global basis, while membership income continues to rise steadily. These businesses are gradually reshaping Walmart’s profit mix, lifting margins and supporting more durable earnings growth.
From this perspective, Walmart is no longer just a mature retailer, but a company increasingly modeled like a long-term compounder with diversified income streams.
advertisement
The “Rich Valuation” Counterargument
A more cautious view points to Walmart’s elevated valuation multiples. With the stock trading near 40 times earnings, Walmart sits well above the broader U.S. consumer retail average and even above many peers. Critics argue that such a premium leaves little margin for error, especially in an environment where wage inflation, regulatory uncertainty, and intense online competition could pressure profitability.
This camp sees Walmart as a high-quality business, but questions whether the current price already reflects much of the expected growth.
Institutional Investors: Accumulation Continues
Despite valuation concerns, institutional interest in Walmart remains strong. Several investment firms significantly increased their positions during the third quarter:
Perpetual Ltd boosted its stake by more than 400%, bringing its holdings to nearly 50,000 shares.
Central Bank & Trust Co. increased its position by over 36%, with holdings valued at approximately $4.37 million.
Other firms, including Brighton Jones, AlphaQuest, and CW Advisors, also added meaningfully to their positions.
Overall, about 26.76% of Walmart’s shares are held by institutional investors and hedge funds. This steady accumulation suggests continued confidence in Walmart’s long-term strategy, even as short-term price fluctuations persist.
Insider and Major Shareholder Selling: A Different Signal
In contrast to institutional buying, recent months have seen notable insider and major-holder selling. Executives including CEO C. Douglas McMillon and several senior vice presidents have sold small portions of their holdings. Over the past 90 days, insiders have sold roughly 127,800 shares worth about $13.7 million.
Additionally, the Walton Family Holdings Trust reportedly sold approximately $30.1 million worth of Walmart stock. While these sales represent a small percentage of total ownership, they have added near-term supply to the market and contributed to cautious sentiment among some investors.
Sources generally agree that this selling does not indicate operational weakness, but rather portfolio management and diversification decisions. Still, it remains a factor traders are closely monitoring.
Earnings Strength and Forward Guidance Support the Bull Case
Walmart’s most recent quarterly results reinforced its operational strength. The company reported earnings per share of $0.62, beating expectations, while revenue reached $179.5 billion, also ahead of forecasts. Revenue grew nearly 6% year over year, highlighting Walmart’s ability to gain share even in a challenging consumer environment.
Looking ahead, management set fiscal 2026 earnings guidance in the range of $2.58 to $2.63 per share. Analysts currently expect earnings around $2.55, suggesting room for upside if execution remains strong.
Walmart’s balance sheet metrics, including moderate leverage and stable liquidity ratios, further support confidence in its financial resilience.
advertisement
Analyst Sentiment: Broad Support With Varied Targets
Wall Street analysts remain broadly constructive on Walmart. The stock currently carries an average rating of Moderate Buy, with price targets clustering between $120 and $130. Some firms emphasize Walmart’s ecommerce expansion, marketplace growth, and exposure to digital payments and fintech initiatives as reasons for higher long-term valuations.
Others maintain more conservative targets, reflecting caution around valuation and cost pressures. Together, these views underline a consensus that Walmart is a strong business, even if opinions differ on near-term upside.
Conclusion: A Defensive Giant Evolving Into a Growth Platform
Walmart’s story in 2025 is no longer just about scale and low prices. It is about transformation. The company is leveraging its unmatched physical footprint, digital platforms, and growing ecosystem of services to build a more diversified and resilient business.
While valuation concerns and insider selling may create short-term noise, strong earnings execution, institutional accumulation, and expanding high-margin revenue streams continue to strengthen Walmart’s long-term investment case. For investors seeking a blend of stability and innovation, Walmart stands as a compelling example of how a legacy retailer can adapt, evolve, and remain relevant in a rapidly changing market.
Sources
Simply Wall St – Is Walmart (WMT) Still Undervalued After Its Recent Share Price Rally?
https://simplywall.st/stocks/us/consumer-retailing/nasdaq-wmt/walmart/news/is-walmart-wmt-still-undervalued-after-its-recent-share-pric/ampMarketBeat – Walmart Inc. Shares Sold by Bartlett & Co. Wealth Management LLC
https://www.marketbeat.com/instant-alerts/filing-walmart-inc-wmt-shares-sold-by-bartlett-co-wealth-management-llc-2025-12-21/MarketBeat – Perpetual Ltd Has $5.14 Million Stock Holdings in Walmart Inc.
https://www.marketbeat.com/instant-alerts/filing-perpetual-ltd-has-514-million-stock-holdings-in-walmart-inc-wmt-2025-12-21/MarketBeat – Central Bank & Trust Co. Has $4.37 Million Stock Position in Walmart Inc.
https://www.marketbeat.com/instant-alerts/filing-central-bank-trust-co-has-437-million-stock-position-in-walmart-inc-wmt-2025-12-21/
Thank you !
