Walmart (WMT): Evaluating Valuation as Health and E-Commerce Moves Drive Analyst Optimism

Walmart (WMT) is making headlines with several strategic moves, including a major collaboration to provide Eli Lilly’s Zepbound obesity treatment at its pharmacies. These initiatives highlight the company’s expanding role in healthcare and its enhanced e-commerce capabilities.

See our latest analysis for Walmart.

Walmart’s momentum is clearly building, fueled by a run of retail partnerships, digital health launches, and strategic logistics moves that continue to keep it in the spotlight. The stock’s 23% total return over the past year outpaces most retail peers, reflecting upbeat sentiment around the company’s blend of steady expansion and bold moves into healthcare and e-commerce.

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But with so much optimism built into Walmart’s story right now, is the stock truly undervalued compared to its future potential? Or is robust growth already priced in by the market?

Most Popular Narrative: 9.7% Undervalued

Walmart’s widely followed narrative points to fair value notably above its last close of $102.59, sparking active debate on growth potential versus current price. With the most popular outlook calling for a fair value of $113.60, the underlying assumptions warrant a closer look.

Expansion of high-margin business streams, such as 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.

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Result: Fair Value of $113.60 (UNDERVALUED)

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

However, persistent challenges in controlling e-commerce losses and higher operating expenses could undermine Walmart’s profit momentum and have a negative impact on its long-term growth outlook.

Find out about the key risks to this Walmart narrative.

Another View: The Risk of Paying a Premium

On the other hand, when you compare Walmart’s current price-to-earnings ratio of 38.3x to the Consumer Retailing industry average of just 19.4x, as well as a fair ratio estimate of 35.4x, it looks decidedly expensive. That sizable gap means investors are paying a significant premium, raising the risk if growth expectations fall short. Could this crowded trade be set up for disappointment, or is market leadership worth paying up for?

Story Continues

See what the numbers say about this price — find out in our valuation breakdown.NYSE:WMT PE Ratio as at Nov 2025

Build Your Own Walmart Narrative

If you see Walmart’s story differently, or prefer to dive into the numbers yourself, shape your own outlook 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.

Companies discussed in this article include WMT.

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