Walmart Stock: Buy, Sell, Or Hold?

By Daniel Sparks – Mar 17, 2026 at 3:05PM EST

Key Points

Walmart’s digital and advertising revenue streams are climbing rapidly.
The retailer provided a conservative financial forecast for the upcoming fiscal year.
s trade at a steep valuation assuming near-perfect execution over the next decade.

Momentum in high-margin revenue

Walmart’s latest earnings report shows why investors have been buying the stock over the last year (it’s up more than 40% in 12 months). For the fiscal fourth quarter ended Jan. 31, total revenue climbed 5.6% year over year to $190.7 billion. And, in the U.S. market, comparable-store sales (excluding fuel) advanced a healthy 4.6%.

Fueling its strong comparable-store sales growth, U.S. customer transactions were up 2.6%, a clear signal that the retailer is continuing to win actual foot traffic and market .

The real narrative, however, is the structural improvement in Walmart’s revenue mix. Digital sales during the quarter skyrocketed 24% year over year and now account for nearly a quarter of the company’s total top line. A major catalyst here was store-fulfilled expedited delivery, which jumped 50%.

On top of the e-commerce gains, Walmart’s high-margin advertising unit expanded by 37% globally. And the membership segment saw fee revenue rise 15.1%.

Because digital ads and membership fees carry significantly higher margins than traditional groceries, this evolving mix is supercharging Walmart’s bottom line. Constant-currency adjusted operating income jumped 10.5% in the quarter, easily outpacing total sales growth.

A measured forecast

Despite the fourth-quarter strength, management’s forward-looking commentary struck a more cautious tone.

Looking ahead to fiscal 2027, Walmart said it expects its constant-currency net sales to rise between 3.5% and 4.5%. That represents a noticeable deceleration from the holiday quarter’s pace.

And the company’s profit outlook was similarly restrained, with management forecasting full-year adjusted earnings per to land between $2.75 and $2.85. The midpoint of this guidance range translates to a year-over-year growth rate of just 6%.

However, Walmart chief financial officer John Rainey noted that this measured approach to its outlook isn’t unthe approach it’s taken to guidance “in past years…”

“I think it’s prudent to be somewhat balanced,” Rainey noted.

While the chief financial officer said that the management team remains constructive on the economy, he did say there are some concerning macroeconomic indicators out there, “whether it be a hiring recession or maybe subdued consumer sentiment, student loan delinquencies, things that, that would make you want to be more balanced as you sit here at this point in time.”

The valuation hurdle

Overall, Walmart is executing brilliantly even in an uncertain macroeconomic backdrop. But the market has already rewarded the stock accordingly.

As of this writing, Walmart trades at a price-to-earnings ratio of about 46.

That is an aggressive price-to-earnings multiple for a mature retailer — one that assumes uninterrupted, compounding earnings for the foreseeable future. More specifically, a valuation this assumes Walmart will be able to simultaneously defend its core grocery business while maintaining double-digit growth in its membership fee income and advertising businesses.

In short, investors are left without a margin of safety at today’s valuation. If consumer spending falters or the transition toward higher-margin revenue streams hits a speed bump, the stock could easily suffer a valuation multiple contraction even if the underlying business remains highly profitable.

Walmart Stock Quote

NASDAQ: WMT

Walmart

Today’s Change

(-0.84%) $-1.05

Current Price

$124.94

Key Data Points

Market Cap

$1.0T

Day’s Range

$124.90 – $127.19

52wk Range

$79.81 – $134.69

Volume

597K

Avg Vol

31M

Gross Margin

23.41%

Dividend Yield

0.75%

So, is Walmart stock a buy, sell, or hold?

I view Walmart stock as a hold. Sure, current holders have little reason to rush to the exits. The company is generating staggering amounts of cash — nearly $15 billion in free cash flow last year — and it also pays a dividend.

However, deploying new capital into the stock at this pricey valuation arguably looks too risky. I would much prefer to wait for a potential pullback in the stock price — one that offers a chance to buy s at a more reasonable valuation, where the price better accounts for the possibility of occasional economic headwinds or other unexpected setbacks.