• If you are wondering whether Walmart at US$131.45 offers good value right now, the key is to separate a strong share price story from what the fundamentals say about the stock.
• The stock has returned 0.8% over the last week, 5.4% over the past month, 16.6% year to date and 34.9% over the last year, which naturally raises questions about how much of this performance is already reflected in today's price.
• Recent coverage has focused on Walmart's role as a major US consumer retailer and its position in a competitive sector. This provides useful context when thinking about why the stock is where it is today. Headlines around consumer demand, pricing power and market share often shape how investors think about risk and potential reward for companies like Walmart.
• Despite this performance, Walmart currently has a valuation score of 0 out of 6. The rest of this article will walk through standard valuation approaches and then finish with a method that can give an even clearer view of what the stock might be worth.

Walmart scores just 0/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.

Approach 1: Walmart Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow, or DCF, model estimates what a stock could be worth by projecting the company’s future cash flows and then discounting them back to today’s value using a required return.

For Walmart, the model used is a 2 Stage Free Cash Flow to Equity approach based on cash flow projections. The latest twelve month free cash flow is about $16.8b. Analyst and extrapolated estimates suggest free cash flow could reach $39.1b in 2031, with a series of annual projections in between that are discounted back to today using Simply Wall St’s assumptions.

Adding up all those discounted cash flows gives an estimated intrinsic value of about $126.01 per share in this model. With the stock trading at around $131.45, the DCF outcome suggests the share price is roughly 4.3% above this estimate, which points to a price that is close to, but slightly above, the modelled value.

Result: ABOUT RIGHT

Walmart is fairly valued according to our Discounted Cash Flow (DCF), but this can change at a moment's notice. Track the value in your watchlist or portfolio and be alerted on when to act.

Approach 2: Walmart Price vs Earnings

For profitable companies, the P/E ratio is a useful way to connect what you pay for the stock with the earnings the business is currently generating. It helps you see how many dollars of price you are paying for each dollar of earnings today.

What counts as a “normal” P/E depends on how the market views a company’s growth outlook and risk. Higher expected growth and lower perceived risk typically support a higher multiple, while slower growth or higher risk usually point to a lower one.

Walmart currently trades on a P/E of 47.86x. This is well above the Consumer Retailing industry average of 17.30x and also above the peer average of 24.62x. To give more tailored context, Simply Wall St calculates a Fair Ratio of 44.85x for Walmart. This proprietary metric estimates the P/E you might expect given factors such as the company’s earnings growth profile, industry, profit margins, market cap and key risks.

The Fair Ratio is more useful than a simple peer or industry comparison because it adjusts for Walmart’s specific characteristics rather than assuming all companies deserve similar multiples. Compared with this Fair Ratio, the current P/E of 47.86x is higher, suggesting the stock screens as overvalued on this basis.

Result: OVERVALUED

P/E ratios tell one story, but what if the real opportunity lies elsewhere? Start investing in legacies, not executives. Discover our 19 top founder-led companies.

Upgrade Your Decision Making: Choose your Walmart Narrative

Earlier it was mentioned that there is an even better way to understand valuation. This is where Narratives come in, giving you a simple way to write the story you believe about Walmart, link that story to your own assumptions for future revenue, earnings and margins, and translate it into a fair value that can be compared with the current share price.

A Narrative on Simply Wall St is your view of a company captured in numbers and words. Instead of only looking at a P/E of 47.86x versus an industry average of 17.30x, you set out what you think Walmart’s e commerce growth, AI driven efficiency and international expansion could mean for its profits, and the platform turns that into a forecast and an estimated fair value per share.

These Narratives live on the Community page, where millions of investors can create and update them. The fair values refresh automatically as new data comes in, such as the different Walmart Narratives already published that range from lower fair values around US$71 to higher fair values around US$137. These reflect very different stories about how much its margins, revenue and future P/E might support today’s price of about US$131.45.

For Walmart, however, we will make it really easy for you with previews of two leading Walmart Narratives:

Each one applies different assumptions to the same stock price of about US$131.45. This gives you a clear sense of how far apart fair value estimates can be and what would need to be true for each story to play out.

Fair value: US$136.56 per share

Price gap: about 3.7% below this narrative fair value based on the recent price of US$131.45

Revenue growth used in the narrative: 4.76% a year

• Assumes Walmart’s omni channel and AI efforts, including rapid delivery and customer facing tools, help support revenue growth and gradually higher profit margins.
• Relies on higher margin businesses like advertising, marketplace services and memberships, along with a larger international footprint, to support earnings resilience over time.
• Highlights risks around tariffs, logistics costs, wage and claims inflation and international execution that could limit margin expansion if they are not managed effectively.

Fair value: US$71.70 per share

Price gap: about 83.4% above this narrative fair value based on the recent price of US$131.45

Revenue growth used in the narrative: 4.4% a year

• Focuses on Walmart’s scale, automation program and multi cloud technology stack, but concludes that even with these factors, a lower future P/E multiple of 22x could be more appropriate.
• Builds in steady revenue growth and higher net margins, yet still arrives at a fair value that is well below the current share price once discounted using a 5.5% rate.
• Flags a long list of risks, including labor costs, competition in e commerce and automation, international expansion challenges, supply chain vulnerabilities and recent insider selling.

Taken together, these Narratives show how different assumptions about Walmart’s margin potential, required return and future P/E can lead to very different views of what US$131.45 per share represents.

Do you think there's more to the story for Walmart? Head over to our Community to see what others are saying!

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.