To understand whether Walmart stock still offers value at current levels, you need to look past the brand and focus on what the price is actually implying about future cash flows and risks.

Walmart shares closed at US$117.18, with the stock up 3.9% year to date and 24.3% over the past year, although the price has declined 2.8% over the last week and 12.7% over the last month. These shifts can change how the market views both its upside and risk.

Recent news coverage has focused on Walmart's position in U.S. consumer spending and its ongoing role in essential retail. This helps frame how investors think about its resilience when sentiment shifts. At the same time, broader discussions around consumer habits and competition in retail have kept Walmart in the spotlight for both long term investors and shorter term traders.

On Simply Wall St's valuation checks, Walmart scores just 1 out of 6 for being undervalued. The next sections will break down what that means across different valuation approaches, and then look at a broader way to think about value that ties these methods together.

Walmart scores just 1/6 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 model takes estimates of a company’s future cash flows, then discounts them back to today to estimate what the whole business might be worth in present value terms. For Walmart, this 2 Stage Free Cash Flow to Equity model is built around projected free cash flows in $ and a required return for shareholders.

Walmart’s latest twelve month free cash flow is about $15.2b. The model uses analyst and extrapolated projections that run out to 2035, including a forecast free cash flow of $23.8b in 2030. Earlier years, such as 2026 and 2027, are based on analyst inputs, while the later years are extrapolated by Simply Wall St rather than based on direct analyst coverage.

When all of these projected cash flows are discounted back, the model produces an estimated intrinsic value of $92.86 per share. Compared with the recent share price of $117.18, this implies the stock is about 26.2% above the model’s estimate of fair value. On this view, Walmart appears expensive rather than cheap.

Result: OVERVALUED

Our Discounted Cash Flow (DCF) analysis suggests Walmart may be overvalued by 26.2%. Discover 45 high quality undervalued stocks or create your own screener to find better value opportunities.

Approach 2: Walmart Price vs Earnings

For a profitable company like Walmart, the P/E ratio is a straightforward way to think about what you are paying for each dollar of current earnings. It is widely used because it connects directly to the bottom line that ultimately supports shareholder returns.

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

Walmart currently trades on a P/E of 41.02x. That is above the Consumer Retailing industry average of 18.62x and also above the peer group average of 24.50x. Simply Wall St’s Fair Ratio for Walmart is 44.44x, which is its view of what a justified P/E might be given factors like earnings growth, profit margins, industry, market cap and company specific risks. Because the Fair Ratio is tailored to Walmart’s own profile, it can be more informative than a simple comparison with peers or the broad industry that may have very different characteristics.

On this measure, Walmart’s actual P/E of 41.02x sits below the Fair Ratio of 44.44x, which points to the stock being undervalued on this metric.

Result: UNDERVALUED

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Upgrade Your Decision Making: Choose your Walmart Narrative

Earlier it was mentioned that there is an even better way to understand valuation, and on Simply Wall St this comes through Narratives. These let you attach a clear story about Walmart to your numbers by turning your view on future revenue, earnings and margins into a forecast. You can then link that forecast to a fair value, and continuously update it as news and earnings arrive. This allows you to compare your Fair Value with the live price and see, for example, how one investor might build a Walmart Narrative around physical stores, Walmart+ and drone delivery with a fair value of about US$130 per share. Another investor might focus on AI, omni channel growth and higher margin profit pools and arrive at a different fair value of about US$138. All of this is available within an easy to use Community page that helps you decide how those stories line up with your own expectations.

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.