Walmart (WMT) will report fiscal first-quarter earnings Thursday morning before the market opens, with investors increasingly debating whether the company’s fundamentals still justify one of the richest valuations anywhere in large-cap retail. Few companies have executed better operationally over the past several years than Walmart. The retailer has consistently gained market share, expanded margins, accelerated e-commerce growth, built out high-margin advertising and membership businesses, and transformed itself into what many investors increasingly view as a technology-enabled retail platform rather than simply a traditional big-box chain. The problem for investors now is that the stock price already reflects much of that success. Walmart shares have surged roughly 140% since early 2024 and now trade near record highs, leaving the market wrestling with whether the company can continue delivering enough growth to support its premium multiple.
Consensus expectations heading into the quarter call for revenue between roughly $174.4 billion and $175 billion alongside adjusted earnings per share between $0.65 and $0.66. That would represent approximately 5%-6% revenue growth and roughly 6%-7% earnings growth year-over-year. Analysts are also forecasting comparable sales growth in the core Walmart U.S. segment between 3.5% and 3.8%, while e-commerce growth is expected to remain extremely strong at roughly 22%-24%.
Those growth numbers are objectively impressive given Walmart’s enormous scale. The company already generates nearly $700 billion in annual revenue, making sustained mid-single-digit growth increasingly difficult. Walmart has continued gaining share across income cohorts as inflation, higher fuel prices, and economic uncertainty push consumers toward value-oriented retailers. Analysts broadly agree that Walmart’s price leadership, scale advantages, and omnichannel convenience continue separating it from competitors.
Still, the core debate surrounding Walmart is no longer about operational quality. It is about valuation.
Walmart currently trades around 44x-45x forward earnings, a multiple that sits above many large-cap technology companies and dramatically above most traditional retailers. For comparison, Target (TGT) trades near 15x forward earnings, Kroger (KR) trades near 13x, and even consumer staples giant Procter & Gamble (PG) trades closer to 20x earnings. More strikingly, Walmart’s valuation now sits above several major technology leaders including Microsoft (MSFT), Apple (AAPL), and even NVIDIA (NVDA) on certain forward metrics.
That disconnect has become one of the most controversial debates on Wall Street.
Bulls argue Walmart deserves its premium because the company has evolved far beyond a low-margin retailer. E-commerce now accounts for approximately 21% of total company sales after growing at least 19% annually for three consecutive years. Walmart’s advertising business is also scaling rapidly, with ad revenue growing approximately 46% last fiscal year. Analysts increasingly compare Walmart’s evolving ecosystem to a hybrid between Amazon and Costco rather than a traditional discount retailer.
Walmart’s growing mix of higher-margin businesses has become especially important to the bullish thesis. Membership revenue, marketplace fees, advertising, fulfillment services, automation, and AI-driven commerce are all helping improve profitability while creating a more durable earnings model. Raymond James recently highlighted Walmart’s “profit mix shift” toward advertising, marketplace, and membership as one of the company’s most important long-term margin expansion opportunities.
The company’s most recent quarter reinforced many of those trends.
During fiscal Q4, Walmart reported constant-currency revenue growth of 4.9% while adjusted operating income increased 10.5%. E-commerce sales climbed 24%, and all three major business segments grew profits faster than sales. Inventory management also remained disciplined, with inventory increasing just 2.6% against nearly 5% sales growth. Those metrics helped reinforce investor confidence that Walmart continues executing at an extremely high level operationally.
The key segments investors will watch closely Thursday include Walmart U.S., Sam’s Club, International, e-commerce, advertising, and membership growth.
Walmart U.S. remains the company’s core earnings engine, and investors will focus heavily on comparable sales growth, transaction counts, ticket size, grocery share gains, and general merchandise performance. Analysts broadly expect Walmart to continue benefiting from “trade-down” behavior as consumers seek value amid elevated inflation and gasoline prices. Oppenheimer said it expects Walmart to deliver at least 3.5% comparable sales growth in Walmart U.S. despite diesel cost pressures.
E-commerce remains perhaps the most important long-term growth driver. Walmart has aggressively invested in delivery infrastructure, store fulfillment, automation, AI tools, and marketplace expansion. Investors will watch whether digital sales growth remains above 20% and whether improving e-commerce economics continue supporting margins. Walmart’s ability to profitably scale e-commerce has become one of the major reasons the stock has rerated so dramatically higher over the past two years.
Advertising and memberships are also receiving growing investor attention.
The company’s advertising platform and Walmart+ membership ecosystem are increasingly viewed as high-margin profit engines that could materially improve Walmart’s overall profitability profile over time. Analysts believe these businesses may eventually resemble Amazon’s advertising and Prime ecosystem on a smaller scale. Several firms, including Guggenheim and KeyBanc, specifically cited these “alternative profit streams” as reasons Walmart deserves a higher valuation multiple than traditional retailers.
Still, despite the strong operational backdrop, several risks remain.
The most obvious concern is simply whether Walmart’s valuation has become too stretched relative to its actual growth rate. Critics note that while Walmart is growing steadily, the company is still fundamentally producing low- to mid-single-digit revenue growth. Paying 45x earnings for a mature retailer growing revenue roughly 4%-6% annually creates very little margin for disappointment.
Fuel costs also remain an overhang. Several analysts noted that elevated diesel prices likely pressured margins during the quarter and could continue impacting profitability throughout the year. Oppenheimer expects Walmart to likely reaffirm rather than raise full-year guidance partly because of fuel-related uncertainty.
Tariffs, technology spending, and automation investments also remain important variables. Walmart continues investing aggressively in AI infrastructure, supply chain automation, delivery speed, and digital personalization tools. While those investments may strengthen the company long term, they also create near-term pressure on operating expenses.
Technically, the stock remains in a strong long-term uptrend despite recent consolidation. Several analysts noted Walmart appears to be building a range roughly between $117 and $135, with a breakout above the upper end potentially opening the door for another leg higher. Options markets currently imply approximately a 5% move following earnings, meaning traders are preparing for meaningful volatility despite Walmart’s reputation as a defensive retail name.
Ultimately, Walmart’s earnings may become less about whether the company is executing well — because it clearly is — and more about whether near-perfect execution is already fully reflected in the stock price. Investors broadly expect strong fundamentals, continued market-share gains, healthy e-commerce growth, and expanding higher-margin businesses. The challenge is that expectations and valuation are now both extraordinarily high. For Walmart to continue outperforming, management may need to prove the company deserves to be valued less like a retailer and more like a scaled technology and platform business.