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In the ever-evolving and intensely competitive business landscape, conducting a thorough company analysis is of utmost importance for investors and industry followers. In this article, we will carry out an in-depth industry comparison, assessing Walmart (NYSE:WMT) alongside its primary competitors in the Consumer Staples Distribution & Retail industry. By meticulously examining key financial metrics, market positioning, and growth prospects, we aim to offer valuable insights to investors and shed light on company's performance within the industry.
Walmart serves as the preeminent retailer in the United States, with its strategy predicated on superior operating efficiency and offering the lowest priced goods to consumers to drive robust store traffic and product turnover. Walmart augmented its low-price business strategy by offering a convenient one-stop shopping destination with the opening of its first supercenter in 1988.Today, Walmart operates over 4,600 stores in the United States (5,200 including Sam's Club) and over 10,000 stores globally. Walmart generated over $440 billion in domestic namesake sales in fiscal 2024, with Sam's Club contributing another $86 billion to the firm's top line. Internationally, Walmart generated $115 billion in sales. The retailer serves around 240 million customers globally each week.
| Company | P/E | P/B | P/S | ROE | EBITDA (in billions) | Gross Profit (in billions) | Revenue Growth |
|---|---|---|---|---|---|---|---|
| Walmart Inc | 30.22 | 6.97 | 0.87 | 6.18% | $10.88 | $40.08 | 6.05% |
| Costco Wholesale Corp | 54.82 | 18.01 | 1.55 | 7.9% | $2.84 | $7.34 | 9.07% |
| Target Corp | 16.38 | 4.88 | 0.63 | 6.91% | $2.04 | $7.08 | -3.12% |
| Dollar General Corp | 18.59 | 4.01 | 0.71 | 5.28% | $0.78 | $2.99 | 6.11% |
| BJ's Wholesale Club Holdings Inc | 23.22 | 7.79 | 0.60 | 7.44% | $0.22 | $0.88 | 4.14% |
| Sendas Distribuidora SA | 22.25 | 3.30 | 0.23 | 1.29% | $1.15 | $2.8 | 14.08% |
| Pricesmart Inc | 19.05 | 2.19 | 0.49 | 3.6% | $0.08 | $0.22 | 13.11% |
| Almacenes Exito SA | 65.40 | 0.44 | 0.13 | -0.61% | $245.5 | $1321.95 | -3.32% |
| Average | 31.39 | 5.8 | 0.62 | 4.54% | $36.09 | $191.89 | 5.72% |
When closely examining Walmart, the following trends emerge:
The stock's Price to Earnings ratio of 30.22 is lower than the industry average by 0.96x, suggesting potential value in the eyes of market participants.
It could be trading at a premium in relation to its book value, as indicated by its Price to Book ratio of 6.97 which exceeds the industry average by 1.2x.
The Price to Sales ratio of 0.87, which is 1.4x the industry average, suggests the stock could potentially be overvalued in relation to its sales performance compared to its peers.
The Return on Equity (ROE) of 6.18% is 1.64% above the industry average, highlighting efficient use of equity to generate profits.
The company has lower Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $10.88 Billion, which is 0.3x below the industry average. This potentially indicates lower profitability or financial challenges.
With lower gross profit of $40.08 Billion, which indicates 0.21x below the industry average, the company may experience lower revenue after accounting for production costs.
With a revenue growth of 6.05%, which surpasses the industry average of 5.72%, the company is demonstrating robust sales expansion and gaining market share.
The debt-to-equity (D/E) ratio gauges the extent to which a company has financed its operations through debt relative to equity.
Considering the debt-to-equity ratio in industry comparisons allows for a concise evaluation of a company's financial health and risk profile, aiding in informed decision-making.
In terms of the Debt-to-Equity ratio, Walmart stands in comparison with its top 4 peers, leading to the following comparisons:
When comparing the debt-to-equity ratio, Walmart is in a stronger financial position compared to its top 4 peers.
The company has a lower level of debt relative to its equity, indicating a more favorable balance between the two with a lower debt-to-equity ratio of 0.79.
For Walmart, the PE ratio is low compared to peers, indicating potential undervaluation. The high PB and PS ratios suggest strong market sentiment and premium valuation. In terms of ROE, Walmart outperforms peers, reflecting efficient use of shareholder equity. However, the low EBITDA, gross profit, and high revenue growth may indicate operational challenges and potential for improvement in profitability.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
Posted In: WMT
