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Tuesday, August 17: Walmart released its quarterly earnings today, which showed second-quarter earnings that largely exceeded Wall Street’s predictions for the retail giant.
According to the company, sales of luggage, party supplies and clothing went up after stores started reopening earlier this quarter. Walmart also gained market share in grocery, one of its main businesses.
Analysts expected quarterly revenue to be $137.17 billion, while the company reported a quarterly revenue of $141.05 billion. Shares closed down 0.03% at $150.70/share at market-close.
Walmart Inc (WMT) is a leading discount stores business based in the US. It opened the day at USD$146.58 after a previous close of USD$146. During the day the price has varied from a low of USD$145.84 to a high of USD$146.915. The latest price was USD$146.81 (25 minute delay). Walmart is listed on the NYSE and employs 2,300,000 staff. All prices are listed in US Dollars.
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Since the stock market crash in March caused by coronavirus, Walmart's stock price has had significant positive movement.
Its last market close was $146.81, which is 19.23% up on its pre-crash value of $118.58 and 43.93% up on the lowest point reached during the March crash when the stocks fell as low as $102.
If you had bought $1,000 worth of Walmart stocks at the start of February 2020, those stocks would have been worth $999.95 at the bottom of the March crash, and if you held on to them, then as of the last market close they'd be worth $1,284.59.
| Open | $146.58 |
|---|---|
| High | $146.92 |
| Low | $145.84 |
| Close | $146.81 |
| Previous close | $146.00 |
| Change | $0.81 |
| Change % | 0.5548% |
| Volume | 4,469,140 |
| 52-week range | $124.80 - $152.57 |
|---|---|
| 50-day moving average | $142.90 |
| 200-day moving average | $141.78 |
| Wall St. target price | $168.82 |
| PE ratio | 39.5581 |
| Dividend yield | $2.18 (1.56%) |
| Earnings per share (TTM) | $3.55 |
Note: The dollar amounts in the table below are in Canadian dollars.
Historical closes compared with the close of $146.81 from 2021-10-21
| 1 week (2021-10-15) | 4.45% |
|---|---|
| 1 month (2021-09-22) | 2.89% |
| 3 months (2021-07-22) | 3.92% |
| 6 months (2021-04-22) | 5.11% |
| 1 year (2020-10-22) | 2.27% |
|---|---|
| 2 years (2019-10-22) | 22.77% |
| 3 years (2018-10-22) | 51.13% |
| 5 years (2016-10-21) | 114.82% |
Valuing Walmart stock is incredibly difficult, and any metric has to be viewed as part of a bigger picture of Walmart's overall performance. However, analysts commonly use some key metrics to help gauge the value of a stock.
Walmart's current share price divided by its per-share earnings (EPS) over a 12-month period gives a "trailing price/earnings ratio" of roughly 40x. In other words, Walmart shares trade at around 40x recent earnings.
That's relatively high compared to, say, the trailing 12-month P/E ratio for the NASDAQ 100 at the end of 2019 (27.29). The high P/E ratio could mean that investors are optimistic about the outlook for the shares or simply that they're over-valued.
Walmart's "price/earnings-to-growth ratio" can be calculated by dividing its P/E ratio by its growth – to give 3.1766. A low ratio can be interpreted as meaning the shares offer better value, while a higher ratio can be interpreted as meaning the shares offer worse value.
The PEG ratio provides a broader view than just the P/E ratio, as it gives more insight into Walmart's future profitability. By accounting for growth, it could also help you if you're comparing the share prices of multiple high-growth companies.
Walmart's EBITDA (earnings before interest, taxes, depreciation and amortisation) is $40.4 billion.
The EBITDA is a measure of a Walmart's overall financial performance and is widely used to measure a its profitability.
| Revenue TTM | $566.1 billion |
|---|---|
| Operating margin TTM | 5.22% |
| Gross profit TTM | $138.8 billion |
| Return on assets TTM | 7.76% |
| Return on equity TTM | 12.32% |
| Profit margin | 1.78% |
| Book value | $28.85 |
| Market capitalisation | $391.9 billion |
TTM: trailing 12 months
There are currently 14.4 million Walmart shares held short by investors – that's known as Walmart's "short interest". This figure is 17.2% down from 17.3 million last month.
There are a few different ways that this level of interest in shorting Walmart shares can be evaluated.
Walmart's "short interest ratio" (SIR) is the quantity of Walmart shares currently shorted divided by the average quantity of Walmart shares traded daily (recently around 7.2 million). Walmart's SIR currently stands at 2. In other words for every 100,000 Walmart shares traded daily on the market, roughly 2000 shares are currently held short.
However Walmart's short interest can also be evaluated against the total number of Walmart shares, or, against the total number of tradable Walmart shares (the shares that aren't held by "insiders" or major long-term shareholders – also known as the "float"). In this case Walmart's short interest could be expressed as 0.01% of the outstanding shares (for every 100,000 Walmart shares in existence, roughly 10 shares are currently held short) or 0.0099% of the tradable shares (for every 100,000 tradable Walmart shares, roughly 10 shares are currently held short).
Such a low SIR usually points to an optimistic outlook for the share price, with fewer people currently willing to bet against Walmart.
Environmental, social and governance (known as ESG) criteria are a set of three factors used to measure the sustainability and social impact of companies like Walmart.
When it comes to ESG scores, lower is better, and lower scores are generally associated with lower risk for would-be investors.
Total ESG risk: 33.72
Socially conscious investors use ESG scores to screen how an investment aligns with their worldview, and Walmart's overall score of 33.72 (as at 01/01/2019) is nothing to write home about – landing it in it in the 55th percentile of companies rated in the same sector.
ESG scores are increasingly used to estimate the level of risk a company like Walmart is exposed to within the areas of "environmental" (carbon footprint, resource use etc.), "social" (health and safety, human rights etc.), and "governance" (anti-corruption, tax transparency etc.).
Environmental score: 6.47/100
Walmart's environmental score of 6.47 puts it squarely in the 6th percentile of companies rated in the same sector. This could suggest that Walmart is a leader in its sector terms of its environmental impact, and exposed to a lower level of risk.
Social score: 20.6/100
Walmart's social score of 20.6 puts it squarely in the 6th percentile of companies rated in the same sector. This could suggest that Walmart is a leader in its sector when it comes to taking good care of its workforce and the communities it impacts.
Governance score: 11.14/100
Walmart's governance score puts it squarely in the 6th percentile of companies rated in the same sector. That could suggest that Walmart is a leader in its sector when it comes to responsible management and strategy, and exposed to a lower level of risk.
Controversy score: 4/5
ESG scores also evaluate any incidences of controversy that a company has been involved in. Walmart scored a 4 out of 5 for controversy – the second-lowest score possible, reflecting that Walmart has a damaged public profile.
Dividend payout ratio: 35.32% of net profits
Recently Walmart has paid out, on average, around 35.32% of net profits as dividends. That has enabled analysts to estimate a "forward annual dividend yield" of 1.57% of the current stock value. This means that over a year, based on recent payouts (which are sadly no guarantee of future payouts), Walmart shareholders could enjoy a 1.57% return on their shares, in the form of dividend payments. In Walmart's case, that would currently equate to about $2.18 per share.
While Walmart's payout ratio might seem fairly standard, it's worth remembering that Walmart may be investing much of the rest of its net profits in future growth.
Walmart's most recent dividend payout was on 3 January 2022. The latest dividend was paid out to all shareholders who bought their shares by 9 December 2021 (the "ex-dividend date").
Walmart's shares were split on a 2:1 basis on 20 April 1999. So if you had owned 1 share the day before before the split, the next day you'd have owned 2 shares. This wouldn't directly have changed the overall worth of your Walmart shares – just the quantity. However, indirectly, the new 50% lower share price could have impacted the market appetite for Walmart shares which in turn could have impacted Walmart's share price.
Over the last 12 months, Walmart's shares have ranged in value from as little as $124.8037 up to $152.57. A popular way to gauge a stock's volatility is its "beta".
Beta is a measure of a share's volatility in relation to the market. The market (NYSE average) beta is 1, while Walmart's is 0.5016. This would suggest that Walmart's shares are less volatile than average (for this exchange).
Walmart Inc. engages in the operation of retail, wholesale, and other units worldwide. The company operates through three segments: Walmart U. S. , Walmart International, and Sam's Club. It operates supercenters, supermarkets, hypermarkets, warehouse clubs, cash and carry stores, and discount stores; membership-only warehouse clubs; ecommerce websites, such as walmart. com, walmart.
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