Is Walmart Inc. (WMT) overvalued?
On Equity Rank's model estimate, WMT trades 50% above its fair value. Walmart Inc. (WMT) last closed at $125.52; the multi-method model fair value is $83.91.
| Price | Model fair value | Price vs model |
|---|---|---|
| $125.52 | $83.91 | 50% above |
What the answer rests on
- 0 of 9 valuation methods put WMT's value above its price and 9 put it below, so the methods mostly agree.
- To justify today's price, WMT's free cash flow would need to grow about 16.7% a year for ten years (a reverse discounted cash flow). Over the last three years it actually grew 6.8% a year.
- WMT trades at 45.2 times its last year's earnings, against a median of 21.1 for 7 profitable Discount Retail companies.
- Over the past year the price sat below the model fair value on 3% of trading days. The gap ranged from 4% below to 52% above the model fair value.
Read this before relying on it
The model fair value is an estimate from published financial statements. It is not a forecast of where the price goes, and it can be wrong. Within 10% either side we call it close to fair value: valuation models are not precise enough to read more into a smaller gap. Our own lists have no proven edge over the market yet; the live record shows every result, misses included.
Every valuation method behind WMT's fair value · What prices assume · Other companies