In the dynamic and fiercely competitive business environment, conducting a thorough analysis of companies is crucial for investors and industry enthusiasts. In this article, we will perform an extensive industry comparison, evaluating Walmart WMT in relation to its major competitors in the Consumer Staples Distribution & Retail industry. By closely examining crucial financial metrics, market position, and growth prospects, we aim to offer valuable insights for investors and shed light on company's performance within the industry.
Walmart Background
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 | 30.05 | 6.93 | 0.86 | 6.18% | $10.88 | $40.08 | 6.05% |
| Costco Wholesale Corp | 50.56 | 16.61 | 1.43 | 7.9% | $2.84 | $7.34 | 9.07% |
| Target Corp | 16.40 | 4.89 | 0.64 | 6.91% | $2.04 | $7.08 | -3.12% |
| Dollar General Corp | 17.25 | 3.72 | 0.66 | 5.28% | $0.78 | $2.99 | 6.11% |
| BJ's Wholesale Club Holdings Inc | 22.89 | 7.68 | 0.59 | 7.44% | $0.22 | $0.88 | 4.14% |
| Pricesmart Inc | 21.04 | 2.42 | 0.54 | 2.96% | $0.07 | $0.21 | 12.11% |
| Sendas Distribuidora SA | 19.14 | 2.83 | 0.19 | 1.29% | $1.15 | $2.8 | 14.08% |
| Almacenes Exito SA | 65.41 | 0.44 | 0.13 | -0.61% | $245.5 | $1321.95 | -3.32% |
| Average | 30.38 | 5.51 | 0.6 | 4.45% | $36.09 | $191.89 | 5.58% |
After a detailed analysis of Walmart, the following trends become apparent:
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With a Price to Earnings ratio of 30.05, which is 0.99x less than the industry average, the stock shows potential for growth at a reasonable price, making it an interesting consideration for market participants.
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With a Price to Book ratio of 6.93, which is 1.26x the industry average, Walmart might be considered overvalued in terms of its book value, as it is trading at a higher multiple compared to its industry peers.
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The stock's relatively high Price to Sales ratio of 0.86, surpassing the industry average by 1.43x, may indicate an aspect of overvaluation in terms of sales performance.
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The company has a higher Return on Equity (ROE) of 6.18%, which is 1.73% above the industry average. This suggests efficient use of equity to generate profits and demonstrates profitability and growth potential.
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The Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $10.88 Billion is 0.3x below the industry average, suggesting potential lower profitability or financial challenges.
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The company has lower gross profit of $40.08 Billion, which indicates 0.21x below the industry average. This potentially indicates lower revenue after accounting for production costs.
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The company is experiencing remarkable revenue growth, with a rate of 6.05%, outperforming the industry average of 5.58%.
Debt To Equity Ratio
The debt-to-equity (D/E) ratio helps evaluate the capital structure and financial leverage of a company.
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:
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When considering the debt-to-equity ratio, Walmart exhibits a stronger financial position compared to its top 4 peers.
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This indicates that the company has a favorable balance between debt and equity, with a lower debt-to-equity ratio of 0.79, which can be perceived as a positive aspect by investors.
Key Takeaways
For Walmart, the PE ratio is low compared to peers, indicating potential undervaluation. The high PB and PS ratios suggest strong investor confidence in the company's assets and sales. In terms of ROE, Walmart outperforms peers, reflecting efficient use of shareholder equity. However, the low EBITDA and gross profit figures may indicate operational challenges. The high revenue growth rate highlights Walmart's strong sales performance relative to industry competitors.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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