Is it Too Late to Invest in Walmart (WMT)?

Walmart Inc (NYSE: WMT) is killing it. It’s been on an excellent run for the past year, with a 69.27% increase in share price over the last 12 months.

In the past few days, WMT has experienced a post-earnings surge and optimism that consumers will be looking to be more cost-conscious in the upcoming holiday season. 

It may have you wondering — did you miss your chance to invest?

Interestingly, while lower-income consumers seek to cut costs overall, WMT is courting higher-income consumers. It is also working further on its home delivery business and other considerations, such as its pharmacy offerings. 

However, just because a stock is doing well now doesn’t mean it’s the best option to invest in. Is it too late for investors to get in all WMT, given the recent surge in price? Is there no more room for growth?

Looking at the analyst opinions on the matter:

• Out of 29 analysts, 19 rate it as a strong buy, and nine rate it as a buy. Only one rates it a “hold,” and none of them are recommending selling WMT currently.
• Analysts often point to WMT’s investments in multiple channels and additional sectors as starting to pay off.
• Analysts also note WMT’s increased focus on higher-income groups and are optimistic as long as WMT shows some continued success with those demographics.

Furthermore, looking at the Zen Score (our Zen score is a shorthand for how good the fundamentals of a stock look):

• Overall, it has a respectable 45, higher than the industry average of 39.
• Specifically, it has very high scores in both the financials (71) and dividend (60) categories. WMT’s debt is not a huge concern for the company, and its dividends have increase over the last 10 years.
• Its weakest point is in valuation at 29, partially due to the fact that that it is trading above its intrinsic market value and might not be getting the best P/E compared to the rest of the market.

After reviewing the numbers and expert opinions, WMT is in a good position, though it may not have as much growth ahead of other stocks if the forecasts are to be believed. Yet, as a blue chip stock, WMT can add relative stability and regular dividend earnings to a portfolio.

However, there are potential things to watch out for. Tariffs on Chinese imports could deeply impact Wal-Mart. Consumer spending habits and trends may shift in the years to come. There could be issues with one of its newer business units. There is always some risk in a company the size and scope of WMT.

The Takeaway: Now is not necessarily a bad time to invest in WMT, but in the short term there might not be much growth ahead. Analysts still near-universally consider it a buy. If you’re looking for stability and a nice dividend, WMT might provide it in uncertain economic times.

No matter your current goals, though, Walmart will be one to watch. To get the information you need and expert analyst opinions, WallStreetZen Premium should be the first place you look. 

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