WMT is not a buy due to high valuation (37 forward P/E), despite strong underlying earnings quality.

there's a stock and this stock is named Walmart. Now, I don't personally own Walmart stock, but it was interesting because yesterday it was all in the news. Walmart stock tumbles 9%.

Biggest downward move in years. All these sorts of things, right? Just a lot of negativity around this particular stock.

Now, if you, you know, if you've gotten to a stage where you know a little bit about stocks, you're going to know what's going on here with this company. You're going to know to go to the income statement, right?

Okay, the earnings came out. Why did the stock go down? Right? But if you don't know that much, this an income statement like this could be very confusing to you because you look, you're like, "Okay, revenues up 5.9%.

That's good." But then you look at net income. Net income was down year-over-year, down 9.4%. earnings per share down 9.1%. So if you look at that, you're like, "Oh my gosh, like this company's in trouble."

Like what is going on with Walmart? They're growing revenues, but their net income's going down. Their earnings per share is going down, right? And so something like that can trip up a newbie investor where they're like, you know, get a false interpretation of what's actually going on with the company because you got to dig a little deeper.

Okay, Walmart actually had a gradea income statement here. If you know what a great income statement is, this is actually phenomenal income statement. And the reason being is revenue up 5.9% but their cost of sales this is their biggest line item was only up 4.5%.

SGNA that was a little high up 6.4% so it grew a little faster in revenue but that's a very small line item compared to cost of sales right so your operating income at WLW wall actually went up almost 29% 28.8%.

That's a smoking good number right debt costs fell dramatically as well and you look here and basically they had a 1.2 2 billion hit. It was like a loss here. And these are usually oneoff line items here versus the same period last year they had a $2.7 billion help.

Okay. So the moral of the story is here if it's not for those one you got to always factor in for these oneoff things. And you know those usually don't renew. And so the the truth is in regards to Walmart's earnings here they were actually top tier. They were actually phenomenal.

Next up here, Walmart. Not really a stock that interests me. Why? Well, look at the Ford P on the stock. It's 37. Look at the 2-year Ford P is 31. That's pretty darn high, right?

Why would I want to buy Walmart at that s those sorts of forward PS when I could buy something like a Celsius at a 25 forward in a two-year forward at 14, right, with much better long-term growth prospects.