WMT 估值偏高，不建议在当前价位买入。

Over the past decade, Walmart has brilliantly turned its geographic location from a weakness into a competitive advantage against Amazon. Do you remember in 2016, when investors were worried about Walmart potentially going bankrupt and being overtaken by Amazon and its e-commerce business?

Well, those concerns have changed completely, as Walmart has wisely invested in its logistics and e-commerce capabilities, resulting in remarkable business growth. In fact, the growth in third-party network sales has surpassed Walmart's direct-to-consumer sales from its imported inventory.

Its ability to use its geographic location as a delivery network has contributed to reducing delivery time and improving the shopping experience to a degree that surpasses even shopping through Amazon.

But does all this make Walmart stock an investment opportunity? So, all the factors I mentioned in the introduction contributed to Walmart's significant growth over the past decade, at a much faster pace than the previous decade.

Walmart's revenue over the past twelve months has exceeded $700 billion, jumping to $736 billion, compared to around $400 billion in 2017.

Walmart still lags behind Amazon in terms of total revenue over the past twelve months, but Walmart's growth rate has improved since 2022.

Given its ongoing investments, it is likely the only company capable of competing with Amazon in terms of logistics capabilities.

This delivery network becomes more attractive to suppliers who leverage Walmart's delivery network and advertising capabilities to increase overall merchandise sales volume. Therefore, suppliers who wish to expand their sales and improve their market share can benefit from Walmart's services, which Walmart indicates increase conversion rates when used.

This also allows Walmart to expand its inventory availability and offer more choices to customers. But it's not all positive. As Walmart allows more third-party sellers on its website, it has less control over inventory, quality, and customer experience.

This strategy has both advantages and disadvantages, and so far, Walmart has succeeded in managing risks while maximizing and capitalizing on profit opportunities.

Not all of these investments in e-commerce and logistics came without cost. Walmart's operating profit margin declined over the past decade, but it has begun to recover. However, it remains at 4.4%, which is lower than it was in 2017 at 4.6%, even though the company generated hundreds of billions of dollars in additional revenue.

But Walmart does not have a profitable web services business like Amazon, so it is understandable that it does not achieve high operating profit margins like Amazon.

At 12.02, Walmart is among the leading companies in this sector, surpassed only by Costco, to my knowledge, among all companies operating in this field.

Walmart operates on a low-cost business model, which is the hardest to implement, but also the easiest to defend if successful.

Walmart has been incredibly successful in implementing this model for decades, as evidenced by its massive sales of $700 billion over the past twelve months. Therefore, we see that the company's business is thriving, and given these factors, I wanted to take a look at its valuation to see if its price was appropriate.

With a forward price-to-earnings ratio of 34, Walmart's stock price seems a bit high. The stock price is approaching the upper limit of its trading range over the past decade according to this criterion.

It is also sold at a similar price, and even more expensive than Amazon when measured according to this standard.

As I mentioned, Walmart does not have profitable sectors like Amazon’s web services sector, which achieves operating profit margins of nearly 40%. Therefore, I get a similar result when reviewing my discounted cash flow model for Walmart, where I find that the stock appears to be overvalued.

Calculating according to this standard, I value the company at $70, while the current market price is closer to $110. So, to answer the question, I don't think Walmart stock represents a buying opportunity at the moment.

While it is true that the company is performing excellently, and the management team is commended for reviving growth and effectively competing with Amazon, even the best companies at an inflated price are not a good investment, and that is the situation I see with Walmart right now.