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Walgreens - AI Stock Analysis

Analysis generated January 10, 2025

Walgreens Boots Alliance, Inc. is a global leader in retail and wholesale pharmacy, impacting millions of lives every day by dispensing medicines, providing accessible healthcare, and offering convenient consumer goods. Operating thousands of locations worldwide, Walgreens is known for its commitment to quality healthcare services, innovation, and community wellness initiatives. The company integrates with various healthcare providers and partners to offer a broad range of services including clinical advice, vaccinations, health tests, and more. Despite its commendable service, Walgreens has faced challenges in maintaining profitability and growth amidst intense competition and shifting market dynamics.

Fundamental Analysis

In the last quarter, Walgreens reported revenue of $38.3 billion, demonstrating a solid growth of 5.41% over the previous quarter and 8.26% year-over-year. This indicates a positive trajectory in terms of sales and market reach.

However, the net income for the same period was $3.01 billion, reflecting an alarming decrease of 973.55% compared to the previous quarter and a decline of 1,569.44% year-over-year. This significant drop indicates that the company is facing severe profitability issues, potentially due to higher operational costs or inefficient expenditure management.

The EBITDA for the last quarter was $259 million, showing a decrease of 126.06% compared to the previous quarter and 175.73% year-over-year. This declining trend further underscores the ongoing financial struggles within the company.

Walgreens’ current P/E ratio stands at 27.42, which is relatively high and could indicate overvaluation. This ratio suggests that investors are paying a premium for the company’s earnings, possibly due to expected future growth, despite current profitability concerns.

Technical Analysis

As of today, Walgreens’ stock price is $11.76, a notable increase of 12.86% from a month ago, which could point to a short-term positive trend. Nevertheless, the stock has declined by 47.12% over the past year, signaling significant long-term challenges.

The Simple Moving Average (SMA10) currently at $9.64, up from the previous SMA10 of $9.39, suggests a potential upward trend in price movement. This can be seen as a bullish indicator in the short term.

Additionally, the Relative Strength Index (RSI) is at 37.2, indicating a neutral condition. This neutral zone suggests neither overbought nor oversold conditions, implying that the market is still undecided about the future trajectory of Walgreens' stock.

Alternative Data Analysis

Regarding job postings and employee sentiment, Walgreens exhibits 13,619 open positions, a reduction of 20% in the past few months. This cutback might be a cost-saving measure, reflecting a company struggling to maintain workforce levels, which is a negative sign for growth.

Employee sentiment is remarkably low, with only an estimated 30% of employees expressing a positive business outlook, highlighting internal challenges and potential morale issues.

Customer acquisition shows a promising trend with an estimated 74 million visitors to their webpage, a 13% increase in the past few months. Furthermore, their mobile apps receive 10,000 downloads per day, up by 40%, suggesting increased customer engagement and utilization of digital services.

Customer engagement metrics on social media are mixed. Walgreens’ Instagram presence has stabilized with 380,000 followers, while their Twitter followers dropped by 1% to 790,000, indicating a slight loss of interest or engagement in the brand.

Lastly, AltIndex's AI score for Walgreens stands at 34, issuing a sell signal based on comprehensive fundamental, technical, and alternative data analysis.

Conclusion and Recommendation

In summary, while Walgreens demonstrates positive revenue growth and short-term stock appreciation, the substantial declines in net income and EBITDA raise concerns about its financial health. The high P/E ratio further signals potential overvaluation amidst these profitability issues. Technical indicators present a mixed viewpoint, with some signs of bullish momentum countered by longer-term declines.

Alternative data paints a complex picture with increased customer web traffic and app downloads suggesting popularity in digital channels, yet lower employee sentiment and decreasing job postings point to internal cost-cutting measures and potential operational struggles.

Considering the overall analysis, investors might approach Walgreens with caution. The mixed signals suggest weighing the allure of short-term growth against the fundamental financial and operational challenges.

Disclaimer: This AI stock analysis, generated by an experimental AI tool, is for informational purposes only and not financial advice. Information is based on publicly available data and may not always be accurate or current.