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Walmart - AI Stock Analysis
Analysis generated September 23, 2024
Walmart Inc. is the world's largest retailer, operating hypermarkets, discount department stores, and grocery stores across the globe. Founded in 1962 by Sam Walton, Walmart has grown to become a household name, offering a wide variety of products including clothing, electronics, groceries, and home goods. The company's headquarters are located in Bentonville, Arkansas, and it employs millions of people worldwide.
With a substantial presence in the United States and a growing international footprint, Walmart has been a consistent performer in the retail industry. The company has focused on integrating online and offline shopping experiences through initiatives like Walmart+, an annual subscription service offering benefits such as free delivery.
Fundamental Analysis
Walmart's revenue for the last quarter was $169 billion. This represents a 4.85% increase compared to the previous quarter and a 4.77% increase from the same quarter last year. This positive year-over-year growth suggests that Walmart has been effective in driving sales and maintaining consumer interest in its vast array of products.
The net income for the last quarter was $4.5 billion, a decrease of 11.81% compared to the previous quarter and a significant 42.96% drop from the same quarter last year. This downward trend in net income raises concerns about cost management and profitability.
Walmart's EBITDA for the last quarter was $11.2 billion, showing an 11.86% increase from the previous quarter but a 21.88% decrease from the same quarter last year. This mixed performance in EBITDA indicates that while some operational efficiencies may be improving, there are still significant hurdles impacting overall earnings before interest, taxes, depreciation, and amortization.
The current price-to-earnings (P/E) ratio stands at 41.18, which is relatively high. This may indicate potential overvaluation and a bearish outlook from the perspective of traditional valuation metrics.
Additionally, insider trading activity shows that there have been a few company insiders selling their stock in recent months, which can be interpreted as a bearish signal about the company’s near-term prospects.
Technical Analysis
Today’s stock price for Walmart is $80.33, reflecting a 6.12% increase over the past month and a robust 50.43% increase over the past year. However, the trend is currently bearish.
The current Simple Moving Average (SMA10) is 79.49, slightly lower than the previous SMA10 of 79.52. This suggests a potential downward trend in price movement.
The Relative Strength Index (RSI) is 27.3, indicating a potentially oversold condition. This low RSI could be a bullish sign as it may signal that the stock is undervalued and due for a rebound.
Alternative Data Analysis
Walmart has shown a keen interest in growing and expanding its workforce, with 29,521 open positions recorded, an increase of 34% over the past couple of months. This surge in job postings indicates positive growth prospects and a healthy sign for business expansion.
The business outlook among Walmart employees is described as neutral, which does not provide a strong signal either way regarding internal sentiment.
Customer acquisition metrics indicate that Walmart’s website receives an estimated 442 million visitors, with no significant change in recent months. However, there is a positive trend in mobile app downloads, currently at 28,000 per day and up by 12% in the last couple of months, suggesting increasing engagement through digital platforms.
Customer engagement on social media remains stable, with Walmart having 3.4 million followers on Instagram and 1.4 million followers on Twitter. There hasn't been any meaningful increase or decrease in these numbers recently.
According to AltIndex’s AI score, which predicts stock performance based on a combination of fundamental, technical, and alternative data analysis, Walmart has an AI score of 50. This score suggests a hold signal.
Conclusion and Recommendation
Considering the data from all perspectives—fundamental analysis, technical analysis, and alternative data—Walmart presents a mixed picture. While revenue growth remains strong, there is significant concern over the declining net income and EBITDA. The relatively high P/E ratio and recent insider selling add further caution.
On the technical side, although there is a short-term positive trend in stock price, the bearish trend and low RSI suggest volatility and potential stability issues. On the positive side, Walmart’s growth in job postings and mobile app engagement signal potential for future growth and adaptability to the modern retail environment.
Therefore, given the mixture of positive and negative signals, the recommendation would be to Hold Walmart stock. This conclusion aligns with AltIndex’s AI score, suggesting that despite some concerns, Walmart has sufficient stability and potential for future performance to warrant holding the stock for now.
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.
