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Walmart - AI Stock Analysis

Analysis generated February 25, 2025

Walmart Inc. (NYSE: WMT) is an American multinational retail corporation that operates a chain of hypermarkets, discount department stores, and grocery stores. With its headquarters in Bentonville, Arkansas, Walmart spans across numerous countries with thousands of stores. The company has continuously adapted its operations to changing market dynamics and technological advancements.

Known for providing a wide range of products at lower prices, Walmart significantly impacts the retail market globally. With its e-commerce segment growing, Walmart is competing directly with other major e-commerce platforms by expanding its online presence and improving its logistics to ensure speedy deliveries.

Fundamental Analysis

The latest revenue figures for Walmart indicate a strong performance with $170B for the last quarter. This marks a slight increase of 0.15% compared to the prior quarter and a notable increase of 5.46% year-over-year. Such growth suggests Walmart is successfully maintaining its strong market position and gaining more market share.

Net income for the last quarter was reported at $4.58B, showcasing an increase of 1.69% from the previous quarter and an impressive 910.38% leap year-over-year. This extraordinary year-over-year growth in net income might be a result of cost-cutting measures, improved operational efficiencies, or higher sales margins.

However, it is crucial to note that Walmart's EBITDA for the last quarter was $6.71B, which represents a decline of 39.84% compared to the previous quarter. Despite this quarter-over-quarter dip, the year-over-year increase of 46.37% indicates a longer-term positive trend. This discrepancy needs further analysis to understand the underlying factors.

The current Price to Earnings (P/E) ratio stands at 39.33, which might be considered high. High P/E ratios can indicate an overvaluation, suggesting potential bearish outlook in near-term market performance.

Additionally, insider trading activities, such as recent stock sales by company insiders, can be interpreted as a negative indicator, possibly hinting at concerns among executives about the stock's future performance.

Technical Analysis

Walmart’s current stock price is $93.67, representing a decrease of 1.15% compared to the previous month. While such a decline may concern short-term investors, the stock has shown a substantial 59.03% increase compared to the same time last year, indicating a positive long-term trend.

The trend appears bearish as indicated by the recent price movements and other technical indicators. The current 10-day Simple Moving Average (SMA10) is 98.48, which is lower than the previous SMA10 of 99.51, suggesting potential downward momentum in the stock price.

Furthermore, the Relative Strength Index (RSI) of 63.2 points to a neutral condition, implying there is no immediate overbought or oversold scenario that might affect stock performance significantly in the short term.

Alternative Data Analysis

Analyzing alternative data can offer further insights into Walmart’s operational health. The company has approximately 30,000 open positions, representing a 7% decrease in job postings over the past few months. This trend could signal cost-cutting efforts or attempts to improve margins, which might be necessary but not always favorable for growth.

Employee sentiment towards the company's business outlook remains neutral, neither overly positive nor negative, reflecting a stable but uninflated perspective on Walmart’s future from an internal workforce standpoint.

On the customer acquisition front, Walmart’s estimated 445 million visitors to their webpage show stabilization without meaningful increases or decreases recently. Meanwhile, their mobile app downloads stand at approximately 27,000 per day but have seen a 7% decrease over the last couple of months—a concerning sign for customer engagement and potential loss in customer base.

In terms of social media engagement, no considerable changes were noted, with Walmart having 3.5 million Instagram followers and 1.4 million Twitter followers.

Walmart’s AltIndex AI score is 40, which is classified as a sell signal, suggesting caution from an AI-driven investment perspective.

Conclusion

In conclusion, Walmart demonstrates several strengths, such as robust revenue growth and an impressive year-over-year increase in net income. However, some caution is advised given the decrease in EBITDA, potentially high P/E ratio indicating overvaluation, insider stock sales, and bearish technical trends. The decreasing metrics concerning job postings and app downloads call for careful observation, adding layers to the cautious perspective.

Recommendations for Walmart's stock suggest a Hold stance, advising investors to monitor key changes and reassess at regular intervals. Given the mixture of positive long-term trends and short-term concerns, a conservative approach with careful market tracking is prudent.

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.