Value
4.0/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 2.9 |
| P/S | 9.4 |
| EV/EBITDA | 0.0 |
| Fwd P/E | 2.9 |
| PEG | 2.7 |
| Analyst target | 6.0 |
- ▸Forward P/E: 36.3x
- ▸PEG: 4.70
WMT · Why this verdict
Why Walmart (WMT) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictSELL
Overall score4.8/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
Three consecutive quarterly earnings beats offer near-term support, but a forward P/E of 36.4x and PEG of 4.68 leave the shares richly valued relative to growth, while free cash flow at only 30% of net income signals a quality shortfall. With approximately 5.9% remaining to the analyst price target and a risk/reward that barely clears 1-to-1, the setup favors patience over new exposure.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
A forward P/E of 36.4x and PEG of 4.68 place the shares at a significant premium to growth — flagged as a key risk — suggesting that all near-term upside is already priced in and leaving limited room for multiple expansion. Valuation breakdown | If the valuation thesis proves wrong, the forward P/E should compress toward 25x or below as earnings growth re-rates the multiple over the next 12 months, making the shares attractive on a growth-adjusted basis. | →Stable |
| CounterA premium multiple can persist in the absence of a catalyst to compress it; analyst sentiment currently skews constructive, which can sustain the current price even absent fundamental improvement, particularly for a company delivering consistent earnings beats. | ||
An RSI reading of 27 signals an oversold condition within a longer-term uptrend — confirmed by rising on-balance volume and a price still trading above the 200-day moving average — suggesting the current weakness is a pullback rather than a trend reversal. Momentum breakdown | RSI recovers above 50 within 8 weeks and price advances toward the analyst target of $126.89 without the 200-day moving average being breached, confirming the uptrend remains intact. | →Stable |
| CounterMomentum indicators sit only marginally above the minimum passing threshold, with a soft-watch caution attached; an oversold reading within a high-valuation, below-average-quality stock can deepen into a sustained decline if the fundamental headwinds remain unresolved, and the ongoing leadership change introduces near-term headline uncertainty. | ||
Free cash flow represents only 30% of net income — flagged as a red flag in earnings quality — meaning reported profits are converting into cash at a rate that may be insufficient to fully support the current valuation and dividend obligations. Quality breakdown | If cash conversion improves, the free-cash-flow-to-net-income ratio should recover above 60% over the next 12 months, providing a more durable foundation for dividends and any capital return program. | →Stable |
| CounterThe Piotroski F-Score of 7 out of 9 indicates the financial structure is otherwise solid; a low free-cash-conversion rate, if transient, may not immediately impair dividend payments — particularly given that the dividend payout stands at 83% and a rich multiple can persist if investors treat the gap as temporary. | ||
Three consecutive quarterly earnings beats — the most recent by 2.75%, preceded by beats of 1.79% and 28.79% — following a miss in August 2025 suggest a pattern of delivering ahead of expectations that can sustain near-term investor confidence. Earnings | The beat streak extends to four or more consecutive quarters over the next 12 months, with positive earnings surprise percentages maintained in each reported period. | →Stable |
| CounterA leadership change underway introduces execution risk that can disrupt guidance discipline; the beat streak includes one large outlier of 28.79% that flatters the trailing average, and the two most recent quarters came in at only 2.75% and 1.79% above estimates — margins narrow enough to flip negative if underlying conditions weaken. | ||
A forward P/E of 36.4x and PEG of 4.68 place the shares at a significant premium to growth — flagged as a key risk — suggesting that all near-term upside is already priced in and leaving limited room for multiple expansion.
→StableValuation breakdown
- Expectation
- If the valuation thesis proves wrong, the forward P/E should compress toward 25x or below as earnings growth re-rates the multiple over the next 12 months, making the shares attractive on a growth-adjusted basis.
CounterA premium multiple can persist in the absence of a catalyst to compress it; analyst sentiment currently skews constructive, which can sustain the current price even absent fundamental improvement, particularly for a company delivering consistent earnings beats.
An RSI reading of 27 signals an oversold condition within a longer-term uptrend — confirmed by rising on-balance volume and a price still trading above the 200-day moving average — suggesting the current weakness is a pullback rather than a trend reversal.
→StableMomentum breakdown
- Expectation
- RSI recovers above 50 within 8 weeks and price advances toward the analyst target of $126.89 without the 200-day moving average being breached, confirming the uptrend remains intact.
CounterMomentum indicators sit only marginally above the minimum passing threshold, with a soft-watch caution attached; an oversold reading within a high-valuation, below-average-quality stock can deepen into a sustained decline if the fundamental headwinds remain unresolved, and the ongoing leadership change introduces near-term headline uncertainty.
Free cash flow represents only 30% of net income — flagged as a red flag in earnings quality — meaning reported profits are converting into cash at a rate that may be insufficient to fully support the current valuation and dividend obligations.
→StableQuality breakdown
- Expectation
- If cash conversion improves, the free-cash-flow-to-net-income ratio should recover above 60% over the next 12 months, providing a more durable foundation for dividends and any capital return program.
CounterThe Piotroski F-Score of 7 out of 9 indicates the financial structure is otherwise solid; a low free-cash-conversion rate, if transient, may not immediately impair dividend payments — particularly given that the dividend payout stands at 83% and a rich multiple can persist if investors treat the gap as temporary.
Three consecutive quarterly earnings beats — the most recent by 2.75%, preceded by beats of 1.79% and 28.79% — following a miss in August 2025 suggest a pattern of delivering ahead of expectations that can sustain near-term investor confidence.
→StableEarnings
- Expectation
- The beat streak extends to four or more consecutive quarters over the next 12 months, with positive earnings surprise percentages maintained in each reported period.
CounterA leadership change underway introduces execution risk that can disrupt guidance discipline; the beat streak includes one large outlier of 28.79% that flatters the trailing average, and the two most recent quarters came in at only 2.75% and 1.79% above estimates — margins narrow enough to flip negative if underlying conditions weaken.
Per-dimension breakdown
Quality
4.0/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 8.0 |
| ROA | 4.6 |
| Gross margin | 1.0 |
| Op margin | 1.7 |
| Net margin | 1.6 |
| Current ratio | 3.1 |
| FCF quality | 2.4 |
| Moat | 6.1 |
| Piotroski F | 7.8 |
- ▸Earnings quality RED FLAG: 30% FCF/NI
- ▸Strong Piotroski F-Score: 7/9
Growth
5.1/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 4.3 |
| EPS growth | 5.9 |
Momentum
5.1/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.5 |
| MACD | 10.0 |
| OBV | 1.0 |
| MA position | 7.0 |
| Volume | 2.2 |
- ▸Volume distribution (falling OBV)
- ▸Above 200-day MA
Sentiment
7.6/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 6.3 |
| Analyst rating | 9.0 |
| Price target | 7.3 |
Insider
3.9/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 4.5 |
| insider conviction | 2.0 |
| holder change | 5.1 |
- ▸Modest insider selling — $524,804,439 (0.055% of mkt cap)
Peer rank
3.8/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 1.7 |
| quality rank | 5.0 |
| growth rank | 3.3 |
Technical
5.3/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 4.3 |
| support resistance | 3.9 |
| 52w position | 7.6 |
Risk (lower is worse)
6.4/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 9.1 |
| days to cover | 6.9 |
| volatility | 7.0 |
| put call | 0.0 |
| implied vol | 5.6 |
| beta | 9.4 |
| debt equity | 6.5 |
- ▸Elevated put/call: 2.18
Catalyst
5.1/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 5.6 |
| earnings timing | 5.0 |
| surprise avg | 2.1 |
| dividend safety | 5.2 |
| news activity | 8.0 |
- ▸Dividend: 83.0%
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position.
Engine technical detail
verdict_path:
L4:PATH_F_SELLPassed (6)
- MOMENTUM:5.1>=4.5
- INSIDER:OK
- 8K:CLEAN
- EARNINGS_PROXIMITY:57d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:1.4<1.5@spot
Warning (1)
- MOMENTUM:5.1<5.5 (soft — BUY_NOW allowed but watch)
Reward-to-Risk
1.36
Upside
+7.2%
Downside
5.3%
Sizing output
AVOID
SetupRANGE_BOUND — RSI 58 mid-range, Bollinger mid-band
EdgeNO_EDGE — No clear edge identified
SuitabilityMODERATE — Balanced profile
Investment implication
The F-path SELL output reflects an overall score of 4.8 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Sentiment at 7.6) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( ASYMMETRY:1.4<1.5@spot) reinforce the read. Current asymmetry R:R is 1.36 — supplementary context, not the trigger for this path.
The strongest dimensions are Sentiment at 7.6, Risk (lower is worse) at 6.4, and Technical at 5.3; the weakest are Peer rank at 3.8, Insider at 3.9, and Quality at 4.0. The V9 engine flagged 1 failed gate with 1 warning, producing an asymmetric reward-to-risk of 1.36 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Three consecutive quarterly earnings beats — the most recent by 2.75%, preceded by beats of 1.79% and 28.79% — following a miss in August 2025 suggest a pattern of delivering ahead of expectations that can sustain near-term investor confidence.
Trip ifEPS surprise falls below 0% for 2 consecutive quarters.
- P2A forward P/E of 36.4x and PEG of 4.68 place the shares at a significant premium to growth — flagged as a key risk — suggesting that all near-term upside is already priced in and leaving limited room for multiple expansion.
Trip ifForward P/E compresses below 25x from the current 36.4x.
- P3Free cash flow represents only 30% of net income — flagged as a red flag in earnings quality — meaning reported profits are converting into cash at a rate that may be insufficient to fully support the current valuation and dividend obligations.
Trip ifFCF/NI ratio rises above 60% from the current 30%.
- P4An RSI reading of 27 signals an oversold condition within a longer-term uptrend — confirmed by rising on-balance volume and a price still trading above the 200-day moving average — suggesting the current weakness is a pullback rather than a trend reversal.
Trip ifPrice stays below the 200-day moving average for more than 5 consecutive trading days.