Walmart (WMT +0.40%) is a retailing behemoth. It has almost 11,000 stores worldwide. In Q4 2025 (ended Jan. 31), it generated $181 billion in revenue. It currently sports a monster $748 billion market cap.
This retail stock is up 112% in the past five years. In the past 12 months, shares have jumped 56%, crushing the 5% gain of the S&P 500 index (as of April 17).
Along with the overall market, Walmart is facing downward pressure, with shares off 11% from their peak (as of April 17). Is now the time to invest $1,000 in the Arkansas-based business and hold it forever?
Figuring out ways to make money
Walmart's ubiquity, convenience, and consistently low prices on a massive number of items make it popular. The business registers durable demand trends that should be the envy of the entire retail sector.
This is never more apparent than with one critical metric: same-store sales (SSS). During the latest fiscal quarter, Walmart's SSS in the U.S. increased 4.6% year over year. This was at least the 24th straight quarter that a positive metric was reported.
That track record highlights Walmart's ability to handle whatever economic headwinds are thrown its way.
In the past few years, Walmart has found new ways to make money. In fiscal 2025, advertising revenue surged 27% to $4.4 billion as more marketplace merchants used the tools available. Membership revenue, from Walmart+ and Sam's Club, soared 17% in Q4.
"Our membership programs, both Sam's Club and W+, have been very popular with our customers and members, and their growth, especially W+, is helping expand our customer base and increase customer loyalty," CFO John Rainey recently said during an investor presentation.
Of course, one challenge to continuing success for Walmart in these new areas is the competitive landscape. Amazon has developed a strong position in online shopping, primarily with its wildly successful Prime membership, as well as in digital advertising. However, Walmart is starting from a much lower base, so it has significant potential for growth.
NASDAQ: WMT
Key Data Points
Walmart dominates the retail landscape
The retail sector is extremely competitive, but Walmart has a wide economic moat that allows it to compete effectively and maintain financial strength.
Perhaps the biggest competitive advantage working in Walmart's favor is its scale, which provides cost efficiencies. Buying gargantuan quantities of goods from suppliers gives the company tremendous negotiating leverage. These savings are then passed to consumers.
Investors who want to own stocks forever need to think critically about factors that could cause disruption to a business or force it to become obsolete. Walmart's leading position in the industry, importance to hundreds of millions of shoppers weekly, and ability to drive new revenue sources should give anyone confidence about the company's staying power.
Value for shareholders
Walmart stock's performance in the past year is impressive. But what about its valuation? The current P/E ratio is 38.7, substantially higher than the trailing-five-year and trailing-10-year averages. The multiple will likely contract in the future, introducing an obstacle to adequate investment returns.
To its credit, though, Walmart has raised its dividend for 52 consecutive years. And the leadership team's focus on stock buybacks has reduced the diluted outstanding share count by 6% in the past five years.
Capital returns like this are great, but they still don't change my conclusion that investors shouldn't buy Walmart stock with $1,000 right now.
