When it comes to Walmart (WMT +1.47%) stock, most analysts rate it a buy or a strong buy.
The world's largest retailer has worked to win over more high-income shoppers and has applied artificial intelligence (AI) to improve logistics and foster a growing digital ad platform. Moreover, a move to the Nasdaq seems to have attracted more investors.
Nonetheless, when investors take a deeper look into the financial metrics, it calls into question whether Walmart is truly prospering in the current environment. Thus, despite those successes, now is probably not a good time to add shares of Walmart stock, and here's why.
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Where Walmart stock stands
Walmart has stood out by reviving its business in recent years. After years of struggle, it has leaned into technology to boost its e-commerce presence and improve its supply chain.
Additionally, after stumbling internationally in past years, it has adapted product offerings to meet local needs and focused on e-commerce in markets like Mexico, China, and India to improve sales abroad.
Amid the e-commerce focus and use of AI, some analysts are now thinking of Walmart as a tech stock. With that, its stock is up by nearly 170% over the last five years, well ahead of the S&P 500.
NASDAQ: WMT
Key Data Points
Unfortunately, for all of these improvements, Walmart remains a slow-growth enterprise. In the first nine months of 2025, the company reported almost $573 billion in revenue, a growth rate of 4%. However, the numbers look less encouraging when looking at them closely.
Its net income for the same period of just under $18 billion was up by nearly 25% from year-ago levels. Unfortunately, "other gains and losses" accounted for most of that gain, and that primarily came from rising values in its equity investments. When factoring in the increase in selling, general, and administrative expenses, operating income actually fell by 2% over the same period.
Moreover, despite that performance, Walmart arguably trades at a premium valuation. Its price-to-earnings (P/E) ratio now stands at 45. That is well above the S&P 500's average earnings multiple of 30.
Still, the more surprising part of that is that it makes Walmart stock more expensive than Amazon, which now sells at 30 times earnings. Given Walmart's growth challenges, one has to wonder whether the stock is worth that premium.
Do not buy Walmart stock
Walmart is almost certainly going to remain a force in retail, but that likely does not make its stock a buy.
Indeed, Walmart has made moves in e-commerce, AI, and in its international operations that have caught the attention of investors.
Unfortunately, for all of these efforts, its financial gains appear marginal even though its stock price has risen. Consequently, investors now must pay a premium valuation for lackluster growth. Until that dynamic changes, investors should probably refrain from adding shares.
