Walmart (WMT 0.93%) reports its fiscal first quarter of 2027 results before the market opens on Thursday, and shares have already had a year worth watching. As of this writing, the stock is up almost 18% in 2026, recently brushing a 52-week high of $134.69. For comparison, the S&P 500 is up only about 6% year to date.
That kind of move, however, introduces valuation risk: expectations are now elevated, too. The retail giant's stock trades in the mid-40s as a multiple of the midpoint of management's full-year fiscal 2027 non-GAAP (adjusted) earnings-per-share guidance. For a company growing total revenue in the mid-single digits, that is not a modest valuation.
So with the report just days away, is the stock a buy here? Or is it better to wait?
Image source: The Motley Fool.
The momentum behind the rally
Whatever you make of the valuation, the underlying business's strength certainly is impressive.
In its fiscal fourth quarter (the period ended Jan. 31, 2026), Walmart's revenue rose 5.6% year over year, or 4.9% on a constant-currency basis. And the higher-margin parts of the company led the way. Global e-commerce sales grew 24%, with U.S. e-commerce up 27%, while the advertising business climbed 37% globally, including a 41% jump at Walmart Connect in the U.S. Membership fee revenue, meanwhile, grew 15.1% globally.
This broad-based growth in these key areas is notable -- and it's helping drive the company's bottom line. Walmart said advertising income and membership fees together accounted for nearly a third of fourth-quarter operating income. Adjusted operating income, in turn, grew 10.5% in constant currency in the period -- more than double the pace of revenue.
Further, e-commerce is no longer the margin drag it once was.
"We've been enjoying roughly double-digit incremental margins in e-commerce," chief financial officer John David Rainey said on the company's fiscal fourth-quarter earnings call.
And the trajectory of Walmart's retail media business is also worth noting. Walmart Connect's U.S. growth accelerated from 31% in fiscal Q1 of 2026 to 33% in fiscal Q3 and then to 41% in fiscal Q4.
NASDAQ: WMT
Key Data Points
A premium stock, a tougher comparison
But there are a few areas of caution heading into the report.
First, Rainey told analysts that fiscal Q1 operating income growth would be the lowest of the year, due in part to the timing of expenses and the year-over-year tariff impact, which began to show up in fiscal Q2 of 2026. Management guided fiscal Q1 net sales growth of 3.5% to 4.5% at constant currency, with adjusted operating income up 4% to 6% at constant currency.
A CEO transition adds another variable.
John Furner took over from longtime CEO Doug McMillon on Feb. 1, and Thursday's report will be his first as chief executive. While Furner is a Walmart veteran of more than three decades, he still introduces a transition risk.
Further, management has already described the operating backdrop as "somewhat unstable," with Rainey adding on the same fiscal fourth-quarter earnings call that it was "prudent to start the year with a level of conservatism."
Overall -- a premium valuation, a tougher year-over-year profit comparison, fresh leadership, and ongoing tariff uncertainty -- is why I'd treat shares as more of a hold than a buy at today's price.
Sure, the retailer's business momentum is undeniable, and Walmart has built out two newer profit engines in advertising and membership that look very different from a traditional grocery and general merchandise operation. Those higher-margin lines could help justify a rich valuation multiple. But the stock is arguably already pricing in a lot of that progress.
If Thursday's update brings cautious language on the consumer or any softness in Walmart's higher-margin businesses, shares could take a hit. Investors, therefore, shouldn't rule out a downside surprise. Holding here may be fine, but I wouldn't be in a hurry to buy ahead of a report when the bar is this high.
That's not to say there couldn't be an upside surprise when the company reports earnings. That's always possible. But the stock doesn't look priced attractively enough as a long-term buy here.
