Is Walmart (WMT) Stock Too Expensive to Buy Now?
Key Points
With Walmart, waiting for a better price might be the best move.
There are other, more attractively valued stocks out there now.
- 10 stocks we like better than Walmart ›
Everyone knows Walmart (NASDAQ: WMT). It's a retail behemoth, with a recent market value of roughly $1 trillion and some 10,900 stores in 19 countries. It employs about 2.1 million people worldwide and serves some 280 million customers. (With Earth's population of 8 billion people, there's clearly room for growth for Walmart, despite its large size.) Indeed, Walmart is one of Earth's largest employers.
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Here's how the stock has performed, on an average annual basis, in the past:
|
Time period |
Average annual gain |
|---|---|
|
Past year |
23.54% |
|
Past three years |
32.29% |
|
Past five years |
21.27% |
|
Past 10 years |
18.80% |
|
Past 15 years |
13.89% |
Data source: Data from Morningstar.com as of Nov. 10, 2026.
Clearly, the company has been doing well in recent years. (The stock gained 73.5% in 2024 alone!) But all that growth has left the stock rather overvalued, with a recent price-to-sales ratio of 1.37, well above the five-year average of 0.85, and a recent forward-looking price-to-earnings (P/E) ratio of 38, well above the five-year average of 27.
Should you invest in Walmart?
So, should you invest in Walmart? I would hold off, as you'd be paying a steep per-share price. The stock will likely continue to grow over the coming decades, but it may also retreat to a more reasonable valuation in the next year or two -- especially if there's a stock market crash.
Think of it this way: The stock was recently priced around $126 per share. If you buy now and it hits $200 in five years, you'll enjoy a roughly 60% gain -- about 10% annually on average. But if you choose to wait, hoping for a better price, and you can snag shares at, say, $100 per share, you'll enjoy a 100% gain when the shares hit $200 (about 15% annualized).
Buying some shares now could serve you well, as long as you're planning to hold for many years. But there are other, less richly valued portfolio candidates out there, too.
Should you buy stock in Walmart right now?
Before you buy stock in Walmart, consider this:
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Selena Maranjian has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Walmart. The Motley Fool has a disclosure policy.
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