QS Research · Michael Burry's Scion Capital analyst template · 2006
Walmart Inc. (WMT)
As of 2026-11-08 · 11/15 boxes filled from SEC filings and market data
Conclusion: WATCH
Conviction medium · base case -2% · downside -13% · upside +7%
At today's 21.6x EV/EBITDA, Walmart already capitalizes TTM EBITDA of $47.37B (N14,N28) into a $1,023.2B EV; after $28.40B net debt and $15.57B leases (N24,N23), that is $979.2B equity, or about $123.4/share, -1.7% from the $125.52 close (N1,N5). A downside EBITDA of $42.0B (tariff-refund reversal and U.S. comps near +2.6%) at the same multiple gives about $108.8/share (-13%), while applying FY27's +7.0%-8.5% cc adjusted operating-income guide to the same base gives about $133.8/share (+6.6%) (S30). The stock is not short by rule because a -30% base case would require assuming a lower multiple, which rule 1 forbids without a cited non-valuation catalyst; at 45.1x P/E (N31) and a 1.4% FCF yield (N32), the market is paying a Costco-like multiple for mid-single-digit growth. Watch: the valuation looks stretched, but the actionable event is the 2026-11-19 Q3 print, not today's price.
Key numbers
- Share price: $125.52
- Market cap: $995.84B
- Latest financial period: TTM to Jul 31, 2026
- Revenue (TTM): $735.84B
- EV / EBITDA (TTM): 21.6x
- P/E (TTM): 45.1x
- Price / book: 10.14x
The 15 boxes
- ✓ 1. Long-form business notes
Walmart's latest 10-K excerpt describes an enterprise strategy spanning traditional retail, membership, marketplaces, financial services, health and wellness and other services, with omnichannel pickup/delivery/shipping and growing AI use; it names Walmart U.S., Sam's Club U.S. and international markets. The XBRL shows revenue, operating income, net income and operating cash flow all higher in the fiscal year ended 2026-01-31 than in the fiscal year ended 2021-01-31, while capex and buybacks also rose. The oldest 10-K excerpt is dominated by COVID-19 and accelerated eCommerce growth, while the latest highlights AI/agentic platforms and cybersecurity incidents.
- ○ 2. Competitive advantage
The advantage is scale and cash, not margin: revenue of $706.41B in FY2026 (from $555.23B in FY2021) produces only $29.82B of operating income, about 4.2% of sales (my arithmetic from the XBRL dollars), versus 4.35% in FY2025 and 4.06% in FY2021. Returns on book equity are the strongest number here, roughly 22% in FY2026, and there is no preferred stock to complicate the net-income-to-common figure. But capital intensity is climbing (capex $26.64B in FY2026 vs $10.26B in FY2021, about 64% of operating cash flow) and the 10-K itself never claims a durable moat: it names a long list of physical, eCommerce, wholesale-club, marketplace, social-commerce and 'emerging agentic' competitors, says it competes primarily on price, selection and location, and warns its own strategy may fail to hold market position.
- ✓ 3. 10-Q takeaways
Q2 FY27 (quarter ended July 31, 2026): net sales $186.1B, +5.9% (+5.1% cc), with global eCommerce +23% and comps up in both U.S. segments. Gross profit rate rose 96 bps to 25.4% and operating income rose 28.8% to $9.4B, but the 10-Q attributes the gross-profit lift primarily to ~$2.9B of tariff refunds booked as a reduction to cost of sales in the quarter, so the operating gain is not clean. Below the line, a $1.2B net loss on equity/other investments (versus a $2.7B gain a year earlier) pulled consolidated net income down to $6.5B and diluted EPS to $0.80 from $0.88. Management raised FY27 guidance for sales, adjusted operating income and adjusted EPS, and raised capex to ~4.0% of net sales.
- ✓ 4. Corporate governance
Filled; members read this box.
- ✓ 5. Overview of the prior 3 years of 8-K filings
Filled; members read this box.
- ✓ 6. Other significant filings
Filled; members read this box.
- ✓ 7. Chronology of significant news and events
Filled; members read this box.
- ✓ 8. Comparables valuation interpretation
Filled; members read this box.
- ✓ 9. Insider trading interpretation
Filled; members read this box.
- ○ 10. Earnings-call notes
- ○ 11. Impression of the shareholder letter
- ○ 12. Scuttlebutt overview
- ✓ 13. Valuation and risk/reward summary
Filled; members read this box.
- ✓ 14. Current price suppression and potential catalysts
Filled; members read this box.
- ✓ 15. Conclusions
The call above.
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