QSQuantSignals Research/Scion Template
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QS Research · Michael Burry's Scion Capital analyst template · 2006

Walmart Inc. (WMT)

As of 2026-11-02 · 11/15 boxes filled from SEC filings and market data

Conclusion: WATCH

Conviction low · base case -30% · downside -60% · upside +39%

Using TTM EBITDA of $47.37B (N13) and a 15.5x EV/EBITDA base multiple—equivalent to Walmart's 10-year average P/E of 32x on TTM EPS of $2.78 (S11, N28, N14, N5)—the base-case equity value is (47.37×15.5−28.4 net debt)/7.934B shares = $88.9, -29.6% versus the $126.45 price. Downside at 9x peer-like EV/EBITDA is $50.2 (-60.3%), while upside at Costco-like 30x is $175.5 (+38.8%). The long rule fails because the base case is not +30% and the short rule fails because the upside case exceeds +25%, so this is a watch rather than a high-conviction short. The market is paying a premium multiple for steady but not exceptional growth, and the risk/reward is skewed negatively.

Key numbers

The 15 boxes

  1. ✓ 1. Long-form business notes

    Walmart operates through Walmart U.S., Sam’s Club U.S., and international markets, combining retail stores, memberships, eCommerce/marketplace, financial services, and health and wellness. Aggregate revenue grew from $555.2B in FY2021 to $706.4B in FY2026, with operating income from $22.6B to $29.8B and operating cash flow from $36.1B to $41.6B. The business shifted from FY2021 pandemic-era eCommerce acceleration to a more automated, AI-invested omnichannel model by FY2026, while capex rose from $10.3B to $26.6B. Provided sources are risk-factor and aggregate financial data only, without segment gross margin or unit economics.

  2. ○ 2. Competitive advantage

    Walmart's FY2021-FY2026 data shows scale, positive and generally rising operating income, and strong operating cash flow, consistent with a cost/scale advantage, though the sources do not explicitly identify a durable moat. The 10-K text stresses everyday low cost and stakeholder value as sources of competitive advantage but also warns of intense competition. No margin or return ratios are provided.

  3. ✓ 3. 10-Q takeaways

    Walmart's Q2 FY2027 (three months ended 2026-07-31) total revenues rose 5.9% YoY to $187.9B, with Walmart U.S. comps +3.3% and Sam's Club +8.6%; gross margin expanded 96 bps to 25.4%, boosted by $2.9B tariff refunds, while operating income rose 28.8% to $9.4B. Q2 net income fell to $6.5B from $7.2B on fair-value investment losses. Six-month operating cash flow was $19.7B, free cash flow $5.5B, and buybacks totaled $5.1B under a new $30B program. Risk factors were unchanged from the 10-K.

  4. ✓ 4. Corporate governance
  5. ✓ 5. Overview of the prior 3 years of 8-K filings
  6. ✓ 6. Other significant filings
  7. ✓ 7. Chronology of significant news and events
  8. ✓ 8. Comparables valuation interpretation
  9. ✓ 9. Insider trading interpretation
  10. ○ 10. Earnings-call notes
  11. ○ 11. Impression of the shareholder letter
  12. ○ 12. Scuttlebutt overview
  13. ✓ 13. Valuation and risk/reward summary
  14. ✓ 14. Current price suppression and potential catalysts

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