Unveiling Walmart's Intrinsic Value: A Deep Dive into the Retail Giant

As investors, we're constantly seeking to uncover the intrinsic value of companies, especially those with a significant market presence like Walmart Inc. (NYSE: WMT). With a market capitalization of $747.10 billion and an enterprise value of $800.63 billion, Walmart is a retail behemoth that demands our attention. Let's delve into the factors that contribute to Walmart's intrinsic value and explore whether the market has priced it correctly.



Walmart's intrinsic value is estimated to be $114.40 using the Discounted Cash Flow (DCF) model with a Growth Exit 5Y approach. This valuation method assumes a 5-year period of high growth, followed by a terminal growth rate. At the current market price of $93.00, Walmart's stock appears to be undervalued by approximately 23.00%.



Several key factors influence Walmart's intrinsic value calculation:

1. Discounted Cash Flow (DCF) Analysis: The DCF model is the primary method used to estimate Walmart's intrinsic value. This model takes into account the company's expected future free cash flows and discounts them back to their present value.
2. Growth Exit 5Y Model: This model assumes a 5-year period of high growth, followed by a terminal growth rate. The intrinsic value of $114.40 is derived from this model, indicating that Walmart's stock is undervalued at the current market price.
3. Market Cap and Enterprise Value: Walmart's market capitalization and enterprise value reflect the company's size and valuation in the market. With a market cap of $747.10 billion and an enterprise value of $784.37 billion, Walmart is a significant player in the retail industry.
4. Profitability Ratios: Walmart's profitability ratios, such as gross profit margin (24.70%), operating margin (4.31%), and net profit margin (2.92%), are important factors in determining its intrinsic value. These ratios indicate the company's ability to generate profits relative to its revenues.
5. Dividend Yield and Payout Ratio: Walmart pays an annual dividend of $0.83, which amounts to a dividend yield of 0.89%. The payout ratio is 34.29%, indicating that the company is distributing a relatively low proportion of its earnings as dividends. These factors contribute to the company's overall attractiveness as an investment.
6. Analyst Forecasts: The average price target for Walmart is $94.19, which is 1.28% higher than the current price. The consensus rating is "Strong Buy," indicating that analysts have a positive outlook on the company's future performance.
7. Financial Ratios: Walmart's financial ratios, such as return on equity (ROE) of 22.64%, return on assets (ROA) of 6.95%, and return on capital (ROIC) of 11.49%, reflect the company's efficiency in generating returns for its shareholders. These ratios are important factors in determining the company's intrinsic value.
8. Debt-to-Equity Ratio: Walmart's debt-to-equity ratio of 0.67 indicates that the company has a relatively low level of debt compared to its equity, suggesting a strong financial position. This factor contributes to the company's overall valuation and intrinsic value.



Walmart's international operations play a significant role in its overall intrinsic value. As of 2025, the company operates in over 24 countries outside the United States, contributing to a substantial portion of its total revenue. In fiscal 2019, international sales accounted for 24% of Walmart's total revenue, with Mexico and Central America, the United Kingdom, and Canada being its largest external markets.

The DCF analysis, which considers the cash flows generated by both domestic and international operations, supports the positive impact of international operations on Walmart's intrinsic value. Walmart's strategic approach to international expansion, both organically and through acquisitions, has helped the company maintain its competitive edge in the retail industry and create long-term value for its shareholders.



In conclusion, Walmart's intrinsic value is estimated to be $114.40 using the DCF model with a Growth Exit 5Y approach. The company's strong financial performance, dividend history, and international expansion strategy contribute positively to its overall intrinsic value. However, investors must remain cautious and consider other factors, such as market conditions and the company's future growth prospects, when evaluating its intrinsic value. By staying informed and maintaining a data-driven approach, investors can make more informed decisions about Walmart's stock and other investment opportunities.