When I look at Walmart today, I’m asking myself a simple question: is this a buy, a hold, or a sell going into 2025 and beyond? In this article, I’ll break down the latest news, the numbers, and the bigger picture to explain why I currently see Walmart as a sell.
Latest News and Outlook
Walmart recently raised its full-year sales and earnings outlook, which is a positive sign on the surface. But at the same time, they admitted that tariff costs are rising. To offset that, Walmart has already started raising prices on certain items, while holding others steady. Over time, I think this pressure will only worsen for customers as tariffs work their way deeper into product costs.
For a company built on being the “low-price, everything store,” this creates a serious headwind.
Competition and Innovation
For decades, Walmart’s model has been about low prices and one-stop shopping. But today, its biggest rival is Amazon. The two remain the top dogs in U.S. retail, and both compete globally as well. Walmart has adapted with in-store pickup, faster shipping, and marketplace expansion to allow third-party sellers—mirroring much of Amazon’s playbook.
They also leverage private label brands like Great Value, operate Sam’s Club memberships, run advertising and financial services, and continue to experiment. But the question is: are these innovations enough to truly outpace the competition?
Recent Performance
Looking at Walmart’s recent results:
- Q2 2025 adjusted EPS came in at $0.68, missing their prior $0.74 forecast.
- Revenue rose on strong U.S. grocery and health/wellness sales, plus a 25% jump in global e-commerce.
- The stock still fell due to the earnings miss and one-time legal and restructuring charges.
Stock performance has been mixed:
- Up about 3% in the past 6 months
- Up 7.6% year-to-date
- Up 28% over the past year
- Up 120% over the past 5 years
That long-term return actually outpaced the S&P 500 by about 30%. But in the short-term, Walmart is lagging behind the index.
Valuation and Fundamentals
This is where I get cautious:
- Dividend Yield: Just under 1%. A small perk, but not meaningful compared to other dividend stocks.
- P/E Ratio: Around 36.5, which is high for a non-tech, slow-growth stock. Many investors prefer something closer to 20.
- Balance Sheet: Assets vs. liabilities aren’t ideal—better than breaking even, but not quite at the 2:1 cushion I’d like.
- ROA & ROC: Return on assets (6.8%) and return on capital are decent.
- Price-to-Book: 9.34, not terrible.
Looking at alternatives:
- EV/EBITDA: About 18.9, worse than ~85% of retail peers.
- PEG Ratio: Forward 12-month PEG is 4.75—very high compared to most stocks I track, which usually fall between 1.5–3.
In short, Walmart looks expensive for the growth it’s delivering.
Hedge Funds, Analysts, and Insiders
Hedge fund ownership rose by 324,000 shares in Q2, with about 64% buys vs. 36% sells. But insider activity shows 9.6 million shares sold in the last 3 months—never a great sign.
On the flip side, 95% of analysts currently rate Walmart a “buy,” with only 2% saying hold or sell. Wall Street seems bullish, but insiders appear to be more cautious.
Tariffs and the Bigger Picture
To me, tariffs are the biggest long-term concern. With Trump back in office and tariffs likely sticking around for years, Walmart’s cost structure could stay under pressure. And for a company whose brand promise is built on the lowest prices, higher costs erode that competitive edge.
Employee and Culture Check
I also like to look at how employees rate a company. On Glassdoor, Walmart sits at 3.4 out of 5 stars:
- 55% would recommend working there
- 58% approve of the CEO
Those numbers are pretty average. Not terrible, but not the kind of “best-in-class” culture I like to see in a long-term hold.
My Verdict on Walmart
Taking everything together—valuation, tariffs, growth outlook, competition, and even culture—I don’t see Walmart as a compelling investment right now.
If I owned Walmart stock today, I’d be leaning toward selling and putting that money into an S&P 500 index fund instead. Over the long haul, I don’t think Walmart will consistently outperform the index.
Final Thoughts
This is just my analysis as of August 2025. Walmart has proven itself adaptable in the past, but between tariffs, high valuation, and tough competition, I think the safer bet for me is elsewhere.
Disclaimer: This is not financial advice. Always do your own research and consult with a licensed financial advisor before making investment decisions.