Our Calculation Of Intrinsic Value: Walmart Inc.
The intrinsic value of Walmart Inc. is calculated using a DCF analysis, revealing a value of $25.57 per share, significantly lower than the current price of ~$109. Despite Walmart's strong market position and cash generation, the analysis suggests it trades above its intrinsic value, indicating a -77% margin of safety.
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Profile
Walmart Inc. (WMT) is the world’s largest retailer, operating more than 10,500 stores under the Walmart and Sam’s Club banners across the U.S. and international markets. The company blends brick-and-mortar scale with a rapidly expanding e-commerce ecosystem that now includes Walmart+, marketplace sellers, advertising, and last-mile fulfillment.
Walmart’s core retail model—high volume, aggressive pricing, and tight supply-chain control—delivers consistent customer traffic and durable competitive advantages. The company’s omnichannel strategy continues to strengthen as in-store pickup, delivery, and digital services scale toward higher-margin revenue streams such as advertising and memberships.
With steady revenue growth, disciplined cost management, and increasing free cash flow generation, Walmart remains one of the most resilient and diversified consumer staples companies globally.
DCF Analysis
Inputs
- Discount Rate: 10%
- Terminal Growth Rate: 3%
- WACC: 10%
Forecasted Free Cash Flows (in billions USD)
| Year | FCF | PV |
|---|---|---|
| 2025 | 16.0 | 14.5 |
| 2026 | 16.6 | 13.7 |
| 2027 | 17.3 | 12.9 |
| 2028 | 18.0 | 12.3 |
| 2029 | 18.7 | 11.6 |
Total Present Value of FCFs = ≈ $65.0B
Terminal Value Calculation
Using perpetuity growth model with 2029 FCF = $18.7B:
TV = (18.7 × 1.03) ÷ (0.10 − 0.03) = $275.2B
Present Value of Terminal Value = $171.0B
Enterprise Value
Enterprise Value = 65.0B + 171.0B = $236.0B
Net Debt
Cash & Equivalents: $9.4B
Total Debt: $65B
Net Debt = $34B
Equity Value & Per-Share Value
Equity Value = 236.0B – 34B = $202.0B
Shares Outstanding: ~7.9 billion
Intrinsic Value per Share ≈ $25.57
Conclusion
DCF Value: $25.57 per share
Current Price: ~$109
Margin of Safety: –77%
Walmart remains a global retail powerhouse with unmatched scale, a fortified omnichannel strategy, and expanding higher-margin segments like advertising and memberships. Its consistent cash generation and defensive business model justify a premium valuation. However, under conservative DCF assumptions that focus on free cash flow rather than revenue growth, Walmart continues to trade well above intrinsic value.
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