Wal-Mart Stores Inc

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WMT : NYSE : Services
$71.14 | %
Today's Range: 70.89 - 71.69
Avg. Daily Volume: 8,300,600
08/26/16 - 4:00 PM ET

Financial Analysis


WAL-MART STORES INC's gross profit margin for the second quarter of its fiscal year 2016 is essentially unchanged when compared to the same period a year ago. The company has grown its sales and net income during the past quarter when compared with the same quarter a year ago, and although its growth in net income has outpaced the industry average, its revenue growth has not. WAL-MART STORES INC has very weak liquidity. Currently, the Quick Ratio is 0.19 which clearly shows a lack of ability to cover short-term cash needs. The company's liquidity has increased from the same period last year, indicating improving cash flow.

During the same period, stockholders' equity ("net worth") has remained virtually unchanged only decreasing by 2.97% from the same quarter last year. The key liquidity measurements indicate that the company is in a position in which financial difficulties could develop in the near future.

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Income Statement Q2 FY16 Q2 FY15
Net Sales ($mil)120319.0120229.0
EBITDA ($mil)8147.08438.0
EBIT ($mil)5630.06099.0
Net Income ($mil)3773.03475.0


Balance Sheet Q2 FY16 Q2 FY15
Cash & Equiv. ($mil)7676.05751.0
Total Assets ($mil)197886.0198620.0
Total Debt ($mil)47491.049055.0
Equity ($mil)76525.078871.0


Profitability Q2 FY16 Q2 FY15
Gross Profit Margin27.7227.04
EBITDA Margin6.777.01
Operating Margin4.685.07
Sales Turnover2.442.44
Return on Assets7.447.8
Return on Equity19.2419.64
Debt Q2 FY16 Q2 FY15
Current Ratio0.850.89
Debt/Capital0.380.38
Interest Expense0.0575.0
Interest Coverage0.010.61


Share Data Q2 FY16 Q2 FY15
Shares outstanding (mil)3100.03215.0
Div / share0.50.49
EPS1.211.08
Book value / share24.6924.53
Institutional Own % n/a n/a
Avg Daily Volume8253053.09029900.0

Valuation


BUY. This stock's P/E ratio indicates a discount compared to an average of 22.11 for the Food & Staples Retailing industry and a discount compared to the S&P 500 average of 25.13. To use another comparison, its price-to-book ratio of 2.89 indicates valuation on par with the S&P 500 average of 2.82 and a discount versus the industry average of 3.79. The current price-to-sales ratio is well below the S&P 500 average and is also below the industry average, indicating a discount. Upon assessment of these and other key valuation criteria, WAL-MART STORES INC proves to trade at a discount to investment alternatives within the industry.


Price/Earnings
1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
WMT 15.32 Peers 22.11   WMT 6.89 Peers 10.32

Discount. A lower P/E ratio than its peers can signify a less expensive stock or lower growth expectations.

WMT is trading at a significant discount to its peers.

 

Discount. The P/CF ratio, a stock’s price divided by the company's cash flow from operations, is useful for comparing companies with different capital requirements or financing structures.

WMT is trading at a significant discount to its peers.

 
Price/Projected
Earnings
1 2 3 4 5
premium   discount
  Price to
Earnings/Growth
1 2 3 4 5
premium   discount
WMT 15.83 Peers 19.44   WMT NM Peers 1.70

Discount. A lower price-to-projected earnings ratio than its peers can signify a less expensive stock or lower future growth expectations.

WMT is trading at a discount to its peers.

 

Neutral. The PEG ratio is the stock’s P/E divided by the consensus estimate of long-term earnings growth. Faster growth can justify higher price multiples.

WMT's negative PEG ratio makes this valuation measure meaningless.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
WMT 2.89 Peers 3.79   WMT -2.93 Peers -1.78

Discount. A lower price-to-book ratio makes a stock more attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet.

WMT is trading at a discount to its peers.

 

Lower. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios.

However, WMT is expected to significantly trail its peers on the basis of its earnings growth rate.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
WMT 0.46 Peers 0.54   WMT -0.48 Peers 6.56

Discount. In the absence of P/E and P/B multiples, the price-to-sales ratio can display the value investors are placing on each dollar of sales.

WMT is trading at a discount to its industry on this measurement.

 

Lower. A sales growth rate that trails the industry implies that a company is losing market share.

WMT significantly trails its peers on the basis of sales growth

 

 

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