It's your call: bet on a loser trying to turn itself around or bet on a winner doing everything it can to pummel an aggressive rival.
"At a fundamental level, investors need to ask themselves if they want to invest in a retailer that is rocking the boat or one whose boat is or will soon be rocked; we choose the former," says Barclay's analyst Karen Short. "Walmart is taking advantage of tax reform to improve its competitive positioning and accelerate its transformation, while also generating solid earnings per share growth of 7%-13% in fiscal year 2019."
Shares of the world's largest retailer plunged 10.2% to $94.11 on Tuesday after fourth quarter earnings came up short of Wall Street's estimates. Walmart's full year profit outlook of $4.75 to $5.00 a share also fell shy of analyst forecasts of $5.00 a share.
"It was a good quarter, a good year," Walmart Chief Financial Officer Brett Biggs told TheStreet in an interview.
Hard to argue with that.
In 2017, Walmart U.S. eCommerce sales rose 44% and same-store sales increased 2.1%, ahead of 2016's 1.4% growth rate. Still, Biggs acknowledged Walmart will be investing more this year to boost its capabilities across eCommerce and other areas of the business. And that comes at price, one that Wall Street probably fully didn't understand headed into the announcement.
Walmart shares fell another 3% on Wednesday.
TheStreet caught up with Walmart CEO Doug McMillon late last year.