Walmart Shares Plunge: What Investors Should Know

BENTONVILLE, Ark. — Walmart Inc.’s stock price fell 3.46% to $88.55 on March 10, 2025, as questions arise over its long-term growth prospects despite a history of solid returns.

Since its IPO in 1970, Walmart has created numerous millionaires among its investors, yielding over 150% returns in the past five years alone. However, as market conditions shift, many are wondering if Walmart can continue this trend.

The retail giant announced in late February that its U.S. sales for the fiscal fourth quarter, which ended on Jan. 31, 2025, increased by 5%. This growth outperformed competitors like Target and Kroger, largely driven by e-commerce expansion, price leadership, and a broader product range.

“We’re gaining market share, our top line is healthy, and we’re in great shape with inventory,” said CEO Doug McMillon in a recent press release.

Additionally, Walmart saw a 3% increase in customer traffic, building on the prior year’s 4% rise. This consistent customer loyalty is vital for sustained sales growth in a competitive retail environment.

With its core retail business strengthening, Walmart is diversifying into new areas, seeing a 29% increase in its global advertising business and 16% growth in membership income during the last quarter. Its marketplace segment showed an impressive 34% increase, underscoring enhanced profitability.

The company’s adjusted operating profit rose by 9%, nearly twice the rate of net sales. Analysts project that Walmart’s operating margin could climb beyond the current 4% as expansion into lucrative segments continues.

Nevertheless, Walmart’s stock faces scrutiny due to high valuation levels, currently priced at 40 times earnings and 1.1 times sales—both near a decade high. In comparison, Costco, which boasts stronger earnings through its membership model, trades at 60 times earnings and 1.8 times sales.

Despite these concerns, some analysts remain optimistic that Walmart can justify its pricing premium. “If Walmart continues to capture market share while enhancing profitability, we could see another decade of solid returns for shareholders,” commented a financial analyst.

However, uncertainty looms over potential economic slowdowns that may impact consumer spending, causing some to consider alternatives like Procter & Gamble, which offers a more robust dividend.

For investors, Walmart’s leadership in the retail market, combined with various growth opportunities, suggests that its stock could be a valuable component of a retirement portfolio. Its historical resilience and strategies for sustainable growth present a positive outlook despite current market fluctuations.

As of now, Walmart remains a stock worth monitoring closely.