It can be tricky -- and maybe even a little bit dangerous -- to make predictions about a particular company's future. And even more so of its stock. There are always more unknowns than knowns, and nobody owns a crystal ball.
Still, as an investor, it can be helpful to at least try to figure out what awaits, if only as a means of forcing you to analyze what's working for a company and what isn't.
To this end, here's a five-year outlook for Walmart (WMT 1.60%) and its shares.
Image source: Getty Images.
You know the company, but...
Walmart is, of course, the world's biggest brick-and-mortar retailer, turning last year's sales of $681 billion into net income of $19.4 billion. Online rival Amazon boasts a much bigger market cap, but its 2024 revenue of $638 billion was behind Walmart's, and its net income was $20 billion.
The majority of Walmart's business is done within the United States, where 90% of the nation's population lives within 10 miles of one of its 5,206 domestic stores (including Sam's Club warehouses).
Still, its 5,591 international stores collectively did $122 billion worth of business during the fiscal 12-month stretch ending in January. All told, the company's 2.1 million employees serve more than 250 million customers worldwide every single week. Clearly, Walmart has incredible reach here and abroad.
It's not just a simple retailing operation, though. It used to be. But in an era where rivals like Amazon have evolved from being mere retailers into companies that simplify and cater to consumers' lifestyles, Walmart has followed suit. For instance, nearly all of its stores now offer curbside pickup of online orders -- Walmart's e-commerce business is still growing at a double-digit pace after eclipsing the $100 billion mark in 2023. While it's only a fraction of Amazon's size, Walmart's e-commerce arm's share of North America's online shopping market now stands at a healthy 10.6%, according to Digital Commerce 360, versus Amazon's 39.7%.
Looking ahead
Great, but what about the foreseeable future? The easiest way to get a handle on how Walmart is apt to change over the coming five years is by breaking down each area of potential change. Some of its likely changes are quantitative; others are qualitative.
Operations
Most good companies constantly look for ways to make their operations more efficient. Walmart is no exception. And one of the chief ways it's doing so is on the automation front. Last year, it invested $200 million in autonomous forklifts, for example, and earlier this year, it forged a partnership with Symbotic to continue the co-development of AI-enabled warehouse robots that will eventually be deployed in each of the company's 42 domestic distribution centers.
Given the money-saving success it's already experienced with automation -- as much as 30% -- look for the use of more artificial intelligence robotics in the future, even including within its stores.
New kinds of monetization
Selling merchandise will remain Walmart's core business for the indefinite future. As time marches on, though, look for the retailer to tack on other types of revenue that not only don't cannibalize its existing business, but also augment it.
Case in point: Its advertising venture is monetizing Walmart.com by allowing brands to pay to more prominently feature their goods at the shopping website. Although last year's worldwide advertising revenue only reached $4.4 billion, that's high-margin revenue that grew 27% year over year, which has since accelerated its growth.
And that's just advertising. Although the ultimate purpose of the program is to spur more per-customer spending, last quarter's income from membership in programs like Walmart+ was up 15.3%. Don't be surprised to see this revenue-bearing (and business-building) offering continue gaining traction, along with the continued expansion of its Vizio smart-television venture that serves as an advertising platform of its own.
Revenue
As for revenue, analysts expect Walmart's top line to reach $769.5 billion for calendar year 2027 (fiscal 2028). This projection simply extends existing trends, however, and as such may slightly underestimate what's actually in store.
See, one way or another, the industry will eventually figure out how to work around nagging tariffs and other rising costs. Walmart, for instance, manages a sizable private label business, with Numerator reporting the country's five most purchased private label brands are Walmart's in-house goods. Meanwhile, in 2023, the company shared plans to grow its international revenue from less than $120 billion then to $200 billion by 2028, largely driven by more thoughtful omnichannel selling and market-specific innovation.
Given all the tools it has at its disposal, along with its sheer reach, by 2030 the company's yearly top line could easily be $890 billion, if not more.
Profit
The same analysts looking for 2027 revenue of $769.5 billion are calling for a bottom line of $25.6 billion for that same year -- which is a reasonable guess.
Although the expected revenue growth may underestimate what's actually in store, in light of lingering cost increases, this excess revenue growth could prove a little more expensive to drive than is currently anticipated. Assuming these costs finally start cooling off after that, though, margins should start widening somewhat before 2030, when Walmart is likely to report net income in the ballpark of $30 billion, if not a little more.
Shareholders should fare slightly better, thanks to continued stock buybacks that improve per-share profitability. As of April, the retailer had repurchased $7 billion worth of its own stock over the course of the prior two years, and there's nearly another $6 billion already authorized to buy back even more shares. And if history is any indication, the company's board of directors will approve a similar share repurchase program once this one reaches the full extent of its authorization.
Price
Finally, projecting a stock's price five years into the future is the most dangerous forward-looking endeavor of all. Not only must you make assumptions about a company's fiscal results based on a judgment call about that organization's continued competitiveness, but you must also guess as to how investors as a whole are going to feel about that company in the future. That's a tall order to be sure, since feelings dictate the degree of premium the market is willing to support.
So, take the number with a big grain of salt. But based on what we know and can reasonably presume right now, Walmart's stock price is apt to be around $143 by 2030, if not a bit higher.
This assumes annualized appreciation of around 7%. It doesn't, however, factor in any dividends the stock will pay in the meantime. The ticker's forward-looking dividend yield currently stands at a little less than 1%, which really isn't enough to view Walmart as an income-producing dividend stock.
NASDAQ: WMT
Key Data Points
But is Walmart stock a buy?
There are certainly more compelling growth stories out there. But that's always been the case.
Even the strongest and fastest-growing of retailers is largely limited by population growth and sheer saturation of the marketplace. An already massive one like Walmart just isn't going to be able to tack on a ton of incremental growth each and every year.
This massive size, however, is also the crux of the reason that risk-averse investors will want to jump into a stake in Walmart stock despite its modest growth potential, especially given that it's still priced where it was as of early this year. It's safe -- at least as safe as any stock of its kind can be.
Just be sure you're stepping into it as a long-term investment. It can still be a disappointing short-term holding from time to time.
