Walmart Inc. (WMT): A Bull Case Theory

We came across a bullish thesis on Walmart Inc. on Compounding Dividends’s Substack by TJ Terwilliger. In this article, we will summarize the bulls’ thesis on WMT. Walmart Inc.'s share was trading at $103.05 as of September 25th. WMT’s trailing and forward P/E were 38.89 and 39.53 respectively according to Yahoo Finance.

Walmart Inc. (WMT) is a global retail powerhouse operating an extensive network of discount stores, supercenters, Sam’s Clubs, and e-commerce platforms across the U.S., Mexico, and other international markets. Traditionally known for its everyday low prices and broad product assortment, Walmart has delivered steady revenue growth of roughly 3.5% annually over the past 15 years, with EPS growing slightly faster at about 5%, largely due to share buybacks. The company operates on low net margins of 2.5–3% but has maintained a remarkable dividend track record, increasing payouts for 53 consecutive years, supported by a well-covered payout ratio.

While its core retail operations remain a slow, steady grower, Walmart has cultivated high-growth segments that are transforming the business. Its e-commerce platform, leveraging over 4,600 U.S. stores as distribution hubs, achieved 25% global growth in Q2, outpacing peers and enabling rapid delivery across markets, including under an hour in China and 15 minutes in India.

Walmart Marketplace, its third-party selling platform, and the Walmart+ membership program grew 17% and 15%, respectively, expanding reach and customer engagement. Even more compelling, Walmart’s advertising business, Walmart Connect, is scaling rapidly with 46% growth, generating high-margin revenue from in-store and online data insights.

Together, these initiatives are reshaping Walmart into a dual business: a traditional retail operation and a high-margin digital ecosystem encompassing e-commerce, memberships, and advertising. This evolution positions Walmart for substantial upside if the market begins to fully value its faster-growing, higher-margin segments, beyond the slow-moving grocery retailer narrative. The company now offers investors a rare combination of resilient cash flow, a strong dividend history, and exposure to accelerating digital businesses.

Previously we covered a bullish thesis on Target Corporation (TGT) by LongYield in May 2025, which highlighted the company’s digital momentum, cost control, and capital deployment despite near-term sales weakness. The company's stock price has depreciated approximately by 7.58% since our coverage due to macroeconomic headwinds. The thesis still stands as Target’s omnichannel strategy supports recovery. TJ Terwilliger shares a similar perspective but emphasizes Walmart’s dual business model with high-growth digital segments.

Walmart Inc. is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 105 hedge fund portfolios held WMT at the end of the second quarter which was 100 in the previous quarter. While we acknowledge the potential of WMT as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Disclosure: None.