The Fundamental Case for and Against Wal-Mart Stores, Inc. (WMT)

Wal-Mart Stores, Inc. (NYSE:WMT) is an interesting stock at present. Now trading with a market value of 226.12B, the company has a mix of catalysts and obstacles that spring from the nature of its operations. In light of the many issues surrounding this company, we thought it was a good time to take a close look at the numbers in order to form a realistic perspective on the fundamental picture for this stock.

Wal-Mart Stores, Inc. (NYSE:WMT) Fundamentals That Matter

It’s generally a good idea to start with the most fundamntal piece of the picture: the balance sheet. The balance sheet health of any company plays a key role in its ability to meet its obligations and maintain the faith of its investment base. For WMT, the company currently has 6.55 billion of cash on the books, which is offset by 6.47 billion in current liabilities. The trend over time is important to note. In this case, the company’s debt has been growing. The company also has 199.72 billion in total assets, balanced by 123.6 billion in total liabilities, which should give you a sense of the viability of the company under any number of imagined business contexts.

Wal-Mart Stores, Inc. (WMT) saw 3.4 billion in free cash flow last quarter, representing a quarterly net change in cash of -322 million. Perhaps most importantly where cash movements are concerned, the company saw about 5.39 billion in net operating cash flow.

Wal-Mart Stores, Inc. (NYSE:WMT) Revenue Growth Potential

As far as key trends that demonstrate something of the future investment potential of this stock, we need to take a closer look at the top line, first and foremost. Last quarter, the company saw 117.54 billion in total revenues. That represents a quarterly year/year change in revenues of 0.01 in sequential terms, the WMT saw sales decline by -0.10.

But what about the bottom line? After all, that’s what really matters in the end. Wal-Mart Stores, Inc. (WMT) is intriguing when broken down to its core data. The cost of selling goods last quarter was 87.69 billion, yielding a gross basic income of 29.85 billion. For shareholders, given the total diluted outstanding shares of 3.05 billion, this means overall earnings per share of 1.00. Note, this compares with a consensus analyst forecast of 1.06 in earnings per share for its next fiscal quarterly report.

Is Wal-Mart Stores, Inc. (NYSE:WMT) Valuation Attractive

Looking ahead at valuations, according to the consensus, the next fiscal year is forecast to bring about 4.59 in total earnings per share. If we consider a median price to earnings ratio on the stock, that corresponds with a stock price of 16.60. However, one should always remember: the trends are more important than the forecasts. This continues to be an interesting story, and we look forward to updating it again soon on Wal-Mart Stores, Inc..

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