Walmart: Aiming For An Amazon-Like Valuation
Summary
- Walmart is aggressively expanding its e-commerce business and focusing on technology to expand margins.
- Over the past 5 years, this segment has grown at a CAGR of about 33%. Meanwhile, Amazon tries to build a presence with physical stores.
- In my opinion, Walmart is as much a technology business as Amazon.
- Both Walmart and Amazon are exceptionally well managed businesses, with strong focus on operational efficiency and customer satisfaction.
- WMRT trades at an EV/Sales of x0.7 and EV/EBIT of x17.7, as compared to x2.3 and x78 for AMZN respectively. I argue these multiples will eventually converge.
Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
not financial advise
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