Walmart currently trades at $124.26 and has been a dream stock for shareholders. It’s returned 175% since April 2021, tripling the S&P 500’s 57.8% gain. The company has also beaten the index over the past six months as its stock price is up 21.9%.

Is now the time to buy Walmart, or should you be careful about including it in your portfolio? Get the full stock story straight from our expert analysts, it’s free.

Why Is Walmart Not Exciting?

We’re glad investors have benefited from the price increase, but we're swiping left on Walmart for now. Here are three reasons there are better opportunities than WMT and a stock we'd rather own.

1. Long-Term Revenue Growth Disappoints

Examining a company’s long-term performance can provide clues about its quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul. Unfortunately, Walmart’s 5.3% annualized revenue growth over the last three years was tepid. This fell short of our benchmark for the consumer retail sector.

2. Low Gross Margin Reveals Weak Structural Profitability

At StockStory, we prefer high gross margin businesses because they indicate pricing power or differentiated products, giving the company a chance to generate higher operating profits.

Walmart has bad unit economics for a retailer, signaling it operates in a competitive market and lacks pricing power because its inventory is sold in many places. As you can see below, it averaged a 24.9% gross margin over the last two years. Said differently, Walmart had to pay a chunky $75.10 to its suppliers for every $100 in revenue.

3. Weak Operating Margin Could Cause Trouble

Operating margin is an important measure of profitability for retailers as it accounts for all expenses necessary to run a store, including wages, inventory, rent, advertising, and other administrative costs.

Walmart’s operating margin has generally stayed the same over the last 12 months, averaging 4.3% over the last two years. This profitability was lousy for a consumer retail business and caused by its suboptimal cost structureand low gross margin.

Final Judgment

Walmart’s business quality ultimately falls short of our standards. With its shares topping the market in recent months, the stock trades at 42.4× forward P/E (or $124.26 per share). This valuation tells us it’s a bit of a market darling with a lot of good news priced in - we think other companies feature superior fundamentals at the moment. Let us point you toward a safe-and-steady industrials business benefiting from an upgrade cycle.

Stocks We Like More Than Walmart

WHILE YOU’RE HERE: Top 9 Market-Beating Stocks. The best stocks don't just beat the market once. They do it again. And again. Robust revenue growth, rising free cash flow, returns on capital that leave their competition in the dust. The market has already rewarded these businesses.

But our AI platform says the party isn't over. Find out which 9 stocks made the cut this week — FREE. Get Our Top 9 Market-Beating Stocks for Free HERE.

Stocks that have made our list include now familiar names such as Nvidia (+1,326% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today.