## Why Invest in Walmart Stock?
Walmart Inc. (NYSE: WMT) is the largest retailer in the world by revenue. The company operates a chain of hypermarkets, discount stores, and grocery stores in the United States and internationally. Walmart has a market capitalization of over $400 billion, making it one of the most valuable companies in the world.
There are several reasons why investors should consider investing in Walmart stock.
### Strong Financial Performance
Walmart has a long history of strong financial performance. The company has increased its revenue and earnings per share for over 50 consecutive years. In fiscal 2022, Walmart reported revenue of $572.75 billion and earnings per share of $6.28.
Walmart’s financial performance is driven by its large scale and its ability to offer low prices to customers. The company has a strong presence in both urban and rural areas, and it operates over 11,000 stores worldwide. Walmart also has a strong e-commerce business, which has grown rapidly in recent years.
### Defensive Business Model
Walmart’s business model is defensive, which means that it is less affected by economic downturns than many other businesses. During the COVID-19 pandemic, for example, Walmart saw increased sales as people stocked up on essential items.
Walmart’s defensive business model is also supported by its strong brand recognition and customer loyalty. The company has a reputation for offering low prices and good customer service, and it has a large base of loyal customers.
### Growth Potential
Walmart has significant growth potential, both in the United States and internationally. The company is continuing to expand its store base in the United States, and it is also investing in its e-commerce business.
Walmart is also expanding internationally. The company has a presence in over 20 countries, and it is continuing to open new stores in new markets.
### Value Stock
Walmart stock is currently trading at a discount to its intrinsic value. The company’s forward price-to-earnings (P/E) ratio is only 22, which is below the average P/E ratio of companies in the S&P 500 index.
Walmart’s stock is also trading at a discount to its historical average. The company’s stock price is currently trading at around $130, which is below its average price over the past five years.
### Risks
There are some risks associated with investing in Walmart stock. These risks include:
* **Competition:** Walmart faces competition from other retailers, both online and offline. The company also faces competition from Amazon.com, which is a major player in the e-commerce market.
* **Rising costs:** Walmart’s costs are rising, due to factors such as inflation and labor shortages. The company may need to raise prices in order to maintain its profit margins.
* **Economic downturn:** Walmart’s sales could decline during an economic downturn. The company’s sales declined during the Great Recession of 2008-2009.
### Conclusion
Walmart stock is a good investment for investors who are looking for a stable, defensive stock with growth potential. The company has a long history of strong financial performance, and its business model is less affected by economic downturns than many other businesses. Walmart stock is also trading at a discount to its intrinsic value.
Investors should be aware of the risks associated with investing in Walmart stock, but the company’s strong financial performance and growth potential make it a good investment for many investors.
## Reasons to Invest in Walmart Stock
* Strong financial performance
* Defensive business model
* Growth potential
* Value stock
## Risks of Investing in Walmart Stock
* Competition
* Rising costs
* Economic downturn