Amazon.com, Inc. (NASDAQ:AMZN) and Walmart Inc. (NYSE:WMT) are the two largest retailers in the world by Market Cap.
Source: companiesmarketcap.com
On a strictly retail revenue basis, Walmart is much bigger than Amazon with retail revenue of $600 billion versus AMZN's $280 billion. Including Amazon's non-retail business, Walmart is still the larger of the two in revenue $600 billion to Amazon's $502 billion.
In terms of online sales, Amazon is much larger, but Walmart is second. Note that WMT's total online sales are greater than Home Depot, Target and Costco combined.
Of course, Amazon generates most of its profits from its cloud service entity AWS and we will break down Amazon's revenue between retail and cloud services later in this article.
In this article, I will compare AMZN to WMT to see which is the better long-term buy.
Amazon and Walmart's Stock Key Metrics
As you can easily see in the table below, Walmart is a larger company based on revenue (Line 2). And when it comes to Price/Sales (Line 3) Walmart appears to be a much better value with a ratio of 0.7x versus AMZN's 2.0x.
Gross Margins (Lines 5, 8 and 9) are also interesting with AMZN and WMT having very different gross margin overall (Line 5) 43% to 24%, but Walmart has a higher GM percentage (37%) than Amazon's 22% when compared to Market Value (Line 8).
This could imply that Walmart is relatively underpriced compared to Amazon.
The PE Ratio (Line 11) is another metric where Walmart's PE of 27.3x appears to be undervalued compared to Amazon's negative 970x.
Price to FCF (Free cash flow) is an area where Walmart once again clearly outperforms AMZN. That puts the Price/FCF ratio strongly in Walmart's favor with a much lower ratio of 56x compared to AMZN's negative -38.5x.
Walmart's dividend rate of 1.6% (line 18) is higher than Amazon's since it doesn't pay a dividend.
Based on current financial metrics, Walmart has better numbers than Amazon.
Is Amazon A Direct Competitor To Walmart?
Amazon and Walmart compete in the online world but Walmart's largest revenue source is groceries and Amazon is only a minor competitor there with Whole Foods.
In the online world, Amazon sells virtually everything whereas Walmart's selections are more limited.
A breakdown of Walmart's revenue from the most recent 10K gives you a better idea of their sales by source with grocery being the dominant one.
How Are Amazon And Walmart Stocks Different?
A big difference between the two companies is the huge effect AWS has on the profits of Amazon. Note the minuscule profit margin of 1.5% from e-commerce compared to AWS's margin of 28%. Basically, Amazon is a cloud service provider with a huge e-commerce division attached.
If we look at analysts' ratings for both stocks we see that Amazon and Walmart are both rated highly by analysts. Amazon has 73 Buy recommendations and four Sell recommendations.
Walmart on the other hand has 32 Buys but only one Sell.
Quants, on the other hand, seem not to be enamored with either, ranking both Amazon and Walmart with a solid Hold rating.
Do the quants know something about Amazon and Walmart that the analysts don't?
Over the last year neither has done well on a Price Return basis with Amazon down a breathtaking 39% versus Walmart's drop of only 1%.
Both these stocks are more fairly valued now than they were one year ago. Still, are they reasonable enough for investment in 2023 considering the risks for the world economy, rising interest rates, and customer hesitation?
Is Amazon Or Walmart's Stock A Better Buy?
One of the advantages Walmart has over Amazon is the consistent share buyback plan that has been in place for years. Looking at the share comparison between the two companies we can see that Walmart's share count has dropped by 19% over the last 10 years while Amazon's has increased by 13%.
The one area of concern regarding Amazon is the huge negative FCF (Free Cash Flow) over the last two years. On a TTM (Trailing Twelve Month) basis, it was a negative $26 billion. Over the last two years, the total is over $40 billion.
Walmart's FCF is nothing to brag about but at least it is positive.
Amazon has also recently announced 18,0000 layoffs, about 6% of its workforce. That does not sound like Amazon is expecting a pick-up in revenues any time soon.
Generally speaking, neither company has had a good year, so any investment decision would have to be based upon significant improvement going forward.
I think Walmart has better and more conservative financial metrics and a more stable economic value proposition selling mainly groceries. Walmart is also buying back shares.
Amazon still has severe margin problems with the large e-commerce portion of its business and the profitable AWS portion of the business may struggle to keep Amazon's historical price elevated. Amazon's price-to-sales ratio may struggle to reach previous highs thereby limiting future gains.
I rate Walmart a Buy and Amazon a Hold.
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On a strictly retail revenue basis, Walmart is much bigger than Amazon with retail revenue of $600 billion versus AMZN's $280 billion. Including Amazon's non-retail business, Walmart is still the larger of the two in revenue $600 billion to Amazon's $502 billion.
Walmart currently has an average brokerage recommendation (ABR) of 1.60, on a scale of 1 to 5 (Strong Buy to Strong Sell), calculated based on the actual recommendations (Buy, Hold, Sell, etc.) made by 29 brokerage firms. An ABR of 1.60 approximates between Strong Buy and Buy.
In 2022, Amazon closed its divide in terms of total revenue, as it generated over $513 billion in revenue, compared to over $572 billion in revenue from Walmart.
With that in mind, there's a clear path for Amazon to achieve a $5 trillion valuation in the next 10 years. If it gets there, investors who buy its stock today would earn a whopping 371% return.
Amazon is far ahead of Walmart in e-commerce. Amazon's early mover advantage and focused strategy of getting product to customers quickly and cheaply has enabled it to capture more than five times the e-commerce share of Walmart (Figure 2 above).
Walmart Inc quote is equal to 146.420 USD at 2023-05-28. Based on our forecasts, a long-term increase is expected, the "WMT" stock price prognosis for 2028-05-19 is 177.037 USD. With a 5-year investment, the revenue is expected to be around +20.91%. Your current $100 investment may be up to $120.91 in 2028.
The 35 analysts offering 12-month price forecasts for Walmart Inc have a median target of 169.00, with a high estimate of 180.00 and a low estimate of 145.00. The median estimate represents a +15.39% increase from the last price of 146.46.
The higher paying positions at Walmart include software engineer, co-manager, inventory management specialist, and department manager. A worker with the title software engineer salary at Walmart can earn an average yearly salary of $123,821.
Amazon has been one of the best long-term investments of the past two decades. April 13, 2023, at 4:06 p.m. After struggling through a difficult year in 2022, Amazon.com Inc. (ticker: AMZN) shares are once again on the rise in 2023.
Recent marked-down results and depressed estimates do not accurately represent Amazon's longer-term growth and profitability prospects. Amazon could recover quickly, robustly boosting its bottom-line profitability. Amazon remains one of my top stock picks for 2023.
But with so many potential Amazon alternatives out there, which are the top competitors? Within the several industries it operates in, some of Amazon's top competitors include Alibaba, eBay, Walmart, Target, Netflix, Disney+, Microsoft Azure, Google Cloud Platform, etc.
While their market shares may be different percentages (Amazon owns 39% of all US ecommerce sales, while Alibaba owns 58.2% of all retail ecommerce shares in China), they each dominate their respective countries in which they began.
Alibaba was founded on 4 April 1999 by Jack Ma as a B2B e-commerce site and soon branched out into B2C markets and various other fields. Alibaba now is quite similar to Amazon in terms of the different industries that both operate.
Amazon's sales and those of third-party sellers on its platform eclipsed Walmart's over the year ending in June, according to the New York Times, making the e-commerce giant the world's largest retailer outside China for the first time.
After phenomenal growth in 2020, Amazon wins the battle. The company is expanding rapidly while continually improving its service and fast delivery. But keep an eye on Walmart. With a renewed customer focus and an established retail presence, Walmart could continue to see amazing growth.
In addition to Amgen, Inc.(NASDAQ:AMGN), other Fast Money stocks that are widely held by elite hedge funds include Tesla, Inc. (NASDAQ:TSLA), UnitedHealth Group Inc. (NYSE:UNH), and Microsoft Corporation (NASDAQ:MSFT).
What Do Analysts Say About Walmart? In the last 90 days, 29 of 41 analysts rated WMT stock as either a buy or strong buy. Their average price target for WMT stock is $161, which implies a potential upside of 13% from the closing price on February 24, 2023.
On average, Wall Street analysts predict that Walmart's share price could reach $168.05 by May 22, 2024. The average Walmart stock price prediction forecasts a potential upside of 14.98% from the current WMT share price of $146.16.
Fintel reports that on May 19, 2023, UBS maintained coverage of Walmart (NYSE:WMT) with a Buy recommendation. As of May 11, 2023, the average one-year price target for Walmart is 168.08.
The 43 analysts offering 12-month price forecasts for Amazon.com Inc have a median target of 135.00, with a high estimate of 165.00 and a low estimate of 85.00. The median estimate represents a +12.43% increase from the last price of 120.08.
Walmart is owned by its shareholders. The Walton family is the largest shareholder of Walmart, holding 50% of the company's shares. The Walton family acquired such high ownership of the company because they are the descendants of Sam Walton, who founded the company.
Meet Walmart heir Lukas Walton, one of the richest millennials in the world: with a US$20 billion net worth at 36, he's focusing on philanthropy over the retail empire his grandad Sam Walton founded.
Although the largest company by market capitalization, Apple's global revenue did not manage to crack the top ten of companies. Rather, American multinational retailer Walmart was ranked as the largest company in the world by revenue. Walmart also had the highest number of employees in the world.
Walmart is the largest American employer, with a workforce of nearly 2.2 million people. However, because of its international reach, only 1.3 million of those were employed in the United States. Each of America's 10 largest employers has a workforce of more than 300,000 people.
Walmart is the world's largest company by revenue, according to the 67th edition of the Fortune 500. The retail giant owns and operates more than 10,500 markets, discount department stores, and grocery stores in 24 countries.
The most valuable company of all time, however, was the Dutch East India Company (VOC). According to howmuch.net, its worth reached a staggering $8.28 trillion in 1637. Lovemoney.com reports the same value and gives some more information: “The value of the company […]
One of the best reasons to invest in Amazon is its swiftly growing cloud computing business with Amazon Web Services (AWS). The platform boasts a leading 34% market share, with the industry worth $368.97 billion and expected to see a compound annual growth rate (CAGR) of 15.7% until 2030.
The current Amazon stock forecast suggests this tech giant's fair value will reach $2,000 per share by 2030. And this comes with lightened projections due to the current bear market and overall uncertainty.
The consensus AMZN stock forecast for the next 12 months stood at $136.86 a share. Meanwhile, the highest Amazon stock forecast for 2024 was $192, with the lowest at $106.
But one thing you won't get when you invest in Amazon is a stream of dividend payments. While many companies that issue stocks pay dividends on a regular basis (with some even steadily increasing their dividends through the years), Amazon doesn't pay dividends to shareholders.
It's trading only around 14 times forward earnings now. This cheap valuation provided Google's dominant market-leading position and future growth prospects with significant profitability potential, making Google an ideal stock to own for the long haul.
Walmart WMT -0.6% is partnering with veterinary telehealth provider Pawp. They will offer Walmart+ (extra service subscribers) free access to virtual veterinarians for a year. It started this week. The program to go into telehealth is in direct competition with Amazon AMZN +0.9% .
Walmart was also the largest company in the world based on its number of employees, with some 2.3 million all over the world. ... The 100 largest companies in the world ranked by revenue in 2022 (in billion U.S. dollars)
A June report from an analytics firm has Amazon knocking Walmart out of its No.1 retailer slot by 2024. Walmart bet on a store-based approach years ago, but consumers changed their habits and Walmart is soon to pay the price.
But with so many potential Amazon alternatives out there, which are the top competitors? Within the several industries it operates in, some of Amazon's top competitors include Alibaba, eBay, Walmart, Target, Netflix, Disney+, Microsoft Azure, Google Cloud Platform, etc.
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The Biggest Companies in the United States by Market Capitalization (March 24, 2023) As of March 23, 2023, with its market capitalization of $2,514 billion, APPLE INC. is the most valuable company in the United States, according to the CEOWORLD magazine, a list of the world's biggest companies by market cap.
Microsoft Net Worth 2023: Assets Income Revenue PE Ratio
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Introduction: My name is Nicola Considine CPA, I am a determined, witty, powerful, brainy, open, smiling, proud person who loves writing and wants to share my knowledge and understanding with you.
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