Walmart Share Price Forecast: Wal-Mart And Google Can Eventually Neutralize The Threat From Amazon and Whole Foods

motek 1The article was written by Motek Moyen Research Seeking Alpha’s #1 Writer on Long Ideas and #2 in Technology  – Senior Analyst at I Know First

Walmart Share Price Forecast


  • Amazon’s takeover of Whole Foods has received federal authority’s approval. Wal-Mart’s grocery business is now clearly under siege.
  • However, Google’s help in voice-assisted smart online shopping could help Wal-Mart minimize the threat from Amazon/Whole Foods.
  • WMT is relatively undervalued compared to its sector/industry peers. It is therefore suitable for value investors.
  • With assistance from Google, Wal-mart online business could eventually improve to the point that Amazon will start feeling the pain.
  • WMT enjoys positive near-term and long-term algorithmic forecasts.


I agree that Amazon’s (AMZN) takeover of Whole Foods is a serious siege against Wal-Mart (WMT). The grocery business generates more than 50% of Wal-Mart’s revenue. Amazon’s top-notch online ordering system and delivery network could make Whole Foods an efficient source for grocery items. Amazon touts more than 80 million U.S. Prime subscribers. Some of them could start ignoring Wal-Mart for their weekly grocery needs.

(Source: e-Marketer)

The threat is mobile/online ordering of organic grocery items from Whole Foods could be delivered by Amazon for free within the next 24 hours.  Amazon has also started reducing the price tags of Whole Foods’ groceries after it got federal approval for its takeover. Amazon is an expert in low-ball pricing. It could hurt the already-low operating margins of Wal-Mart.

Google And Wal-Mart Could Negate The Threat From Amazon

Fortunately for WMT shareholders, Google (GOOG) has decided to offer its Google Home smart speaker as a gateway to order products from Wal-Mart. Yes, Wal-Mart already has a capable online/mobile ordering and delivery system. However, help from  Google is still a welcome development. Alphabet’s e-commerce delivery system, Google Express is now integrated with the Google Home platform.

Instead of people picking-up their online order of groceries at the nearest Wal-Mart store, Google Express could deliver it to them.

(Source: Google)

Google is a formidable ally for Wal-Mart when it comes to online ordering of groceries and other retail products. The massive personal data library could be leveraged by Wal-Mart to create a better e-commerce network for its products. Wal-Mart indeed has more retail stores than Whole Foods. It has persistent presence in almost all towns and cities of America.

Google’s main contribution will be its cloud computing and Artificial Intelligence platforms. Wal-Mart could improve its logistics via Google’s AI-enhanced data centers and automation software. In return, Google will probably sell more of its Google Home smart speaker. It will also benefit from membership fees for its Google Express delivery service.

Going forward, Google could expand beyond its advertising-driving business by helping Wal-Mart improve its e-commerce platform. A symbiotic partnership with Google could lead to Wal-Mart eventually threatening the online marketplace of Amazon.

Google could be the key toward Wal-Mart finally breaking free from its slow growth disease. Due to its late entry in e-commerce, Amazon has grossly outperform the revenue growth of Wal-Mart. Amazon’s 20% or more annual revenue growth rate for the past five years is also why its stock notably outperformed WMT.

(Source: YCharts)

 Going forward, a robust growth in its e-commerce business could help Wal-Mart post 5% or more in annual revenue growth. This achievement could lead to investors raising the valuation of WMT. Wal-Mart deserves a higher valuation than its current Price/Sales ratio of 0.45. WMT’s Forward P/E ratio is very low when compared to AMZN’s, 18.05 vs. 135.14.

(Source: Morningstar)

Yes, Wal-Mart is a slow-growth boring company. However, it has a solid history of paying dividends and doing share buybacks. Value investors should really consider adding WMT to their long-term portfolios.


(Source: Morningstar)

 WMT is Undervalued Compared To Its Peers

 Based on the Relative Valuation Model of FundamentalSpeculation, Wal-Mart is undervalued compared to its sector/industry peers. The fair value of WMT is $109.70 based on average valuation of its peers. This underappreciation of the market for Wal-Mart will eventually get corrected. It might be wise for value-minded investors to go long WMT while it still trades below $80.


FundamentalSpeculation’s fair value calculation for Wal-Mart is based on the averaged cohort fair value of other companies with similar business metrics.



 Alpha Omega Mathematica also highlights the same relative undervaluation of WMT when compared to its peers. Wal-Mart presents a great investing opportunity for bargain-loving investors.

Final Thoughts

I rate WMT as a buy. The sheer size of Wal-Mart’s traditional retail store network is an obvious indication of its potential as an e-commerce player. Same-day delivery of groceries and other dry goods ordered online is highly possible in all locations in America.  Investors and analysts therefore should not dismiss its future threat to Amazon’s core business.

Wal-Mart’s annual revenue from e-commerce sales is only $15 billion. This is very low compared to Amazon’s revenue of $136 billion last year.  Wal-Mart still has a large growth potential in e-commerce. It only needs time to nurture the growth of its online retail platform.

(Source: eMarketer)

Google’s helping hand could accelerate the growth of Wal-Mart’s online marketplace. The truth is Google has been envious of Amazon’s success in online retailing. It needs Wal-Mart more than Wal-Mart needs Google. Wal-Mart’s products supply chain and retail stores network are necessary Google’s long-term strategy against Amazon’s marketplace.

Amazon’s advertising products competes with Google’s core business. It is only logical that Google also wants to hurt Amazon’s e-commerce business.

My buy recommendation for WMT is backed by its bullish algorithmic forecasts from I Know First.

Past I Know First Forecast Success With Wal-Mart

On September 11th, 2015, I Know First Research published a bullish article about Wal-Mart on In the article, the author stated that Wal-Mart’s new strategies to stay competitive and its refocus on the e-commerce sector would positively drive the stock price. Since the publication date WMT has returned 23.1%.

(Source: Google Finance: WMT)

This bullish forecast for WMT was sent to I Know First subscribers on September 11th, 2015. To subscribe today click here.

I Know First Algorithm Heatmap Explanation

The sign of the signal tells in which direction the asset price is expected to go (positive = to go up = Long, negative = to drop = Short position), the signal strength is related to the magnitude of the expected return and is used for ranking purposes of the investment opportunities.

Predictability is the actual fitness function being optimized every day, and can be simplified explained as the correlation based quality measure of the signal. This is a unique indicator of the I Know First algorithm. This allows users to separate and focus on the most predictable assets according to the algorithm. Ranging between -1 and 1, one should focus on predictability levels significantly above 0 in order to fill confident about/trust the signal.

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