Will Wal-Mart stock be worth $1 trillion by 2030?

major retailerWal-Mart (NYSE: WMT)It is currently valued at close to US$500 billion. It's one of the most valuable companies in the world, and there's still plenty of room for growth in the future. While it may seem like this already large retailer is running out of room to grow, that's not the case. The big question, however, is whether Wal-Mart can become the fastest-growing stock and possibly double in value by 2030.

Walmart has a variety of growth opportunities to capitalize on

Walmart's business is already huge. In the fiscal year ending January 31, 2024, the company's revenue reached an astounding $648.1 billion. In just three years, the company's revenue grew by 161 TP3T, while net profit increased by 151 TP3T to $15.5 billion.

While this may seem unsatisfactory for a true growth stock, some catalysts may accelerate Wal-Mart's growth going forward:

• Advertising Business. Wal-Mart recently announced plans to acquire the advertising business for $2.3 billion.Vizio The retailer believes that Vizio's smartphone has the opportunity to expand the profitability of its advertising business, thereby becoming more aggressive with competitors. The retailer believes that Vizio's smartphone has the opportunity to expand the profitability of its advertising business and thus compete more aggressively with its rivals.AmazonVizio's SmartCast, which gives users access to apps and free channels, currently has 18 million active accounts, and in 2023, Vizio is looking at $1.7 billion in revenue and a relatively low $28.2 million in profit. With Walmart's financial and physical backing, the retailer may have more room to grow in this area.

• E-commerce and "Walmart+" subscriptions continue to be a major opportunity for Walmart. Last fiscal year, Walmart's e-commerce revenue reached the $100 billion milestone, and it now accounts for 13% of total revenue. It now accounts for 13% of total revenue, and with Walmart's launch of Walmart+ subscriptions, including free shipping, e-commerce is likely to be a major focus for the company going forward, as it has been one of the fastest-growing areas of the business. In the final quarter of fiscal 2024, Walmart's consolidated郃 net revenues grew by 5.7% year-over-year, but online sales in the U.S. grew by 17%, which rises to 23% when global markets are considered.

In a few years, Wal-Mart's stock may look cheap.

Walmart's stock price is fluctuating near all-time highs. This may make investors think twice about buying the stock. But when you consider its growth opportunities and earnings and revenue multiples, Walmart's valuation doesn't seem too expensive.

The retail stock trades at a price-to-earnings ratio of 31 times and a price-to-book ratio of just 0.8 times. Amazon currently appears to be Wal-Mart's biggest competitor, trading at 64 times Wal-Mart's profits and more than 3 times its revenue. Compared to Wal-Mart, Amazon's impressive growth over the years and its strong cloud computing business make it even more attractive to growth-oriented investors.

However, if Walmart can play a bigger role in the e-commerce space and increase its growth rate, it's not unreasonable to think that the stock could command higher revenue and earnings multiples in the future. Combine that with more earnings growth from Wal-Mart's future opportunities, and the stock certainly has the potential to become a $1 trillion stock in the future.

Will Walmart reach $1 trillion by 2030?

Wal-Mart is a dominant force in retailing and has the potential to become a giant in advertising and even in e-commerce, where I believe Wal-Mart's valuation could top $1 trillion by 2030. The company's pricing power gives it a huge advantage over many other retailers. As e-commerce becomes a larger portion of its total revenue, the company's growth rate should increase, attracting more growth investors in the process.

Although Wal-Mart is currently trading near its highs, long-term investors need not be overly concerned, as the business is doing very well and will be worth much more in the future.

Should you invest $1,000 in Wal-Mart now?

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John Mackey, former chief executive officer of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors.David Jagielski has no position in any of the stocks mentioned above.The Motley Fool has stock recommendations for Amazon and Wal-Mart.The Motley Fool has a disclosure policy. The Motley Fool has a disclosure policy.

Will Walmart Stock Be Worth $1 Trillion by 2030? Originally Posted by The Motley Fool