Investors Are Paying More for Walmart Than Amazon. Here’s Why That Doesn’t Add Up.

Walmart (NASDAQ: WMT) has opened a fulfillment center of more than 900,000 square feet in Stockton, California, using automation and machine learning to cut the order process from 12 steps to five, with about 1,000 employees. As the fifth of its next-generation centers, it will help Walmart reach 95% of the U.S. population with next-day or two-day shipping when combined with its network. U.S. e-commerce sales have grown more than 20% for 10 straight quarters, fast deliveries rose 48% last quarter, and advertising grew 38%. The stock fell 9% after its August report on slow comparable sales and a soft Q3 outlook, with operating income expected to grow 2% to 4%. WMT trades at a forward non-GAAP P/E of 37.48x, about 24% above its 5-year average and above Amazon's roughly 31x, while analysts expect EPS to grow only 9% this fiscal year.

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