Walmart(WMT) The Motley Fool·2025-01-27 01:45Core Viewpoint - Walmart's stock experienced a remarkable 72% increase in 2024, marking its best performance since 1998, significantly outperforming the S&P 500's 23% gain [1] Group 1: Financial Performance - The surge in Walmart's stock price is closely linked to a substantial increase in operating income, which has improved dramatically since the beginning of 2023 [2] - CEO Doug McMillon highlighted that e-commerce grew by 27%, advertising revenue increased by 28%, and membership income rose by 22% in the third quarter of 2024, contributing to profit growth outpacing sales [3][4] Group 2: E-commerce and Membership Growth - The Walmart+ membership program, launched in 2020, has seen significant growth, reportedly exceeding 60 million subscribers by September 2022, with continued double-digit growth since then [5] - The growth in e-commerce is further supported by Walmart+ subscribers, who are incentivized to use online services, thus boosting e-commerce sales [6] - Walmart's strategy of opening its e-commerce platform to third-party sellers and generating advertising revenue has been beneficial for the company [7][8] Group 3: Valuation and Future Outlook - Despite the impressive performance in 2024, Walmart's stock valuation, while higher than its historical average and the S&P 500, is justified by its current profit growth [9][10] - The expectation is that profit growth will continue to outpace revenue growth in 2025, driven by ongoing strong performance in e-commerce, advertising, and membership income [11][12] - The company is still in the early stages of its digital transformation, suggesting potential for sustained or accelerated growth in these areas [13]