Getting products delivered from giant retailer Walmart (WMT) used to be kind of an afterthought. Who bothered with delivery, after all, when there were so many stores out there? But keeping out of a Walmart while still taking advantage of its prices proved a winning proposition for a lot of people, and as such, Walmart’s delivery chops have improved substantially. That news proved welcome for shoppers and investors alike, as investors sent Walmart shares up around 2% in Friday afternoon’s trading.
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Recent reports noted that Walmart’s delivery capabilities have been on the rise lately, to the point where it is now able to deliver product to 95% of the United States in a time window of just three hours. That actually makes it faster than Amazon (AMZN), though admittedly, the number of products that qualify for that kind of delivery is much lower than Amazon’s. Still, being able to say you are better than Amazon at anything is an achievement in and of itself.
Moreover, the ability to handle this many packages this rapidly allowed Walmart’s e-commerce operations to improve to the point where it can now post a quarterly profit. That was not a given; in fact, this is the first quarter yet that the e-commerce business has posted a profit. As it turns out, customers prefer the ability to get product delivered, and are willing to pay for the privilege, even. Between the Walmart+ paid subscription plan, and optional for-fee delivery, Walmart’s delivery operations are becoming a revenue stream in their own right.
So Good it Killed Kroger, Ship, That Is
In fact, Walmart’s delivery options are getting so good they are downright lethal…to the competition. Kroger (KR) actually shut down its Kroger Ship operations, which had been running since 2018. Kroger Ship proved so welcome at the time that Kroger opened it up to third-party sellers, offering a way to get just about anything delivered using Kroger as a middleman.
But now, Kroger Ship is dead, a casualty of Walmart’s powerful new delivery system. Kroger did not offer any statement on why Kroger Ship is dead, nor did it even offer any warning. But reports note that the site for Kroger Ship has actually been dead since March, and the service remains unavailable. Grocery delivery is actually still in play, as is order-ahead—these things are likely baked-in now considering the number of places that offer the service—but the third-party shipment option is done.
Is Walmart Stock a Good Buy Right Now?
Turning to Wall Street, analysts have a Strong Buy consensus rating on WMT stock based on 29 Buys and two Holds assigned in the past three months, as indicated by the graphic below. After a 49.03% rally in its share price over the past year, the average WMT price target of $108.80 per share implies 10.91% upside potential.
