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Wal-Mart de Mexico (WMMVY)
OTHER OTC:WMMVY

Wal-Mart de Mexico (WMMVY) AI Stock Analysis

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Wal-Mart de Mexico

(OTC:WMMVY)

Rating:76Outperform
Price Target:―
Wal-Mart de Mexico's strong financial performance, highlighted by robust revenue growth and a solid balance sheet, is a significant strength. Positive technical indicators show an upward price trend, while the valuation appears fair with room for growth. The latest earnings call highlights growth in e-commerce and new initiatives, though profitability challenges persist. Overall, the stock is well-positioned for future growth with some risks to consider.

Wal-Mart de Mexico (WMMVY) vs. SPDR S&P 500 ETF (SPY)

Wal-Mart de Mexico Business Overview & Revenue Model

Company DescriptionWal-Mart de Mexico, often abbreviated as Walmex, is a leading retail company in Mexico and Central America. As a subsidiary of the global retail giant Walmart Inc., Walmex operates a chain of hypermarkets, discount department stores, and grocery stores. The company offers a wide range of products, including groceries, apparel, electronics, home goods, and general merchandise, through various store formats such as Bodega Aurrera, Walmart Supercenter, Sam's Club, and Superama.
How the Company Makes MoneyWal-Mart de Mexico generates revenue primarily through the sale of consumer goods in its physical retail locations and via e-commerce platforms. The company operates a diverse portfolio of store formats catering to different market segments, which helps maximize its reach and customer base. Revenue streams include sales from groceries, clothing, electronics, and other general merchandise. In addition, Walmex benefits from membership fees collected through its Sam's Club warehouse stores, which offer bulk purchasing options to consumers and businesses. Strategic partnerships with suppliers and an extensive supply chain network ensure competitive pricing and product availability, further enhancing its revenue potential. The company's focus on operational efficiency and cost management also contributes to its profitability.

Wal-Mart de Mexico Earnings Call Summary

Earnings Call Date:Apr 29, 2025
(Q1-2025)
|
% Change Since: 4.39%|
Next Earnings Date:Jul 16, 2025
Earnings Call Sentiment Neutral
The earnings call reflects a mixed performance with significant achievements in e-commerce growth, new business development, and price leadership. However, challenges remain with declining transaction volumes, category slowdowns, and increased expenses impacting profitability. The company remains optimistic about future improvements and growth opportunities.
Q1-2025 Updates
Positive Updates
E-commerce Growth
E-commerce business grew 17% during the quarter, with on-demand growth of 26% and marketplace growth of 8%, though the latter was impacted by a slowdown in key categories.
New Store Openings
Opened 20 new stores in Q1 2025, a 67% increase compared to the same quarter last year, contributing 1.6% to total sales growth.
Growth in Central America
Central America reported a 1.9% same-store sales growth and 54% e-commerce growth, with a 69% increase in Walmart Connect revenue in the region.
New Business Development
New business initiatives like Bait reached 19.8 million active users, generating MXN 2.3 billion in revenue, and Walmart Connect grew 25%.
Gross Margin Expansion
Gross margin expanded by 20 basis points to 24.1%, driven by contributions from new businesses and improved price perception.
Price Leadership
Efforts to reinforce price leadership resulted in positive outcomes, with notable campaigns like Morralla contributing to double-digit growth.
Negative Updates
Negative Same-Store Sales Growth in Transactions
Same-store sales saw a decline of 3.2% in transactions despite a 4.6% growth in ticket size.
Decline in Gaming and Electronics Categories
Key categories like video games, TVs, and video experienced an industry-wide slowdown, impacting marketplace growth.
SG&A Expense Increase
SG&A expenses increased by 12%, representing 16.5% of revenues, with a 70 basis points expansion in Mexico.
Inventory Growth
Inventory levels grew 15%, outpacing sales growth, emphasizing the need for better inventory management.
Operating Income and EBITDA Margin Contraction
Operating income decreased by 1.5%, and EBITDA margin contracted by 50 basis points to 10.4%.
Company Guidance
In the first quarter of 2025, Walmart de México y Centroamérica reported a same-store sales growth of 1.4%, with a 4.6% increase in ticket size but a 3.2% decline in transactions. The company opened 20 new stores, a 67% increase from the previous year, contributing 1.6% to total sales growth. E-commerce grew by 17%, driven by a 26% increase in on-demand services, while the marketplace experienced an 8% growth. Revenue in Central America rose by 3.5%, with e-commerce penetration increasing by 54%. The consolidated total revenue grew by 6.5%, aided by Mexican peso depreciation, while the gross margin expanded by 20 basis points to 24.1%. Despite these gains, SG&A expenses grew by 12%, impacting the EBITDA margin, which contracted by 50 basis points to 10.4%. Cash flow challenges were noted, with a 45% decrease in cash position year-over-year, primarily due to increased inventory and reduced accounts payable. The company remains optimistic about a gradual consumption ramp-up and maintains its annual sales growth guidance of 6% to 7%.

Wal-Mart de Mexico Financial Statement Overview

Summary
Wal-Mart de Mexico shows solid financial health with a robust revenue growth of 20.6%. The company maintains stable profit margins and efficient operations, reflected in healthy EBIT and EBITDA margins. A strong balance sheet with moderate leverage and a commendable ROE of 21.8% supports its position. Cash flow generation remains robust, though there are areas for improvement like slight net income decrease and volatile free cash flow.
Income Statement
85
Very Positive
Wal-Mart de Mexico shows robust revenue growth, with TTM revenues increasing by 20.6% since 2020, indicating strong market performance. Gross and net profit margins are stable at 24.2% and 5.4% respectively, showcasing consistent profitability. The EBIT and EBITDA margins are healthy at 7.8% and 9.6%, reflecting efficient operations. However, net income slightly decreased in the TTM compared to the previous year, which may warrant attention.
Balance Sheet
78
Positive
The company maintains a solid financial position with a debt-to-equity ratio of 0.33, suggesting moderate leverage. The equity ratio is healthy at 50.8%, indicating a strong asset base funded by equity. Return on equity (ROE) is a commendable 21.8%, reflecting effective use of shareholder funds to generate profit. While stockholders' equity has increased, the total liabilities remain substantial, which may pose potential risks if interest rates rise.
Cash Flow
80
Positive
Wal-Mart de Mexico has a strong operating cash flow to net income ratio of 1.14, indicating effective cash generation from operations. The free cash flow to net income ratio stands at 0.48, reflecting substantial reinvestment in the business. Free cash flow growth has been volatile, decreasing in the TTM, but the overall cash flow position remains solid. Continued investment in capital expenditures suggests a focus on growth and expansion.
Breakdown
TTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
973.29B958.51B886.52B819.17B736.04B701.73B
Gross Profit
235.06B231.47B210.56B191.40B171.84B162.04B
EBIT
76.18B77.36B73.81B68.01B62.91B57.45B
EBITDA
93.77B91.57B97.06B89.90B82.07B74.20B
Net Income Common Stockholders
52.96B53.83B51.59B48.97B44.14B33.43B
Balance SheetCash, Cash Equivalents and Short-Term Investments
23.94B36.51B40.67B47.43B42.82B35.67B
Total Assets
479.60B493.89B436.55B418.81B394.39B361.88B
Total Debt
79.67B79.73B75.25B73.35B64.69B59.74B
Net Debt
55.73B43.22B34.58B25.92B21.87B24.07B
Total Liabilities
236.13B261.02B237.46B216.34B208.51B192.76B
Stockholders Equity
243.47B232.88B199.09B202.47B185.88B169.12B
Cash FlowFree Cash Flow
25.28B37.87B56.33B43.17B44.42B44.64B
Operating Cash Flow
60.27B72.64B85.12B64.47B64.88B61.37B
Investing Cash Flow
-31.80B-30.53B-29.76B-20.32B-19.13B-16.53B
Financing Cash Flow
-51.92B-49.80B-58.55B-39.64B-37.50B-39.70B

Wal-Mart de Mexico Technical Analysis

Technical Analysis Sentiment
Positive
Last Price33.31
Price Trends
50DMA
31.61
Positive
100DMA
29.45
Positive
200DMA
28.87
Positive
Market Momentum
MACD
0.55
Positive
RSI
54.79
Neutral
STOCH
81.68
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For WMMVY, the sentiment is Positive. The current price of 33.31 is below the 20-day moving average (MA) of 33.59, above the 50-day MA of 31.61, and above the 200-day MA of 28.87, indicating a bullish trend. The MACD of 0.55 indicates Positive momentum. The RSI at 54.79 is Neutral, neither overbought nor oversold. The STOCH value of 81.68 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for WMMVY.

Wal-Mart de Mexico Peers Comparison

Overall Rating
UnderperformOutperform
Sector (65)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
78
Outperform
$442.05B56.5432.08%0.52%5.94%9.31%
WMWMT
78
Outperform
$776.65B41.7522.80%0.98%4.22%-0.17%
DGDG
77
Outperform
$24.48B21.2215.69%2.12%4.77%-23.73%
76
Outperform
$58.60B21.1822.41%2.75%-2.87%-9.91%
TGTGT
72
Outperform
$45.79B11.0829.08%4.57%-0.69%2.03%
KRKR
69
Neutral
$43.57B17.8126.59%1.98%-1.94%23.94%
65
Neutral
$8.88B15.014.67%6.15%3.61%-2.60%
* Consumer Defensive Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
WMMVY
Wal-Mart de Mexico
33.31
1.51
4.75%
COST
Costco
1,002.71
150.33
17.64%
DG
Dollar General
111.84
-11.54
-9.35%
KR
Kroger Company
65.06
15.74
31.91%
TGT
Target
99.29
-37.03
-27.16%
WMT
Walmart
94.83
28.49
42.95%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.