Walmart Shares Dive To Lowest Valuation In 3 Decades

Walmart (NASDAQ: NYSE:WMT), the internationally-renown retailer famed for its low prices and massive number of employees, weathered a brutal plunge in valuation recently that saw the company’s share prices dip to their lowest point in 30 years. Having experienced its worst day on the market since 1988, investors are beginning to look at Walmart with caution, and rumors are beginning to swirl that the company’s woes are only just getting started. h3 The competition’s heating up/h3

It’s clear to anyone who’s been keeping an eye on Walmart over these past few years that the company is laser-focused on its rapidly-rising competitor, Amazon (NASDAQ:AMZN). The Bezos-led company’s seemingly-unstoppable rise across the market has many critics of Walmart asserting that the famed retailer is on its way out the door, and the recent plunge in its valuation will only spur more rumors that the company’s best days are behind it.

One of the biggest reasons for the company’s dismal plunge in valuation was likely its online sales figures, which fell far below expectations in what could be a signal for hard-times to come. Shoppers everywhere are turning to the internet for the vast majority of their daily purchasing needs, and Walmart has largely failed to keep up with its eager competitors when it comes to mastering the digital realm of e-Commerce; the company’s recent growth in online sales was less than half of the growth recorded in the previous quarter, and investors are concerned that it’s not doing enough to remain relevant in today’s digital marketplace.

If Walmart doesn’t turn its online operations around quickly, it can only expect even greater plunges in valuation; some 52 percent of online apparel shoppers are already flocking to Amazon for their shopping needs, and every day that Walmart waste is another opportunity for the company’s competitors to scoop up its valued customers. The Walton family’s corporate-child saw online revenues of more than $11 billion last year alone, but that impressive figure is rather misleading; the company actually lost money on those sales, and e-commerce losses aren’t likely to abate anytime soon.

The plunge in valuation, which wiped out nearly $30 billion in valuation for the company, sank Walmart’s shares down to a mere $94 per share, far short of the $105 per share valuation the company was enjoying at the start of February. Still, a behemoth like Walmart is hard to kill, and anyone expecting the massive retailer to go anywhere anytime soon is fooling themselves. Nonetheless, Walmart desperately needs a change of pace if it’s to remain competitive well into the 21st century.

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While critics of Walmart are enjoying their day in the sun following recent news, proponents of the company still see a silver lining; the company can cut cost massively in the forthcoming years by utilizing widespread automation processes in its stores, and is currently testing many cost-cutting measures that could help make up for its dismal e-commerce figures. Shelf-scanning robots, for instance, once a staple of sci-fi movies, are rapidly becoming a reality, and Walmart could save massive amounts of money by employing such robots instead of hordes of human employees. The trial run of the robots currently being tested in some 50 stores could serve as a good example for future innovation that helps pull Walmart out of its current downturn.

Not everything is going well for all of Walmart’s competitors, either; while digital e-commerce giants like Amazon are reveling in the changes currently taking the market by storm with car insurance comparison, other retailers like Target suffered valuation losses, too. Walmart can’t content itself with being the biggest “old-school” retailer, however; the company’s fate lies in its ability to convince customers to do more of their shopping online, and a failure to catch up to competitors like Amazon is sure to seriously wound Walmart in the future.

Net profits for all of Walmart’s US stores sunk by as much as 42 percent in recent quarters, meaning shareholders will likely be demanding action sooner rather than later. If and when the company finally masters e-commerce on a level like Amazon, however, its future prospects stand to skyrocket, and those counting Walmart out because it’s suffering from a large plunge shouldn’t expect the company to roll over and die without a fight.

Walmart’s commanding ability to create an economy of scale is one of the reasons it soared to the top of global markets, after all, and when the company optimizes its e-commerce supply chain, it’s likely to strike back against Jeff Bezos’ towering market behemoth with serious force. Keep your eye on Walmart; while the company will be suffering from some bad press following its valuation plunge, its race is not yet run, and an ability to reinvigorate its e-commerce operations could be the missing key to the company’s continued success.

Written By: Alex Newman