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Adam Hartung

About the Author Adam Hartung

Adam Hartung has more than 30 years of practical experience developing and implementing successful strategies to take advantage of emerging technologies and new business models. He is currently CEO of Spark Partners, Content Laboratory, Inc. and Soparfilm Energy Corporation. Additionally, Adam Chairs the Audit Committee on the Board of Directors for Six Dimensions Global (SIXD,) and has been on the Board at several privately held companies. Adam provides board advisory services via the National Association of Corporate Directors (NACD) where he is a Fellow and regular speaker on risk management across multiple industries. Adam is the No. 1 Leadership columnist for Forbes.com with over 3 million readers, and quarterly Leadership columnist for CIO Magazine. He has been featured in dozens of journals, including Adweek, Washington Times and BBC television. Adam received his MBA from the Harvard Business School with Distinction and continues to travel the globe leading risk management workshops as well as conference and management meeeting keynotes.

Walmart Inc’s (WMT) Surprising Tumble – Analysts Never Learn, Will You?


On February 20, 2018 Walmart Inc’s (NYSE:WMT) stock had its biggest price drop ever. And the second biggest percentage decline ever. Even though same store sales improved, investors sold off the stock in droves. And after a pretty healthy recent valuation run-up.

What happened? Simply put, Walmart said its on-line sales slowed and its cost of operations rose, slowing growth and cramping margins. In other words, even though it bought Jet.com Walmart is still a long, long way from coming close to matching the customer relationship and growth of Amazon.com. And (surprise, surprise) margins in on-line aren’t an easy thing — as Amazon’s thin margins for 15 years have demonstrated.

In other words, this was completely to be expected. Walmart is a behemoth with no adaptability. For decades the company has been focused on how to operate its warehouses and stores, and beat up its suppliers. Management had to be drug, kicking and screaming, into e-commerce. And failing regularly it finally made an acquisition. But to think that Jet.com was going to change WalMart’s business model into a growing, high profit operation any time soon was foolish. Management still wants people in the store, first and foremost, and really doesn’t understand how to do anything else.

All the way back in 2005, I wrote that Walmart was too big to learn, and was unwilling to create white space teams to really explore growing e-commerce (hence the belated Jet-com acquisition.) In 2007, I wrote that calling Walmart a “mature” competitor with huge advantages was the wrong way to view the company already under attack by all the e-commerce players. In July, 2015 Amazon’s market cap exceeded Walmart’s, showing the importance of retail transformation on investor expectations. By February, 2016 there were 10 telltale signs Walmart was in big trouble by a changing retail market. And by October, 2017 it was clear the Waltons were cashing out of Walmart, questioning why any investor should remain holding the stock.

It really is possible to watch trends and predict future markets. And that can lead to good predictions about the fates of companies. The signs were all there that Walmart shouldn’t be going up in value. Hope had too many investors thinking that Walmart was too big to stumble – or fail. But hope is not how you should invest. Not for your portfolio, and not for your business. Walmart should have dedicated huge sums to e-commerce 15 years ago, now it is playing catch up with Amazon.com, and that’s a race it simply won’t win. Are you making the right investment decisions for your business early enough? Or will you stumble like Walmart?

Analyst Ratings

Wall Street is split between the bulls and those who are more cautious on the retail empire, with TipRanks analytics exhibiting WMT as a Buy. Out of 16 analysts polled in the last 3 months, 8 are bullish on Walmart stock, while 8 remain sidelined. With a return potential of nearly 21%, the stock’s consensus target price stands at $107.79.