Wal-Mart Stores Inc (NYSE:WMT) is predicted to grow its earnings per share by a robust double-digit 26.78% over the next three years. With the recent EPS being $4.175, expected growth will push the upcoming EPS to $5.294. To determine whether this growth rate expectation is justified, we should take a look at how the company has been performing in the past. View our latest analysis for Wal-Mart Stores

Can we expect WMT to keep growing?

WMT is covered by 21 analysts who by consensus are expecting positive earnings, estimated to rise from current levels of $4.175 to $5.294 in a few years. This indicates a relatively solid earnings per share growth rate of 26.78% over the next few years, which is an optimistic outlook in the near term. In the same period we should see the revenue grow from $490,012M to $530,219M and net income is predicted to slightly grow from $12,729M to $16,138M in the next couple of years, growing by 26.78%. Though, at the current levels of revenue and profit, margins are certainly underwhelming.

Is this similar growth to the past?

The past can be an insightful indicator for future performance for a stock. We can determine whether this level of expected growth is sustainable and whether the company continues to go from strength to strength. However, WMT’s earnings growth in the past couple of years has been negative at -0.92%. Although its past performance illustrates a different picture to earnings growth moving forward, it could also mean WMT is growing off a lower base, meaning a higher growth rate is easier to achieve. This sign change in growth could indicate a turnaround initiative.

Next Steps:

For WMT, I’ve put together three important aspects you should further examine:

1. Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.

2. Valuation: What is WMT worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether WMT is currently mispriced by the market.

3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of WMT? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!

To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned.