So, Walmart Inc. (WMT) had a good quarter. The numbers beat expectations. And yet, the stock went down on Friday. Welcome to the stock market, where sometimes doing well isn't enough if everyone already thought you'd do well and is now worried about how much they're paying for that performance.

The retail giant reported fourth-quarter adjusted earnings of 74 cents per share, just edging out the Street's view of 73 cents. Sales came in at $190.70 billion, up 5.6% year-over-year and also beating the consensus estimate. By most accounts, it was a solid report. But shares still slid, with investors apparently weighing whether the stock's current price—trading at a multiple that makes some folks nervous—already reflects all this good news.

The interesting thing is that the analysts watching the company closely aren't backing down. They're largely staying bullish, and their reasoning goes beyond just this quarter's numbers. They're looking at Walmart's bigger transformation: it's not just a store anymore. It's building an entire ecosystem.

The Analyst Bull Case

Let's break down what the pros are saying. The consensus view is that Walmart's future growth is being powered by its newer, higher-margin ventures.

Telsey Advisory Group analyst Joseph Feldman reiterated an Outperform rating and raised his price target from $135 to $140. His take is straightforward: Walmart is going to keep leading in retail. He points to the company's push beyond its core stores and e-commerce into areas like advertising, merchant services, and last-mile delivery. "Those newer businesses carry higher margins and could lift operating income faster than revenue," Feldman noted. He's basing his $140 target on a multiple of about 48 times his 2026 earnings per share estimate of $2.91.

Over at BTIG, analyst Robert Drbul is on the same page, reiterating a Buy rating with a $140 price target. He believes Walmart has the right business drivers to hit its fiscal 2027 sales growth target of 3% to 4%. More importantly, he expects operating income to grow even faster than sales over the next several years. How? Drbul points to Walmart's integrated approach—mixing physical stores with digital—and its "alternative revenue streams." Think advertising, the Walmart+ membership program, its online marketplace, and Walmart Fulfillment Services. "Membership and advertising already drive results," Drbul said, "and he expects fulfillment services to gain traction and matter more."

Then there's DA Davidson analyst Michael Baker, who is the most bullish of the bunch. He maintained a Buy rating but jacked his price target up from $135 to $150. Baker sees Walmart at an inflection point where years of investment are finally paying off. "Walmart is turning earlier investments in automation, AI and alternative businesses into fresh margin gains," he said. The company then reinvests that "margin currency" back into lower prices and better convenience for customers, which in turn helps it win market share.

Baker provided a striking detail: within those alternative business units—membership, media (advertising), and marketplace—they now contribute at least one-third of Walmart's profits. This shift helps explain why the company has consistently beaten its own long-term financial model, which targets 4% sales growth and 4% to 8% operating profit growth. "Above-plan performance showed up in each of the past three years," Baker writes. "He expects another year of outperformance in 2026."

The Valuation Elephant in the Room

Okay, so the analysts love the story. But what about that stock drop? Baker actually addresses the core concern head-on. "The biggest objection he hears centers on a 42-times valuation," he writes. "He called that concern fair." Let's sit with that for a second. An analyst with a $150 price target is admitting that yes, the stock looks expensive on a traditional multiple.

But then he makes the counter-argument. First, he notes that even at that multiple, Walmart still trades below where Costco (COST) trades. Second, and more fundamentally, he argues that Walmart is separating itself from the pack. "He said he will pay a premium as Walmart separates from other retailers with a stronger model." In other words, you're not just paying for a retailer; you're paying for a diversified, tech-enabled consumer ecosystem that prints money from higher-margin streams. That, the bulls argue, deserves a different—and higher—valuation.

So, where does that leave us? Walmart's stock closed down 2.70% at $121.50 on Friday. The market is having a momentary debate about price. The analysts, looking at the roadmap of higher margins from advertising, memberships, and AI-driven efficiency, are largely arguing that the story is worth the price of admission. They're betting that Walmart's evolution from a low-margin superstore into a multifaceted platform is the real deal. The next few quarters will be about whether the company can continue to deliver on that promise fast enough to keep both the analysts and the broader market convinced.