NIKE, Inc. (NKE) vs Walmart Inc. (WMT): Which Is the Better Buy in 2026?
As of 2026-08-03, NKE is undervalued at $42, with a DCF intrinsic value of $164 and a margin of safety of 74%. WMT is overvalued at $111, with an intrinsic value of $72 and a margin of safety of -54%. Of the two, NKE has the wider margin of safety.
Rewards
- ★NIKE, Inc. has maintained ROIC above 10% for 4 consecutive years, suggesting solid business economics.
- ★NIKE, Inc. scores 71/100 on the Economic Moat Score (Wide Moat), with roic consistency as the strongest competitive dimension.
- ★Return on equity has consistently exceeded 20% over 4 years, indicating efficient use of shareholder capital.
- ★Walmart Inc. scores 88/100 on the Economic Moat Score (Wide Moat), with revenue predictability as the strongest competitive dimension.
- ★Each dollar of retained earnings has created $3.11 of earning power — management is an exceptional capital allocator.
- ★Altman Z-Score of 6.25 indicates very low bankruptcy risk — the company is firmly in the safe zone.
Risks
- ⚠Free cash flow has declined at a 23.5% CAGR over the past 4 years — a concerning trend.
- ⚠Gross margin of 25.0% is low, suggesting a competitive or commodity-like market with limited pricing power.
- ⚠FCF yield of 1.7% is below 3%, meaning the market is pricing in substantial future growth to justify the current price.
- ⚠PEG ratio of 4.24 indicates the stock is expensive relative to its expected growth — the market may be pricing in more growth than analysts project.
Key Valuation Metrics
Learn more →Historical Fundamentals
Learn more →Price ÷ Earnings Per Share — how many years of current earnings you're paying for at today's price. Lower P/E may indicate undervaluation. The dashed forward point is the forward P/E — today's price ÷ analyst consensus EPS.
Price ÷ Earnings Per Share — how many years of current earnings you're paying for at today's price. Lower P/E may indicate undervaluation. The dashed forward point is the forward P/E — today's price ÷ analyst consensus EPS.
Price ÷ Earnings Per Share — how many years of current earnings you're paying for at today's price. Lower P/E may indicate undervaluation. The dashed forward point is the forward P/E — today's price ÷ analyst consensus EPS.
$1 Retained Earnings Test
Learn more →> $1 created per $1 retained = Value Creator · < $1 created = Value Destroyer
> $1 created per $1 retained = Value Creator · < $1 created = Value Destroyer
Buffett's "$1 Test": For every $1 of earnings retained, has management created at least $1 of market value?
> $1 created per $1 retained = Value Creator · < $1 created = Value Destroyer
Discounted Cash Flow (DCF) Analysis
Learn more →Reverse DCF — Market-Implied Growth
Learn more →What growth rate is the market pricing in at $42?
The market implies +7.6% Owner Earnings growth, above historical trends.
Standard FCF implies a demanding +14.8%, reflecting heavy growth investment.
What growth rate is the market pricing in at $111?
The market implies +18.3% Owner Earnings growth, below historical trends — potential opportunity.
Standard FCF implies a more demanding +23.6%, reflecting heavy growth investment expected to generate future returns.
Economic Moat Score
Learn more →Wide moat with strength across all dimensions. ROIC Consistency is the standout factor.
Wide moat with strength across all dimensions. Revenue Predictability is the standout factor.
Forensic Accounting
Learn more →M-Score Trend
M-Score Trend
Beneish's 8-variable model estimates the probability of earnings manipulation. An M-Score above -1.78 signals elevated risk — companies in this range have historically been 3-5× more likely to be manipulating earnings. Scores between -2.22 and -1.78 fall in a grey zone warranting further investigation.
Ownership Breakdown
Learn more →High insider ownership aligns management incentives with shareholders. Institutional concentration can indicate smart-money conviction but also crowding risk.
Insider Buying Activity
Learn more →Open market purchases · includes direct & indirect ownership · excludes option exercises.
Insider Selling Activity
Learn more →Direct ownership only · excludes indirect, option exercises, planned (10b5-1) sales & derivatives.
🎭 Mr. Market's Mood
Learn more →"Market is pessimistic — investigate whether fears are temporary or structural"
"Market is pricing this stock without strong emotion in either direction"
Composite sentiment score based on market signals. Inspired by Buffett’s "Mr. Market" allegory — fear = potential opportunity, greed = potential risk. Must be used alongside fundamental analysis, not in isolation.
⚖️ Buffett Signal
Learn more →The Buffett Signal cross-references market sentiment with DCF valuation. Configure the DCF Analysis above to generate a signal.
The Buffett Signal cross-references market sentiment with DCF valuation. Configure the DCF Analysis above to generate a signal.
Frequently Asked Questions: NKE vs WMT
Is NIKE, Inc. or Walmart Inc. more undervalued in 2026?▼
Based on our discounted cash flow model, NKE trades at a 74.5% margin of safety (intrinsic value $164 vs. price $42), compared to WMT's -53.6% margin of safety (intrinsic $72 vs. $111).
Which stock has a wider economic moat, NIKE, Inc. or Walmart Inc.?▼
WMT scores 88/100 (Wide moat), while NKE scores 71/100 (Wide moat). The moat score measures competitive advantage durability across ROIC consistency, margin stability, revenue predictability, and reinvestment efficiency.
Which company has better free cash flow, NIKE, Inc. or Walmart Inc.?▼
NIKE, Inc. (NKE) generates a 3.1% free cash flow yield, compared to Walmart Inc.'s 1.7%. A higher FCF yield means the business converts more of its market value into cash that can be returned to shareholders or reinvested.
Which stock has higher return on invested capital, NIKE, Inc. or Walmart Inc.?▼
NKE earns 17.9% ROIC versus WMT's 13.7%. A higher ROIC means the company generates more profit per dollar of capital employed, a hallmark of durable competitive advantage in Buffett-style analysis.
Which dividend is safer, NIKE, Inc.'s or Walmart Inc.'s?▼
WMT's dividend earns a safety score of 94/100 (Very Safe), compared to NKE's 34/100 (Unsafe). WMT has raised its dividend for 3 consecutive years.