Walmart Inc (NYSE:WMT) stock has been falling in recent weeks despite coming off a strong third-quarter earnings report in November. In Q3, the big-box retailer reported $134.7 billion in revenue for the period, beating analyst expectations of $132.2 billion. Its adjusted earnings per share of $1.34 also smashed the $1.18 that Wall Street was looking for.

A big reason for the company’s great performance was that e-commerce sales were up 79% as consumers continued to spend their money online rather than in-store during the coronavirus pandemic.

However, despite an initial rally after the earnings release, shares of Walmart have been falling in December and are now trading lower than they were before the company released its latest numbers.

One reason investors may be a bit hesitant to invest in Walmart right now is that with a 21% gain in 2020, the stock is now trading at a forward price-to-earnings multiple of 25. That’s a hefty premium for a company that was only growing at a rate of 1.9% in its most recent fiscal year. And with a price-to-earnings-growth (PEG) multiple of close to 4.0, this business isn’t growing at a fast enough pace to justify this type of price tag – investors normally look for a PEG of 1.0 or lower.

Although Walmart has benefitted from a surge in online shopping this year and shutdowns which have encouraged people to shop at big-box retailers and limit the number of trips they make, this is a trend that’s not likely to persist over the long term. Investors may be having second thoughts about Walmart’s stock today as it could very well decline in 2021, especially with the roll out of vaccines and as life starts to get back to normal.

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