Walmart (NYSE:WMT) reports earnings before the bell on Thursday and among the top things investors should be looking at are the valuations on Walmart stock.

Although the report mostly will pertain to the overall company, Wall Street will likely focus on the growth of e-commerce, which currently makes up a fraction of the company’s total sales. However, its growth has reinvigorated the retail giant.

As a result, Walmart stock has moved higher in recent years. Because Walmart now trades at a higher valuation, the earnings report will likely not bring any news that would make Walmart stock a buy.

Earnings Focus on E-commerce

Wall Street expects second-quarter earnings per share (EPS) for Walmart to come in at $1.22. This would represent an almost 13% increase from the same quarter last year when the company reported an EPS of $1.08. Analysts also expect the company to report revenues of $126.04 billion.

If this number holds, revenues will grow 2.2% from year-ago levels. The company reported quarterly revenues of $123.36 billion in the second quarter of 2017.

The spotlight probably won’t dwell on if and how much the company beats estimates, which has occurred in 10 out of the last 11 quarters. Also, the expected same-store sales increase of 2.3% likely will not generate buzz.

The focus will instead rest on whether Walmart can achieve its goal of 40% revenue growth in e-commerce. U.S. e-commerce made up a little over 2% of overall revenue in fiscal 2018. Still, sales in this division rose 33% in the first quarter and 23% in the fourth quarter of 2017.

Two years ago, Amazon (NASDAQ:AMZN) clouded the future of Walmart with fear that a “takeover” by the e-commerce giant would sweep them aside. The same fear also affected peers such as Target (NYSE:TGT) and Costco (NASDAQ:COST). It reached a fever pitch when Amazon entered brick and mortar retail by purchasing Whole Foods.

However, Walmart began to fight back with an online presence of its own. The retail giant has taken an omnichannel strategy, and the stock has since staged a comeback. Walmart stock has risen almost 80% since its stock reached a low of $56.30 per share in late 2015 on declining sales.

Walmart Is Overvalued

But here’s the thing. This 80% increase has taken Walmart above fair value. As the situation stands now, analysts expect the company to earn $4.91 in fiscal 2019, 8.8% earnings growth from fiscal 2018.

With the stock trading at about $90 per share, this takes the forward price-to-earnings (PE) ratio to about 18.25. Both the PE and growth bring the price-to-earnings-to-growth (PEG) to 2.07. This stands well above the long-term average S&P 500 PEG ratio of 1.33.

Walmart could impress the market with solid e-commerce growth. That represents a vast improvement from two years ago when everyone thought Walmart was on the path to decline. E-commerce may also take some of the focus off Walmart International, which posted positive sales growth in fiscal 2018 but continues to struggle.

However, all of this bodes less well for Walmart stock. Profit growth will have to come in 55% higher than expected merely to bring the PEG ratio to fair value. The PE of 18.25 lags current S&P 500 averages of 24.4. However, 8.8% profit growth stands as slightly more than half of the current S&P 500 average of 15.1%.

Walmart has not become wildly overpriced like AMZN. Still, TGT stock holds a higher PEG ratio, it trades at a lower PE and pays a higher dividend yield. Given the overall growth and the choices, I see little reason to buy Walmart barring a massive expectations beat.

The Bottom Line on Walmart Stock

Second-quarter earnings will likely not give any reasons for investors to buy WMT stock. Nobody questions that Walmart has made great strides in answering Amazon’s competitive threat. E-commerce has brought Walmart the high-growth niche it has not seen in many years.

Unfortunately for new investors, the stock has risen 80% from multi-year lows. This has brought the PEG and PE ratios to higher levels than the company has seen in many years. The upcoming earnings report could bring much-needed good news as a company, but it probably won’t change Walmart’s value proposition.

As of this writing, Will Healy did not hold a position in any of the aforementioned stocks. You can follow Will on Twitter at @HealyWriting.