Wal-Mart (NYSE:WMT) stock has been dead money for the last 11 years. Its latest financial report reveals a company that can’t grow in the U.S. and is getting more of its revenues from overseas. Will this be enough to revive its stock?

Wal-Mart stock can be thought of as consisting of two eras: spectacular growth and stubborn standstill. The spectacular growth era for Wal-Mart stock spanned the period from January 1978 to January 2000 when it rose 8,682% from a split-adjusted 78 cents to $68.50, a compound annual growth rate of 22.6%. The stubborn standstill period since has led stockholders to suffer a 24% loss in value at a -2.3% annual rate.

Do recent earnings represent a turning point? Probably not. Wal-Mart’s second-quarter 2012 EPS were up 12.4% from the year before, and at $1.09 a share, those earnings beat expectations by a penny. Wal-Mart’s net sales rose 5.5% to $108.6 billion, beating expectations by $500 million.

Wal-Mart did well outside the U.S. Its biggest sales gains were from Wal-Mart International — up 16% to $30 billion thanks to sales gains in Mexico, U.K., Canada, Brazil and China; as well as Sam’s Club, where sales increased 4.9% to $12 billion. In the U.S., Wal-Mart’s same-store sales fell 1.3%.

Meanwhile, Wal-Mart raised its guidance for 2012. Specifically, Wal-Mart increased its EPS guidance to a range between of $4.41 and $4.51 — and the midpoint of that range would represent a 7% increase over the previous year’s EPS of $4.18.

Is this enough to justify investing in Wal-Mart? Here are three reasons to consider it:

• Good quarterly earnings. Wal-Mart has been able to meet or surpass analysts’ expectations in all of its past five earnings reports.
• Decent dividend. Wal-Mart pays an attractive 2.81% dividend yield.
• Wal-Mart is out-earning its cost of capital. Wal-Mart is earning more than its cost of capital — but it’s not progressing. How so? It produced no EVA momentum, which measures the change in “economic value added” (essentially, after-tax operating profit after deducting capital costs) divided by sales. In the first six months of 2011, Wal-Mart’s EVA momentum was 0%, based on first six months’ annualized 2010 revenue of $407 billion, and EVA that declined from $5.7 billion in the first six months’ annualized 2010 to $4.8 billion in in the first six months’ annualized 2011, using a 9% weighted average cost of capital

Here are two reasons to hesitate:

• Expensive stock. Wal-Mart’s price/earnings-to-growth ratio of 1.26 (where a PEG of 1.0 is considered fairly priced) means it is expensive. It currently has a P/E of 11.8 and is expected to grow earnings 9.4% to $4.88 in fiscal 2013.
• Rising sales and profits — but shakier balance sheet. Wal-Mart has been increasing sales and profits. Its $422 billion in revenues has grown at an average rate of 6.5% over the past five years, and its net income of $15.4 billion has increased at a 6% annual rate — yielding a slim 4% net profit margin. Its debt has risen and its cash fell. Its debt has risen at 9.3% annual rate, from $30.7 billion (2007) to $43.8 billion (2011), while its cash declined at a 1.3% annual rate, from $7.8 billion to $7.4 billion during the period.

Wal-Mart needs a catalyst for its stock, and as it gets bigger, the law of large numbers makes that less and less likely to happen. For example, to accelerate its sales growth to 12%, Wal-Mart would need to add more than $50 billion in revenues — the world might simply be too small to provide it that much growth in a single year.

I see no reason to rush into this stock.

Peter Cohan has no financial interest in the securities mentioned.