Cramer: It’s not too late to buy Walmart

• Even though Walmart shares have surged since the company reported second-quarter earnings, CNBC's Jim Cramer thinks it's not too late to buy the stock.
• The "Mad Money" host highlighted the company's growing e-commerce business.
• "I think this $96 stock can go to $115 or $120 in the not too distant future," Cramer said.

After Walmart shares surged almost 10 percent last Thursday thanks to the company's strong second-quarter earnings numbers, investors might be wondering if the stock has reached its peak. CNBC's Jim Cramer doesn't think so.

"Don't think it is too late to buy some," the "Mad Money" host said.

Cramer traces the stock's rise back to CEO Doug McMillon's turnaround plan for the company, which began three years ago. In McMillon's eyes, Walmart "needed to spend a lot more money to build out its web presence and better compensate its workers," Cramer said. Although the stock initially dropped on the news, McMillon insisted that the plan would pay off in the long run.

After a strong 2017, the stock took a hit this February when Walmart reported fourth-quarter earnings that missed expectations. "While McMillon pointed out that the growth would pick up again, by that point investors weren't in the mood for any nuance," said Cramer.

The slowly escalating trade war with China continued to worry investors since Walmart sources many of its products from the country. The company's acquisition of Indian e-commerce giant Flipkart in May was also viewed as a negative due to the $16 billion price tag.

But throughout the company's troubles, Cramer has believed in CEO McMillon's vision. "Last week, I got some sweet vindication" thanks to Walmart's robust earnings numbers, the "Mad Money" host said.

Along with strong same-store sales growth at both Walmart and subsidiary Sam's Club, online sales rose 40 percent year-over-year. McMillion effectively fulfilled his promise to jumpstart the company's e-commerce business and then some. Cramer even went as far as to say that "Walmart's probably the only retailer with the scale to truly challenge Amazon online."

With respect to the stock, Cramer pointed to the company's price to earnings multiple as an indicator that Walmart still has room to run. While Walmart trades at 19 times next year's earnings estimates, rival Costco trades at 29 times next year's numbers. The discrepancy can be explained by the fact that Costco hast "a faster long-term growth rate, nearly 12 percent, versus more like 6 percent for Walmart," Cramer said. "If Walmart's growth accelerates, it too will start to get a higher price to earnings multiple. That's exactly what's happening."

One of Mad Money's favorite technicians, Tim Collins of RealMoney.com, thinks that the stock will trade sideways through September and then potentially rise to new highs for the year.

Cramer's bottom line? "Given the strength of the fundamentals and what we see in the chart, I think this $96 stock can go to $115 or $120 in the not too distant future. Meaning, Walmart stock is still a buy."

Shares of Walmart closed at $96 on Monday. The stock is down 2.78 percent this year.

WATCH: Cramer explains why Walmart could reach $120

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Disclosure: Cramer's charitable trust owns shares of Amazon.