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Bed Bath & Beyond (BBBY) Outpaces Stock Market Gains: What You Should Know

Zacks Equity Research

In the latest trading session, Bed Bath & Beyond (BBBY) closed at $14.66, marking a +1.24% move from the previous day. This move outpaced the S&P 500's daily gain of 0.42%. Elsewhere, the Dow gained 0.15%, while the tech-heavy Nasdaq added 0.66%.

Heading into today, shares of the home goods retailer had lost 2.16% over the past month, lagging the Retail-Wholesale sector's gain of 2.24% and the S&P 500's gain of 4.09% in that time.

Investors will be hoping for strength from BBBY as it approaches its next earnings release. The company is expected to report EPS of $0.03, down 83.33% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $2.88 billion, down 5.07% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $1.92 per share and revenue of $11.36 billion, which would represent changes of -6.34% and -5.57%, respectively, from the prior year.

Any recent changes to analyst estimates for BBBY should also be noted by investors. These recent revisions tend to reflect the evolving nature of short-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. BBBY currently has a Zacks Rank of #3 (Hold).

Investors should also note BBBY's current valuation metrics, including its Forward P/E ratio of 7.55. For comparison, its industry has an average Forward P/E of 11.76, which means BBBY is trading at a discount to the group.

It is also worth noting that BBBY currently has a PEG ratio of 1.17. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. Retail - Miscellaneous stocks are, on average, holding a PEG ratio of 1.42 based on yesterday's closing prices.

The Retail - Miscellaneous industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 92, putting it in the top 37% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.

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