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Best Buy (BBY) Gains But Lags Market: What You Should Know

Zacks Equity Research

In the latest trading session, Best Buy (BBY) closed at $74.75, marking a +0.52% move from the previous day. The stock lagged the S&P 500's daily gain of 0.9%. Elsewhere, the Dow gained 0.56%, while the tech-heavy Nasdaq added 1.13%.

Heading into today, shares of the consumer electronics retailer had gained 23.62% over the past month, outpacing the Retail-Wholesale sector's gain of 16.32% and the S&P 500's gain of 14.3% in that time.

Wall Street will be looking for positivity from BBY as it approaches its next earnings report date. In that report, analysts expect BBY to post earnings of $0.66 per share. This would mark a year-over-year decline of 35.29%. Our most recent consensus estimate is calling for quarterly revenue of $8.34 billion, down 8.75% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $5.26 per share and revenue of $41.23 billion, which would represent changes of -13.34% and -5.52%, respectively, from the prior year.

Investors might also notice recent changes to analyst estimates for BBY. These recent revisions tend to reflect the evolving nature of short-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, 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 has moved 16.74% lower within the past month. BBY is holding a Zacks Rank of #3 (Hold) right now.

Valuation is also important, so investors should note that BBY has a Forward P/E ratio of 14.13 right now. This represents a no noticeable deviation compared to its industry's average Forward P/E of 14.13.

We can also see that BBY currently has a PEG ratio of 1.85. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. BBY's industry had an average PEG ratio of 1.4 as of yesterday's close.

The Retail - Consumer Electronics industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 148, putting it in the bottom 42% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our 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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