Best Buy (BBY) Stock Gains 33.1% in Past 3 Months: Here's Why
Best Buy Co., Inc. BBY has been resorting to extraordinary efforts to enrich customers’ experience. The company is banking upon solid digital efforts to proficiently cater to consumers amid such trying times. In fact, Best Buy’s quick shift to a contactless curbside service-only operating model in view of the coronavirus outbreak has worked wonders.
Remarkably, the company is constantly conducting tests and pilots to turn into a more customer-centric, digitally focused and efficient company. Its membership drive under the name ‘Best Buy total tech’ is quite a wise move. This program offers unlimited Geek Squad technical support at exclusive member pricing with free shipping and standard installation.
Buoyed by such efforts, this consumer electronic retailer’s shares have surged 33.1% in the past three months, comfortably outperforming the industry’s 13.3% growth.
Let’s Delve Deep
Best Buy is focused on improving its digital capabilities including boosting its omnichannel services, such as buy online, pickup in-store services. The company is also deepening its customer engagement with more in-home consultations and in-home installations.
Moreover, Best Buy provides convenient pickup options like in-store pickup, curbside pickup, lockers and alternate pickup locations. The company’s consultation service, which supports customers with personalized tech needs, has been gaining traction.
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In addition, management has been making significant investments in fundamental technology capabilities, such as data and analytics as well as cloud migration to drive scale, efficiency and effectiveness. Management remains focused on optimizing its stores. Thus, Best Buy continues making investments in the stores and elevating unique experiences.
Best Buy is smoothly progressing on its virtual store format, where customers interact with experts via chat, audio, video and screen sharing. Moreover, the company has made investments in the distribution center network to improve productivity. Best Buy has invested in store-based fulfillment, which includes ship-from-store customer fulfillment centers.
The company is also making significant headway in the health and beauty category. To this end, management had launched a skincare technology product across its stores and online. In the health business category, the company has launched over-the-counter hearing aids in about 300 stores and online, with a new online hearing assessment tool.
Best Buy acquired Current Health which develops a market-leading remote patient monitoring platform allowing physicians to monitor and connect with patients in their homes. The company’s other notable buyouts in the health space include GreatCall in 2018 and Critical Signal Technologies in 2019.
Best Buy has also expanded its assortment in categories like outdoor living to provide customers with complete solutions. In this respect, its acquisition of Yardbird, a leading direct-to-consumer company that specializes in premium outdoor furniture, is worth noting. Such well-chalked plans are likely to keep contributing to the company’s online revenues.
Conclusion
Wrapping up, Best Buy seems well poised to tap growth opportunities given its solid tech-agnostic drives. While the aforesaid efforts are likely to continue driving sales, the company’s earnings status looks favorable too. It has delivered an average earnings surprise of 13.8% in the trailing four quarters.
In addition, the Zacks Consensus Estimate for fiscal 2024 earnings per share is currently pegged at $6.92, suggesting growth of 5.7% year over year. An impressive long-term earnings expected growth rate of 17.7% and a Value Score of A for this Zacks Rank #3 (Hold) stock further exhibits strength.
Solid Picks in Retail
We highlighted three top-ranked stocks, namely Tecnoglass TGLS, Chico's FAS CHS and Wingstop WING.
Tecnoglass manufactures and sells architectural glass,windows, and aluminum products for residential and commercial construction industries. TGLS currently sports a Zacks Rank of 1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Tecnoglass’ current financial-year sales and earnings per share suggests growth of 43.4% and 82.2%, respectively, from the year-ago reported figures. TGLS has a trailing four-quarter earnings surprise of 26.9%, on average.
Chico's FAS, an omnichannel specialty retailer, currently sports a Zacks Rank of 1. CHS has a trailing four-quarter earnings surprise of 87.5%, on average.
The Zacks Consensus Estimate for Chico's FAS’s current financial-year sales and EPS suggests 19.6% and 127.5% growth, respectively, from the year-ago reported figures.
Wingstop, which franchises and operates restaurants, currently holds a Zacks Rank #2 (Buy). The company has a trailing four-quarter earnings surprise of 5.8%, on average.
The Zacks Consensus Estimate for Wingstop’s current financial-year sales and earnings per share suggests 25.5% and 23% growth, respectively, from the year-ago reported numbers. WING has an expected EPS growth rate of 5.8% for three-five years.
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Best Buy Co., Inc. (BBY) : Free Stock Analysis Report
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