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Best Buy (BBY) Stock Sinks As Market Gains: What You Should Know

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Zacks Equity Research
·3 min read
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In the latest trading session, Best Buy (BBY) closed at $107.69, marking a -1.04% move from the previous day. This change lagged the S&P 500's daily gain of 1.61%. Elsewhere, the Dow gained 0.77%, while the tech-heavy Nasdaq added 2.55%.

Prior to today's trading, shares of the consumer electronics retailer had gained 9.05% over the past month. This has outpaced the Retail-Wholesale sector's loss of 1.96% and the S&P 500's loss of 0.35% in that time.

Investors will be hoping for strength from BBY as it approaches its next earnings release. On that day, BBY is projected to report earnings of $3.46 per share, which would represent year-over-year growth of 19.31%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $17.20 billion, up 13.17% from the year-ago period.

BBY's full-year Zacks Consensus Estimates are calling for earnings of $7.90 per share and revenue of $47.59 billion. These results would represent year-over-year changes of +30.15% and +9.05%, respectively.

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

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. 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.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Within the past 30 days, our consensus EPS projection has moved 0.06% higher. 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 13.78 right now. This valuation marks a no noticeable deviation compared to its industry's average Forward P/E of 13.78.

Meanwhile, BBY's PEG ratio is currently 1.35. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. Retail - Consumer Electronics stocks are, on average, holding a PEG ratio of 1.35 based on yesterday's closing prices.

The Retail - Consumer Electronics industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 220, which puts it in the bottom 14% 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.

You can find more information on all of these metrics, and much more, on Zacks.com.


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Zacks Investment Research