Has Best Buy Co., Inc. (NYSE:BBY) Improved Earnings Growth In Recent Times?
For investors, increase in profitability and industry-beating performance can be essential considerations in an investment. Below, I will examine Best Buy Co., Inc.'s (NYSE:BBY) track record on a high level, to give you some insight into how the company has been performing against its long term trend and its industry peers.
Check out our latest analysis for Best Buy
Did BBY beat its long-term earnings growth trend and its industry?
BBY's trailing twelve-month earnings (from 02 November 2019) of US$1.5b has jumped 40% compared to the previous year.
Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 9.4%, indicating the rate at which BBY is growing has accelerated. What's enabled this growth? Let's take a look at if it is merely a result of industry tailwinds, or if Best Buy has experienced some company-specific growth.
In terms of returns from investment, Best Buy has invested its equity funds well leading to a 49% return on equity (ROE), above the sensible minimum of 20%. Furthermore, its return on assets (ROA) of 9.2% exceeds the US Specialty Retail industry of 6.1%, indicating Best Buy has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for Best Buy’s debt level, has increased over the past 3 years from 29% to 29%.
What does this mean?
Best Buy's track record can be a valuable insight into its earnings performance, but it certainly doesn't tell the whole story. Positive growth and profitability are what investors like to see in a company’s track record, but how do we properly assess sustainability? I recommend you continue to research Best Buy to get a more holistic view of the stock by looking at:
Future Outlook: What are well-informed industry analysts predicting for BBY’s future growth? Take a look at our free research report of analyst consensus for BBY’s outlook.
Financial Health: Are BBY’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our financial health checks here.
Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
NB: Figures in this article are calculated using data from the trailing twelve months from 02 November 2019. This may not be consistent with full year annual report figures.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.
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