Best Buy Co., Inc.'s (NYSE:BBY) Earnings Grew 46%, Did It Beat Long-Term Trend?
Measuring Best Buy Co., Inc.'s (NYSE:BBY) track record of past performance is a useful exercise for investors. It enables us to understand whether or not the company has met or exceed expectations, which is an insightful signal for future performance. Today I will assess BBY's recent performance announced on 02 February 2019 and weigh these figures against its long-term trend and industry movements.
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Check out our latest analysis for Best Buy
How Well Did BBY Perform?
BBY's trailing twelve-month earnings (from 02 February 2019) of US$1.5b has jumped 46% compared to the previous year.
Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 6.2%, indicating the rate at which BBY is growing has accelerated. What's the driver of this growth? Well, let’s take a look at if it is solely attributable to an industry uplift, or if Best Buy has seen some company-specific growth.
In terms of returns from investment, Best Buy has invested its equity funds well leading to a 44% return on equity (ROE), above the sensible minimum of 20%. Furthermore, its return on assets (ROA) of 12% exceeds the US Specialty Retail industry of 6.4%, 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 24% to 37%.
What does this mean?
While past data is useful, it doesn’t tell the whole story. While Best Buy has a good historical track record with positive growth and profitability, there's no certainty that this will extrapolate into the future. I recommend you continue to research Best Buy to get a better picture 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 February 2019. This may not be consistent with full year annual report figures.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
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. Thank you for reading.
