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Big Lots (BIG) Dips More Than Broader Markets: What You Should Know

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Zacks Equity Research
·3 min read
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In the latest trading session, Big Lots (BIG) closed at $51.67, marking a -1.28% move from the previous day. This change lagged the S&P 500's daily loss of 0.46%. At the same time, the Dow lost 0.91%, and the tech-heavy Nasdaq lost 0.06%.

Prior to today's trading, shares of the discount retailer had gained 4.14% over the past month. This has outpaced the Retail-Wholesale sector's gain of 1.88% and lagged the S&P 500's gain of 7.53% in that time.

Wall Street will be looking for positivity from BIG as it approaches its next earnings report date. This is expected to be December 4, 2020. On that day, BIG is projected to report earnings of $0.65 per share, which would represent year-over-year growth of 461.11%. Meanwhile, our latest consensus estimate is calling for revenue of $1.35 billion, up 15.65% from the prior-year quarter.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $7.73 per share and revenue of $6.16 billion. These totals would mark changes of +110.63% and +15.75%, respectively, from last year.

It is also important to note the recent changes to analyst estimates for BIG. These recent revisions tend to reflect the evolving nature of short-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Our research shows that these estimate changes are directly correlated with near-term stock prices. 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. Within the past 30 days, our consensus EPS projection remained stagnant. BIG is holding a Zacks Rank of #3 (Hold) right now.

In terms of valuation, BIG is currently trading at a Forward P/E ratio of 6.78. This represents a discount compared to its industry's average Forward P/E of 21.47.

Meanwhile, BIG's PEG ratio is currently 1.5. 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. The Retail - Discount Stores was holding an average PEG ratio of 2.44 at yesterday's closing price.

The Retail - Discount Stores industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 112, putting it in the top 45% 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.

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

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Zacks Investment Research