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Big Lots (BIG) Gains As Market Dips: What You Should Know

Zacks Equity Research
·3 min read

Big Lots (BIG) closed at $50.26 in the latest trading session, marking a +0.92% move from the prior day. This move outpaced the S&P 500's daily loss of 1.86%. Meanwhile, the Dow lost 2.3%, and the Nasdaq, a tech-heavy index, lost 1.64%.

Coming into today, shares of the discount retailer had gained 9.04% in the past month. In that same time, the Retail-Wholesale sector gained 8.32%, while the S&P 500 gained 7.63%.

Investors will be hoping for strength from BIG as it approaches its next earnings release. The company is expected to report EPS of $0.65, up 461.11% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $1.35 billion, up 15.65% from the year-ago period.

BIG's full-year Zacks Consensus Estimates are calling for earnings of $7.73 per share and revenue of $6.16 billion. These results would represent year-over-year changes of +110.63% and +15.75%, respectively.

Investors might also notice recent changes to analyst estimates for BIG. 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.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 13.41% higher within the past month. BIG is holding a Zacks Rank of #2 (Buy) right now.

Investors should also note BIG's current valuation metrics, including its Forward P/E ratio of 6.45. This represents a discount compared to its industry's average Forward P/E of 22.32.

Investors should also note that BIG has a PEG ratio of 1.43 right now. 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. Retail - Discount Stores stocks are, on average, holding a PEG ratio of 3.09 based on yesterday's closing prices.

The Retail - Discount Stores industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 123, putting it in the top 49% 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.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.

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