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Big Lots (BIG) Outpaces Stock Market Gains: What You Should Know

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Zacks Equity Research
·3 min read
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Big Lots (BIG) closed at $53.15 in the latest trading session, marking a +0.78% move from the prior day. This change outpaced the S&P 500's 0.47% gain on the day. Meanwhile, the Dow gained 0.4%, and the Nasdaq, a tech-heavy index, added 0.33%.

Heading into today, shares of the discount retailer had gained 14.6% over the past month, outpacing the Retail-Wholesale sector's gain of 7.48% and the S&P 500's gain of 3.42% in that time.

BIG will be looking to display strength as it nears its next earnings release. In that report, analysts expect BIG to post earnings of $0.65 per share. This would mark year-over-year growth of 461.11%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $1.35 billion, up 15.65% from the year-ago period.

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 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. 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. 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.

In terms of valuation, BIG is currently trading at a Forward P/E ratio of 6.83. This valuation marks a discount compared to its industry's average Forward P/E of 22.85.

Also, we should mention that BIG has a PEG ratio of 1.51. 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 3.16 at yesterday's closing price.

The Retail - Discount Stores industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 185, which puts it in the bottom 27% 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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