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

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Big Lots (BIG - Free Report) closed the most recent trading day at $40.52, moving -0.17% from the previous trading session. This move lagged the S&P 500's daily gain of 1.24%. Meanwhile, the Dow gained 0.61%, and the Nasdaq, a tech-heavy index, added 1.35%.

Coming into today, shares of the discount retailer had lost 3.36% in the past month. In that same time, the Retail-Wholesale sector gained 10.38%, while the S&P 500 gained 7.09%.

Investors will be hoping for strength from BIG as it approaches its next earnings release. On that day, BIG is projected to report earnings of $2.66 per share, which would represent year-over-year growth of 401.89%. Our most recent consensus estimate is calling for quarterly revenue of $1.61 billion, up 28.75% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $6.20 per share and revenue of $5.85 billion. These totals would mark changes of +68.94% and +9.91%, respectively, from last year.

Investors should also note any recent changes to analyst estimates for BIG. Recent revisions tend to reflect the latest near-term business trends. 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, 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. Within the past 30 days, our consensus EPS projection has moved 7.92% higher. BIG is currently a Zacks Rank #3 (Hold).

Looking at its valuation, BIG is holding a Forward P/E ratio of 6.55. Its industry sports an average Forward P/E of 24.88, so we one might conclude that BIG is trading at a discount comparatively.

Also, we should mention that BIG has a PEG ratio of 0.93. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Retail - Discount Stores industry currently had an average PEG ratio of 4.11 as of yesterday's close.

The Retail - Discount Stores industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 177, putting it in the bottom 31% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

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