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Are Investors Undervaluing Best Buy (BBY) Right Now?
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While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.
Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.
One company value investors might notice is Best Buy (BBY - Free Report) . BBY is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock is trading with a P/E ratio of 12.57, which compares to its industry's average of 20.07. Over the past year, BBY's Forward P/E has been as high as 16.87 and as low as 10.83, with a median of 13.67.
Investors will also notice that BBY has a PEG ratio of 1.66. 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. BBY's industry has an average PEG of 2.18 right now. Over the last 12 months, BBY's PEG has been as high as 2.28 and as low as 1.26, with a median of 1.57.
Another notable valuation metric for BBY is its P/B ratio of 6.87. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. This stock's P/B looks attractive against its industry's average P/B of 10.23. Over the past year, BBY's P/B has been as high as 7.80 and as low as 5.55, with a median of 6.68.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. BBY has a P/S ratio of 0.58. This compares to its industry's average P/S of 1.4.
Finally, investors should note that BBY has a P/CF ratio of 9.03. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. BBY's current P/CF looks attractive when compared to its industry's average P/CF of 11.41. Over the past year, BBY's P/CF has been as high as 12.68 and as low as 7.81, with a median of 10.15.
These are only a few of the key metrics included in Best Buy's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, BBY looks like an impressive value stock at the moment.
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Are Investors Undervaluing Best Buy (BBY) Right Now?
While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.
Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.
One company value investors might notice is Best Buy (BBY - Free Report) . BBY is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock is trading with a P/E ratio of 12.57, which compares to its industry's average of 20.07. Over the past year, BBY's Forward P/E has been as high as 16.87 and as low as 10.83, with a median of 13.67.
Investors will also notice that BBY has a PEG ratio of 1.66. 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. BBY's industry has an average PEG of 2.18 right now. Over the last 12 months, BBY's PEG has been as high as 2.28 and as low as 1.26, with a median of 1.57.
Another notable valuation metric for BBY is its P/B ratio of 6.87. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. This stock's P/B looks attractive against its industry's average P/B of 10.23. Over the past year, BBY's P/B has been as high as 7.80 and as low as 5.55, with a median of 6.68.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. BBY has a P/S ratio of 0.58. This compares to its industry's average P/S of 1.4.
Finally, investors should note that BBY has a P/CF ratio of 9.03. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. BBY's current P/CF looks attractive when compared to its industry's average P/CF of 11.41. Over the past year, BBY's P/CF has been as high as 12.68 and as low as 7.81, with a median of 10.15.
These are only a few of the key metrics included in Best Buy's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, BBY looks like an impressive value stock at the moment.