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Best Buy (BBY) Stock Sinks As Market Gains: What You Should Know

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In the latest trading session, Best Buy (BBY - Free Report) closed at $72.36, marking a -1.31% move from the previous day. This change lagged the S&P 500's 0.02% gain on the day. At the same time, the Dow added 0.03%, and the tech-heavy Nasdaq lost 0.16%.

Prior to today's trading, shares of the consumer electronics retailer had lost 21.7% over the past month. This has lagged the Retail-Wholesale sector's loss of 21.24% and the S&P 500's loss of 12.5% in that time.

Best Buy will be looking to display strength as it nears its next earnings release, which is expected to be May 24, 2022. On that day, Best Buy is projected to report earnings of $1.60 per share, which would represent a year-over-year decline of 28.25%. Our most recent consensus estimate is calling for quarterly revenue of $10.43 billion, down 10.39% from the year-ago period.

BBY's full-year Zacks Consensus Estimates are calling for earnings of $8.94 per share and revenue of $49.96 billion. These results would represent year-over-year changes of -10.69% and -3.49%, respectively.

Investors might also notice recent changes to analyst estimates for Best Buy. Recent revisions tend to reflect the latest near-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. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

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. Over the past month, the Zacks Consensus EPS estimate has moved 0.29% lower. Best Buy currently has a Zacks Rank of #4 (Sell).

Valuation is also important, so investors should note that Best Buy has a Forward P/E ratio of 8.2 right now. For comparison, its industry has an average Forward P/E of 7.98, which means Best Buy is trading at a premium to the group.

It is also worth noting that BBY currently has a PEG ratio of 0.86. 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 - Consumer Electronics industry currently had an average PEG ratio of 0.6 as of yesterday's close.

The Retail - Consumer Electronics industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 234, which puts it in the bottom 8% 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.

To follow BBY in the coming trading sessions, be sure to utilize Zacks.com.


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