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Best Buy (BBY) Dips More Than Broader Markets: What You Should Know

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In the latest trading session, Best Buy (BBY - Free Report) closed at $76.80, marking a -1.79% move from the previous day. This change lagged the S&P 500's 0.93% loss on the day. At the same time, the Dow lost 0.43%, and the tech-heavy Nasdaq lost 0.17%.

Coming into today, shares of the consumer electronics retailer had gained 9.69% in the past month. In that same time, the Retail-Wholesale sector gained 9.23%, while the S&P 500 gained 6.31%.

Best Buy will be looking to display strength as it nears its next earnings release. In that report, analysts expect Best Buy to post earnings of $1.89 per share. This would mark a year-over-year decline of 36.58%. Our most recent consensus estimate is calling for quarterly revenue of $10.85 billion, down 8.46% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $8.69 per share and revenue of $49.1 billion, which would represent changes of -13.19% and -5.14%, respectively, from the prior year.

Investors might also notice recent changes to analyst estimates for Best Buy. These recent revisions tend to reflect the evolving nature of short-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

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.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. Best Buy is currently a Zacks Rank #3 (Hold).

Investors should also note Best Buy's current valuation metrics, including its Forward P/E ratio of 9. Its industry sports an average Forward P/E of 11.64, so we one might conclude that Best Buy is trading at a discount comparatively.

It is also worth noting that BBY currently has a PEG ratio of 1.06. 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. Retail - Consumer Electronics stocks are, on average, holding a PEG ratio of 0.84 based on yesterday's closing prices.

The Retail - Consumer Electronics industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 173, which puts it in the bottom 32% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our 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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