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Best Buy (BBY) Stock Sinks As Market Gains: What You Should Know
In the latest trading session, Best Buy (BBY - Free Report) closed at $83.95, marking a -0.06% move from the previous day. This change lagged the S&P 500's 1.1% gain on the day. At the same time, the Dow added 0.61%, and the tech-heavy Nasdaq gained 6.59%.
Heading into today, shares of the consumer electronics retailer had gained 4.78% over the past month, lagging the Retail-Wholesale sector's gain of 8.83% and outpacing the S&P 500's gain of 4.58% in that time.
Best Buy will be looking to display strength as it nears its next earnings release. The company is expected to report EPS of $2.11, down 22.71% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $14.75 billion, down 9.88% from the year-ago period.
BBY's full-year Zacks Consensus Estimates are calling for earnings of $6.59 per share and revenue of $46.3 billion. These results would represent year-over-year changes of -34.17% and -10.55%, respectively.
It is also important to note the 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.
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 0.62% higher within the past month. Best Buy currently has a Zacks Rank of #3 (Hold).
In terms of valuation, Best Buy is currently trading at a Forward P/E ratio of 12.75. For comparison, its industry has an average Forward P/E of 12.75, which means Best Buy is trading at a no noticeable deviation to the group.
Investors should also note that BBY has a PEG ratio of 0.72 right now. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. Retail - Consumer Electronics stocks are, on average, holding a PEG ratio of 0.72 based on yesterday's closing prices.
The Retail - Consumer Electronics industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 183, putting it in the bottom 28% 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.
Make sure to utilize Zacks.com to follow all of these stock-moving metrics, and more, in the coming trading sessions.