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Build-A-Bear (BBW) Gains But Lags Market: What You Should Know

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In the latest trading session, Build-A-Bear (BBW - Free Report) closed at $22.04, marking a +1.1% move from the previous day. This move lagged the S&P 500's daily gain of 1.85%. Meanwhile, the Dow gained 1.65%, and the Nasdaq, a tech-heavy index, added 13.7%.

Heading into today, shares of the toy retailer had lost 8.17% over the past month, lagging the Retail-Wholesale sector's loss of 1.1% and the S&P 500's loss of 0.87% in that time.

Wall Street will be looking for positivity from Build-A-Bear as it approaches its next earnings report date. The company is expected to report EPS of $1.01, up 13.48% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $124.24 million, up 5.59% from the prior-year quarter.

BBW's full-year Zacks Consensus Estimates are calling for earnings of $3.46 per share and revenue of $497.12 million. These results would represent year-over-year changes of +12.34% and +6.24%, respectively.

Any recent changes to analyst estimates for Build-A-Bear should also be noted by investors. These revisions help to show the ever-changing nature of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. 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. Build-A-Bear is currently sporting a Zacks Rank of #1 (Strong Buy).

Investors should also note Build-A-Bear's current valuation metrics, including its Forward P/E ratio of 6.3. For comparison, its industry has an average Forward P/E of 11.31, which means Build-A-Bear is trading at a discount to the group.

The Retail - Miscellaneous industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 124, which puts it in the top 50% 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.

You can find more information on all of these metrics, and much more, on Zacks.com.


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