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Best Buy (BBY) Stock Drops Despite Market Gains: Important Facts to Note

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The latest trading session saw Best Buy (BBY - Free Report) ending at $75.17, denoting a -1.47% adjustment from its last day's close. The stock trailed the S&P 500, which registered a daily gain of 0.03%. Elsewhere, the Dow gained 0.41%, while the tech-heavy Nasdaq added 0.12%.

Shares of the consumer electronics retailer have depreciated by 1.09% over the course of the past month, outperforming the Retail-Wholesale sector's loss of 1.25% and lagging the S&P 500's loss of 0.9%.

The investment community will be paying close attention to the earnings performance of Best Buy in its upcoming release. The company is expected to report EPS of $1.08, down 6.09% from the prior-year quarter. At the same time, our most recent consensus estimate is projecting a revenue of $8.97 billion, reflecting a 5.23% fall from the equivalent quarter last year.

For the full year, the Zacks Consensus Estimates are projecting earnings of $6.03 per share and revenue of $42 billion, which would represent changes of -5.34% and -3.34%, respectively, from the prior year.

Investors should also take note of any recent adjustments to analyst estimates for Best Buy. These revisions help to show the ever-changing nature of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. To exploit this, we've formed the Zacks Rank, a quantitative model that includes these estimate changes and presents a viable 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. Over the past month, there's been no change in the Zacks Consensus EPS estimate. At present, Best Buy boasts a Zacks Rank of #3 (Hold).

Looking at valuation, Best Buy is presently trading at a Forward P/E ratio of 12.66. This indicates a discount in contrast to its industry's Forward P/E of 509.33.

It's also important to note that BBY currently trades at a PEG ratio of 1.99. 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. The Retail - Consumer Electronics was holding an average PEG ratio of 1.99 at yesterday's closing price.

The Retail - Consumer Electronics industry is part of the Retail-Wholesale sector. Currently, this industry holds a Zacks Industry Rank of 240, positioning it in the bottom 5% of all 250+ industries.

The strength of our individual industry groups is measured by the Zacks Industry Rank, which is calculated based on the average Zacks Rank of the individual stocks within these groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to use to monitor all these stock-influencing metrics, and more, throughout the forthcoming trading sessions.

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