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Best Buy (BBY) Gains But Lags Market: What You Should Know

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Best Buy (BBY - Free Report) closed the most recent trading day at $52.75, moving +0.48% from the previous trading session. This change lagged the S&P 500's 3.43% gain on the day. Meanwhile, the Dow gained 3.29%, and the Nasdaq, a tech-heavy index, added 4.26%.

Coming into today, shares of the consumer electronics retailer had lost 15.7% in the past month. In that same time, the Retail-Wholesale sector lost 12.39%, while the S&P 500 lost 12.15%.

BBY will be looking to display strength as it nears its next earnings release, which is expected to be March 7, 2019. On that day, BBY is projected to report earnings of $2.57 per share, which would represent year-over-year growth of 6.2%. Our most recent consensus estimate is calling for quarterly revenue of $14.74 billion, down 4.07% from the year-ago period.

BBY's full-year Zacks Consensus Estimates are calling for earnings of $5.18 per share and revenue of $42.83 billion. These results would represent year-over-year changes of +17.19% and +1.6%, respectively.

It is also important to note the recent changes to analyst estimates for BBY. 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.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. 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, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 0.05% lower within the past month. BBY is currently sporting a Zacks Rank of #3 (Hold).

Looking at its valuation, BBY is holding a Forward P/E ratio of 10.13. This represents a no noticeable deviation compared to its industry's average Forward P/E of 10.13.

It is also worth noting that BBY currently has a PEG ratio of 0.92. 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 was holding an average PEG ratio of 0.64 at yesterday's closing price.

The Retail - Consumer Electronics industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 110, which puts it in the top 43% 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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