Back to top

Image: Bigstock

Bed Bath & Beyond (BBBY) Gains But Lags Market: What You Should Know

Read MoreHide Full Article

Bed Bath & Beyond (BBBY) closed the most recent trading day at $9.97, moving +0.61% from the previous trading session. The stock lagged the S&P 500's daily gain of 4.22%. Elsewhere, the Dow gained 4.53%, while the tech-heavy Nasdaq added 3.85%.

Coming into today, shares of the home goods retailer had lost 35.4% in the past month. In that same time, the Retail-Wholesale sector lost 4.46%, while the S&P 500 lost 7.39%.

Investors will be hoping for strength from BBBY as it approaches its next earnings release. The company is expected to report EPS of $0.21, down 82.5% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $3.09 billion, down 6.62% from the year-ago period.

It is also important to note the recent changes to analyst estimates for BBBY. Recent revisions tend to reflect the latest near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. 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 84.38% lower within the past month. BBBY is currently sporting a Zacks Rank of #4 (Sell).

Looking at its valuation, BBBY is holding a Forward P/E ratio of 45.56. For comparison, its industry has an average Forward P/E of 9.37, which means BBBY is trading at a premium to the group.

Investors should also note that BBBY has a PEG ratio of 5.62 right now. 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 - Miscellaneous industry currently had an average PEG ratio of 1.34 as of yesterday's close.

The Retail - Miscellaneous industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 64, putting it in the top 26% 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.

Make sure to utilize Zacks. Com to follow all of these stock-moving metrics, and more, in the coming trading sessions.

Published in