Stocks

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

In the latest trading session, Best Buy (BBY) closed at $114.52, marking a +0.73% move from the previous day. The stock lagged the S&P 500's daily gain of 1.06%.

Heading into today, shares of the consumer electronics retailer had lost 4.44% over the past month, lagging the Retail-Wholesale sector's loss of 3.94% and the S&P 500's loss of 1.05% in that time.

Investors will be hoping for strength from BBY as it approaches its next earnings release, which is expected to be May 27, 2021. On that day, BBY is projected to report earnings of $1.30 per share, which would represent year-over-year growth of 94.03%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $10.21 billion, up 19.2% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $7.30 per share and revenue of $46.54 billion, which would represent changes of -7.71% and -1.53%, respectively, from the prior year.

Investors should also note any recent changes to analyst estimates for BBY. These revisions typically reflect the latest short-term business trends, which can change frequently. 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. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, 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 has moved 0.44% higher. BBY is currently sporting a Zacks Rank of #3 (Hold).

Looking at its valuation, BBY is holding a Forward P/E ratio of 15.58. Its industry sports an average Forward P/E of 14.14, so we one might conclude that BBY is trading at a premium comparatively.

Investors should also note that BBY has a PEG ratio of 2.12 right now. 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 industry currently had an average PEG ratio of 2.12 as of yesterday's close.

The Retail - Consumer Electronics industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 93, putting it in the top 37% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


Click to get this free report

Best Buy Co., Inc. (BBY): Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Other Topics

Investing

Latest Markets Videos

    Zacks

    Zacks is the leading investment research firm focusing on stock research, analysis and recommendations. In 1978, our founder discovered the power of earnings estimate revisions to enable profitable investment decisions. Today, that discovery is still the heart of the Zacks Rank. A wealth of resources for individual investors is available at www.zacks.com.

    Learn More