Big Lots (BIG) Dips More Than Broader Markets: What You Should Know

Big Lots (BIG) closed at $41.73 in the latest trading session, marking a -1.6% move from the prior day. This change lagged the S&P 500's 1.23% loss on the day. Meanwhile, the Dow lost 1.31%, and the Nasdaq, a tech-heavy index, lost 2.29%.

Heading into today, shares of the discount retailer had gained 27.55% over the past month, outpacing the Retail-Wholesale sector's gain of 9.75% and the S&P 500's gain of 5.2% in that time.

Investors will be hoping for strength from BIG as it approaches its next earnings release. In that report, analysts expect BIG to post earnings of $2.38 per share. This would mark year-over-year growth of 349.06%. Meanwhile, our latest consensus estimate is calling for revenue of $1.57 billion, up 25.61% from the prior-year quarter.

BIG's full-year Zacks Consensus Estimates are calling for earnings of $6.11 per share and revenue of $5.91 billion. These results would represent year-over-year changes of +66.49% and +10.94%, respectively.

Investors should also note any recent changes to analyst estimates for BIG. 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.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable 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. Within the past 30 days, our consensus EPS projection has moved 39.09% higher. BIG is holding a Zacks Rank of #1 (Strong Buy) right now.

In terms of valuation, BIG is currently trading at a Forward P/E ratio of 6.94. This valuation marks a discount compared to its industry's average Forward P/E of 24.85.

Investors should also note that BIG has a PEG ratio of 0.98 right now. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. BIG's industry had an average PEG ratio of 4.11 as of yesterday's close.

The Retail - Discount Stores industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 40, putting it in the top 16% 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.

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

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