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Best Buy Co. (BBY)
:BBY
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Best Buy Co
(NYSE:BBY)67Neutral
Positive Factors
Sales Performance
Computing and tablet sales are expected to remain positive due to demand for upgrades and the end of life support of Windows 10.
Negative Factors
Market Share Losses
Market share losses have been driven by competitors like Walmart, Costco, Home Depot, and Lowe’s gaining share in key categories.
Tariff Impact
Tariffs are a material wildcard impacting Best Buy, with the potential to reduce earnings significantly.
Best Buy Co (BBY) vs. S&P 500 (SPY)
Market Cap
$18.54B
Dividend Yield4.33%
Average Volume (3M)3.00M
Price to Earnings (P/E)14.8
Beta (1Y)0.68
Revenue Growth-3.02%
EPS Growth1.21%
CountryUS
Employees85,000
SectorConsumer Cyclical
Sector Strength53
IndustryRetail - Discretionary
Share Statistics
EPS (TTM)5.85
Shares Outstanding213,795,610
10 Day Avg. Volume4,154,388
30 Day Avg. Volume3,004,109
Financial Highlights & Ratios
PEG Ratio12.27
Price to Book (P/B)N/A
Price to Sales (P/S)0.44
Price to Cash Flow (P/CF)-18.10
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$96.85Price Target Upside28.79% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering13
Best Buy Co Business Overview & Revenue Model
Company DescriptionBest Buy Co., Inc. is a leading North American retailer specializing in consumer electronics, appliances, and related services. The company operates a vast network of retail stores and an online platform, offering a wide range of products including televisions, computers, mobile phones, gaming consoles, and home appliances. Best Buy also provides services such as installation, repair, and technical support through its Geek Squad division. With a focus on delivering a comprehensive shopping experience, Best Buy caters to both individual consumers and commercial clients.
How the Company Makes MoneyBest Buy makes money primarily through the sale of consumer electronics and appliances, both in-store and online. The company generates revenue from its diverse product offerings, which include computing and mobile phones, home theater equipment, entertainment products, and appliances. Additionally, Best Buy earns income from its services segment, which includes warranties, installation, and repair services provided by its Geek Squad division. The company's business model is supported by strategic partnerships with leading technology brands, enabling it to offer exclusive products and promotions. Best Buy's revenue is also influenced by seasonal sales events, such as Black Friday and holiday shopping, which drive significant consumer traffic and sales volume.
Best Buy Co Financial Statement Overview
Summary
Best Buy demonstrates solid operational efficiency with strong EBIT and EBITDA margins. However, declining revenue growth and high leverage present potential risks. Cash flows are robust, supporting debt service and potential reinvestment, yet the high debt-to-equity ratio suggests the need for cautious financial management to maintain long-term stability.Income Statement
Best Buy's TTM (Trailing-Twelve-Months) revenue is slightly lower than the previous year, indicating a decline in revenue growth. The gross profit margin is strong, reflecting effective cost management. However, the net profit margin has been under pressure, which could be a concern for long-term profitability. EBIT and EBITDA margins remain healthy, showcasing operational efficiency.72
Positive
Balance Sheet
The company's debt-to-equity ratio is relatively high, indicating a significant reliance on debt financing, which could pose financial risks. However, the return on equity (ROE) is commendable, suggesting that Best Buy efficiently utilizes shareholder funds. The equity ratio reflects a moderate level of financial stability, though there is room for improvement in strengthening the equity base.68
Positive
Cash Flow
Best Buy exhibits a strong operating cash flow to net income ratio, indicating efficient cash generation from operations. The free cash flow growth rate is positive, which is a good indicator of financial health and potential for reinvestment or debt reduction. However, the free cash flow to net income ratio suggests some constraints in converting income into freely available cash.75
Positive
| Breakdown | |||||
| TTM | Mar 2024 | Mar 2023 | Mar 2022 | Mar 2021 | Mar 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 42.23B | 43.45B | 46.30B | 51.76B | 47.26B | 43.64B | Gross Profit |
| 9.46B | 9.60B | 9.91B | 11.64B | 10.57B | 10.05B | EBIT |
| 1.79B | 1.57B | 1.79B | 3.04B | 2.39B | 2.01B | EBITDA |
| 2.70B | 2.60B | 2.86B | 3.88B | 3.51B | 2.87B | Net Income Common Stockholders |
| 1.27B | 1.24B | 1.42B | 2.45B | 1.80B | 1.54B |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 1.45B | 1.45B | 1.87B | 2.94B | 5.49B | 2.23B | Total Assets |
| 14.97B | 14.97B | 15.80B | 17.50B | 19.07B | 15.59B | Total Debt |
| 3.98B | 3.98B | 3.98B | 3.94B | 4.08B | 4.07B | Net Debt |
| 2.54B | 2.54B | 2.10B | 1.00B | -1.41B | 1.84B | Total Liabilities |
| 11.91B | 11.91B | 13.01B | 14.48B | 14.48B | 12.11B | Stockholders Equity |
| 3.05B | 3.05B | 2.79B | 3.02B | 4.59B | 3.48B |
| Cash Flow | Free Cash Flow | ||||
| 1.03B | 675.00M | 894.00M | 2.52B | 4.21B | 1.82B | Operating Cash Flow |
| 1.74B | 1.47B | 1.82B | 3.25B | 4.93B | 2.56B | Investing Cash Flow |
| -703.00M | -781.00M | -962.00M | -1.37B | -788.00M | -895.00M | Financing Cash Flow |
| -1.16B | -1.14B | -1.81B | -4.30B | -876.00M | -1.50B |
Best Buy Co Technical Analysis
Negative
75.20
Price Trends
86.18
Negative
88.28
Negative
87.34
Negative
Market Momentum
-0.33
Positive
27.23
Positive
24.83
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For BBY, the sentiment is Negative. The current price of 75.2 is below the 20-day moving average (MA) of 87.90, below the 50-day MA of 86.18, and below the 200-day MA of 87.34, indicating a bearish trend. The MACD of -0.33 indicates Positive momentum. The RSI at 27.23 is Positive, neither overbought nor oversold. The STOCH value of 24.83 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for BBY.
Best Buy Co Risk Analysis
Best Buy Co disclosed 29 risk factors in its most recent earnings report. Best Buy Co reported the most risks in the “Production” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Best Buy Co Peers Comparison
Overall Rating
UnderperformOutperform
Sector (60)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
82 Outperform | $2.16T | 36.91 | 20.72% | ― | 10.99% | 91.61% | |
78 Outperform | $460.27B | 60.89 | 30.98% | 0.44% | 5.35% | 16.22% | |
77 Outperform | $762.93B | 39.41 | 22.33% | 0.85% | 5.07% | 25.86% | |
70 Outperform | $53.67B | 12.41 | 30.16% | 3.69% | 0.64% | 20.16% | |
67 Neutral | $18.54B | 14.82 | 41.21% | 4.33% | -3.02% | 1.21% | |
60 Neutral | $13.01B | 10.45 | 0.79% | 3.53% | 1.60% | -22.47% |
* Consumer Cyclical Sector Average
Performance Comparison
BBY
Best Buy Co
75.20
2.39
3.28%
AMZN
Amazon
203.80
29.68
17.05%
COST
Costco
1,036.87
281.06
37.19%
TGT
Target
117.14
-46.40
-28.37%
WMT
Walmart
94.97
35.64
60.07%
Best Buy Co Earnings Call Summary
Earnings Call Date: Mar 4, 2025 | % Change Since: -13.30% | Next Earnings Date: May 21, 2025
Earnings Call Sentiment Neutral
The earnings call reflects a mixed sentiment with several positive outcomes such as better-than-expected sales and earnings, strong digital sales, and growth in computing and tablets. However, these are counterbalanced by challenges such as sales declines in specific categories, concerns about the impact of tariffs, and a significant impairment charge for Best Buy Health. The company is optimistic about future growth and strategic initiatives but faces uncertainties in the macroeconomic environment.Highlights
Better-than-Expected Sales and Earnings
Best Buy reported both better-than-expected sales and earnings for the fourth quarter with enterprise comparable sales growth of 0.5% and revenue of almost $14 billion.
Improved Operating Income Rate
The company delivered an adjusted operating income rate of 4.9%, with a 20 basis points annual adjusted operating income rate expansion on a 2.3% comparable sales decline.
Strong Digital Sales and App Engagement
Digital sales comprised almost 40% of total domestic sales, with the Best Buy app achieving the #1 ranked shopping app position on the Apple App Store on Black Friday, seeing almost 20% traffic growth.
Growth in Computing and Tablets
Best Buy reported better-than-expected domestic comparable sales growth of 9% in the combined computing and tablet categories, with laptop sales growth increasing to 10%.
Improved Customer and Employee Engagement
Enhanced vendor experiences and labor enhancements contributed to a material year-over-year improvement in Net Promoter Score and the lowest employee turnover metrics in 6 years.
Lowlights
Sales Declines in Certain Categories
Sales growth in computing and tablets was partially offset by declines in appliances, home theater, and gaming categories.
Tariff Concerns and Uncertainty
Recent tariffs enacted on Chinese imports pose a potential negative impact of around 1 point on comparable sales, with ongoing uncertainty about their duration and impact.
Goodwill Impairment Charge
Best Buy recorded a goodwill impairment related to Best Buy Health totaling $475 million, reflecting downward revisions in longer-term projections.
Company Guidance
During Best Buy's Fourth Quarter Fiscal 2025 Earnings Call, the company reported nearly $14 billion in revenue with an adjusted operating income rate of 4.9% and adjusted earnings per share of $2.58. Despite a 2.3% decline in comparable sales, they achieved a 20 basis point increase in annual adjusted operating income rate. Digital sales accounted for almost 40% of total domestic sales, with a 20% growth in app traffic. The company saw substantial growth in computing and tablets, with domestic comparable sales growth of 9% in these categories. Additionally, laptop sales increased by 10% compared to 7% in Q3. Best Buy's fiscal 2026 priorities include driving omnichannel experience improvements, launching and scaling profit streams like Best Buy Marketplace and Best Buy Ads, and enhancing operational effectiveness to fund strategic investments. The company anticipates enterprise revenue between $41.4 billion and $42.2 billion, with comparable sales growth of flat to 2%. They expect gross profit rates to range from flat to an increase of 20 basis points, with capital expenditures projected at $700 million to $750 million.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.