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Best Buy Co (BBY)
NYSE:BBY
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Best Buy Co (BBY) AI Stock Analysis

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BBY

Best Buy Co

(NYSE:BBY)

Rating:70Outperform
Price Target:
$80.00
▲(5.03% Upside)
Best Buy's overall stock score reflects a balanced view of its financial performance, technical indicators, and valuation. The company's positive revenue growth and strategic focus on online sales and partnerships are significant strengths. However, challenges such as high leverage and declining profitability margins weigh on the score. The technical analysis supports a bullish outlook, while the valuation offers a fair balance of growth and income potential.
Positive Factors
Financial Performance
Management expects sales and EPS to be at the higher end of the fiscal year guidance, indicating increased confidence in its second half plan.
Product Launches
The Nintendo Switch 2 launch served as a catalyst for consumers to shop, and the business performed well.
Strategic Initiatives
Incremental profit opportunities from marketplace and ads are expected as Best Buy plans to expand the Verizon and AT&T operating model in majority of stores, driving momentum in the mobile category.
Negative Factors
Consumer Electronics Trends
Underperformance is reiterated due to challenging consumer electronics industry trends and uncertainty around the impact of tariffs.
Market Competition
There is a weaker near-term outlook and long-term market share pressure from omnichannel competition, leading to a slightly lowered price objective.
Tariff Impact
Gross margin pressure builds as tariff costs filter into the business.

Best Buy Co (BBY) vs. SPDR S&P 500 ETF (SPY)

Best Buy Co Business Overview & Revenue Model

Company DescriptionBest Buy Co., Inc. retails technology products in the United States and Canada. The company operates in two segments, Domestic and International. Its stores provide computing products, such as desktops, notebooks, and peripherals; mobile phones comprising related mobile network carrier commissions; networking products; tablets covering e-readers; smartwatches; and consumer electronics consisting of digital imaging, health and fitness, home theater, portable audio comprising headphones and portable speakers, and smart home products. The company's stores also offer appliances, such as dishwashers, laundry, ovens, refrigerators, blenders, coffee makers, and vacuums; entertainment products consisting of drones, peripherals, movies, music, and toys, as well as gaming hardware and software, and virtual reality and other software products; and other products, such as baby, food and beverage, luggage, outdoor living, and sporting goods. In addition, it provides consultation, delivery, design, health-related, installation, memberships, repair, set-up, technical support, and warranty-related services. The company offers its products through stores and websites under the Best Buy, Best Buy Ads, Best Buy Business, Best Buy Health, CST, Current Health, Geek Squad, Lively, Magnolia, Best Buy Mobile, Pacific Kitchen, Home, and Yardbird, as well as domain names bestbuy.com, currenthealth.com, lively.com, yardbird.com, and bestbuy.ca. As of January 30, 2022, it had 1,144 stores. The company was formerly known as Sound of Music, Inc. The company was incorporated in 1966 and is headquartered in Richfield, Minnesota.
How the Company Makes MoneyBest Buy generates revenue primarily through the sale of consumer electronics and appliances, which includes products from major brands as well as its private label offerings. The company's revenue model is multifaceted, with key streams including in-store sales, online sales, and services provided through Geek Squad. In addition, Best Buy benefits from a robust e-commerce platform that has seen significant growth, particularly in response to changing consumer behaviors. The company also engages in strategic partnerships with leading tech brands, which not only enhance its product offerings but also drive traffic to its stores and online platforms. Seasonal promotions, loyalty programs, and financing options further contribute to its earnings by attracting and retaining customers.

Best Buy Co Key Performance Indicators (KPIs)

Any
Any
Domestic Online Revenue
Domestic Online Revenue
Measures sales from online channels within the domestic market, indicating the effectiveness of e-commerce strategies and digital presence.
Chart InsightsBest Buy's domestic online revenue has stabilized after a post-pandemic decline, with recent quarters showing consistent performance. The latest earnings call highlights a 32% contribution of online sales to total domestic sales, reflecting strategic improvements in omnichannel operations. Despite a slight decline in overall domestic comparable sales, online growth and enhanced customer satisfaction, as evidenced by a higher net promoter score, suggest resilience. The company's focus on ads and marketplace initiatives is expected to bolster future profitability, even as challenges like tariffs and lower investment income persist.
Data provided by:Main Street Data

Best Buy Co Earnings Call Summary

Earnings Call Date:Aug 28, 2025
(Q2-2026)
|
% Change Since: |
Next Earnings Date:Nov 25, 2025
Earnings Call Sentiment Positive
The earnings call reflects a positive sentiment with better-than-expected results, strong growth in key segments like gaming and computing, robust online sales, and successful vendor partnerships. However, challenges remain with declines in certain product categories and concerns about tariffs.
Q2-2026 Updates
Positive Updates
Better-Than-Expected Second Quarter Results
Best Buy reported revenue of $9.4 billion with an adjusted operating income rate of 3.9% and adjusted earnings per share of $1.28. Comparable sales growth was 1.6%, the highest in 3 years.
Growth in Gaming and Computing Segments
Sales growth was notably strong in gaming, computing, mobile phones, wearables, and headphones. The Switch 2 release significantly boosted gaming sales.
Strong Online Performance
Online sales accounted for 33% of domestic sales in Q2, marking the third consecutive quarter of year-over-year growth driven by higher traffic and increased app adoption.
Vendor Partnerships and Support
Vendor labor investment is expected to be 20% higher than last year. Partnerships with Meta, IKEA, and others are enhancing in-store experiences.
Launch of Best Buy Marketplace
The new marketplace has expanded product availability online by six times, offering more tech options from major brands and new vendors.
Strong Employee Engagement
Best Buy reported the lowest employee turnover rates in 10 years and higher engagement scores from employee surveys.
Negative Updates
Declines in Home Theater and Appliance Sales
Sales in home theater, appliance, tablet, and drone categories declined, partially offsetting growth in other product categories.
Tariff Concerns
Tariff rates have increased, but Best Buy has managed to mitigate the impact through vendor partnerships. However, there is uncertainty regarding potential impacts in the second half of the year.
International Gross Profit Rate Decrease
The international gross profit rate decreased by 210 basis points to 21.8%, primarily due to lower product margin rates.
Company Guidance
During Best Buy's second quarter fiscal 2026 earnings call, the company reported better-than-expected results with revenue reaching $9.4 billion and an adjusted operating income rate of 3.9%. Adjusted earnings per share were $1.28, driven by comparable sales growth of 1.6%, the highest in three years. The growth was attributed to a mix of new technology innovations and strong vendor partnerships, with notable sales increases in gaming, computing, mobile phones, wearables, and headphones. Best Buy's online sales comprised 33% of domestic sales, with 45% of online purchases picked up in-store. The company maintained its annual guidance, expecting revenue between $41.1 billion to $41.9 billion, comparable sales ranging from a decline of 1% to an increase of 1%, and an adjusted operating income rate of approximately 4.2%. Despite the ongoing tariff situation, Best Buy feels confident about its plans for the year's second half, citing strong customer engagement and a strategic focus on expanding partnerships and product offerings.

Best Buy Co Financial Statement Overview

Summary
Best Buy's financial statements present a mixed picture. While there is a positive revenue growth trajectory, profitability margins and cash conversion efficiency have declined. The balance sheet shows high leverage, which could pose risks if profitability does not improve. Overall, the company demonstrates resilience but faces challenges in maintaining operational efficiency and cash flow stability.
Income Statement
65
Positive
Best Buy's income statement shows a mixed performance. The TTM (Trailing-Twelve-Months) data indicates a gross profit margin of 22.54% and a net profit margin of 1.87%, which are relatively stable but lower than previous years. The revenue growth rate is positive at 36.2%, indicating a strong recovery from prior declines. However, EBIT and EBITDA margins have decreased, suggesting pressure on operating efficiency.
Balance Sheet
70
Positive
The balance sheet reflects a moderate financial position. The debt-to-equity ratio is 1.26, indicating a high level of leverage, though it has improved from previous periods. Return on equity is 26.16%, showing decent profitability. The equity ratio is not provided, but the overall leverage suggests potential risks if earnings do not improve.
Cash Flow
60
Neutral
Cash flow analysis reveals some challenges. The free cash flow growth rate is positive at 7.64%, but the operating cash flow to net income ratio is low at 0.24, indicating potential issues in converting income to cash. The free cash flow to net income ratio is 0.66, reflecting moderate cash generation relative to net income.
BreakdownTTMDec 2025Dec 2024Dec 2023Dec 2022Dec 2021
Income Statement
Total Revenue41.60B41.53B43.45B46.30B51.76B47.26B
Gross Profit9.26B9.38B9.60B9.91B11.64B10.57B
EBITDA1.94B2.21B2.60B2.74B3.92B3.27B
Net Income778.00M927.00M1.24B1.42B2.45B1.80B
Balance Sheet
Total Assets15.25B14.78B14.97B15.80B17.50B19.07B
Cash, Cash Equivalents and Short-Term Investments1.46B1.77B1.45B1.87B2.94B5.49B
Total Debt4.08B4.05B3.98B3.98B3.94B3.99B
Total Liabilities12.01B11.97B11.91B13.01B14.48B14.48B
Stockholders Equity3.24B2.81B3.05B2.79B3.02B4.59B
Cash Flow
Free Cash Flow1.35B1.39B675.00M894.00M2.52B4.21B
Operating Cash Flow2.06B2.10B1.47B1.82B3.25B4.93B
Investing Cash Flow-721.00M-704.00M-781.00M-962.00M-1.37B-788.00M
Financing Cash Flow-1.33B-1.31B-1.14B-1.81B-4.30B-876.00M

Best Buy Co Technical Analysis

Technical Analysis Sentiment
Positive
Last Price76.17
Price Trends
50DMA
70.36
Positive
100DMA
69.09
Positive
200DMA
74.69
Positive
Market Momentum
MACD
1.76
Negative
RSI
61.52
Neutral
STOCH
69.06
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For BBY, the sentiment is Positive. The current price of 76.17 is above the 20-day moving average (MA) of 73.11, above the 50-day MA of 70.36, and above the 200-day MA of 74.69, indicating a bullish trend. The MACD of 1.76 indicates Negative momentum. The RSI at 61.52 is Neutral, neither overbought nor oversold. The STOCH value of 69.06 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for BBY.

Best Buy Co Risk Analysis

Best Buy Co disclosed 27 risk factors in its most recent earnings report. Best Buy Co reported the most risks in the "Finance & Corporate" 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 (61)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
77
Outperform
$42.51B20.5642.63%1.23%3.05%-10.82%
76
Outperform
$24.71B22.3051.75%1.22%3.28%9.29%
72
Outperform
$17.14B47.4176.24%7.64%369.79%
70
Outperform
$16.28B18.3026.72%4.96%-3.23%-28.11%
61
Neutral
$17.97B12.87-5.30%2.97%1.26%-14.45%
57
Neutral
$5.17B43.23-39.97%2.38%-38.88%
54
Neutral
$10.01B48.506.62%-25.30%479.26%
* Consumer Cyclical Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
BBY
Best Buy Co
76.17
-17.45
-18.64%
EBAY
eBay
92.66
34.16
58.39%
GME
GameStop
22.61
-1.64
-6.76%
WSM
Williams-Sonoma
202.42
72.14
55.37%
ETSY
Etsy
54.06
1.71
3.27%
CHWY
Chewy
42.33
15.95
60.46%

Best Buy Co Corporate Events

Executive/Board ChangesBusiness Operations and Strategy
Best Buy Co Executive Damien Harmon to Step Down
Neutral
Jul 11, 2025

Best Buy Co., Inc. announced that Damien Harmon, the Senior Executive Vice President of Channel & Customer Experiences & Enterprise Services, will step down from his role effective July 18, 2025, to pursue other interests. The company has decided not to fill his position, opting instead to distribute his responsibilities among the CEO and other executive leaders, which may impact the company’s operational dynamics and leadership structure.

Executive/Board ChangesShareholder Meetings
Best Buy Co Shareholders Meeting Decisions June 2025
Neutral
Jun 17, 2025

On June 13, 2025, Best Buy Co., Inc. held its Regular Meeting of Shareholders where several key decisions were made. Shareholders elected directors for a one-year term, ratified the appointment of Deloitte & Touche LLP as the independent registered public accounting firm, and approved executive compensation and an amendment to the 2020 Omnibus Incentive Plan. However, several shareholder proposals, including those on shareholder rights, CEI participation, LGBTQIA+ inclusion efforts, and climate transition plans, were rejected.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

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.Date of analysis: Aug 29, 2025