BEST BUY CO INC (BBY) Stock Fundamental Analysis
NYSE:BBY - New York Stock Exchange, Inc. - US0865161014 - Common Stock - Currency: USD
We assign a fundamental rating of 6 out of 10 to BBY. BBY was compared to 120 industry peers in the Specialty Retail industry. While BBY has a great profitability rating, there are some minor concerns on its financial health. BBY is not valued too expensively and it also shows a decent growth rate. Finally BBY also has an excellent dividend rating. These ratings could make BBY a good candidate for dividend investing.
1. Profitability
1.1 Basic Checks
BBY had positive earnings in the past year.
BBY had a positive operating cash flow in the past year.
Each year in the past 5 years BBY has been profitable.
Each year in the past 5 years BBY had a positive operating cash flow.
1.2 Ratios
BBY has a Return On Assets of 7.46%. This is in the better half of the industry: BBY outperforms 78.63% of its industry peers.
Looking at the Return On Equity, with a value of 41.21%, BBY belongs to the top of the industry, outperforming 91.45% of the companies in the same industry.
Looking at the Return On Invested Capital, with a value of 19.60%, BBY belongs to the top of the industry, outperforming 87.18% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for BBY is significantly above the industry average of 12.43%.
The 3 year average ROIC (25.19%) for BBY is well above the current ROIC(19.60%). The reason for the recent decline needs to be investigated.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.46% | ||
| ROE | 41.21% | ||
| ROIC | 19.6% |
ROA(3y)10.43%
ROA(5y)10.12%
ROE(3y)57.56%
ROE(5y)51.23%
ROIC(3y)25.19%
ROIC(5y)24.01%
1.3 Margins
BBY has a better Profit Margin (3.01%) than 67.52% of its industry peers.
BBY's Profit Margin has declined in the last couple of years.
BBY's Operating Margin of 4.21% is in line compared to the rest of the industry. BBY outperforms 59.83% of its industry peers.
In the last couple of years the Operating Margin of BBY has declined.
The Gross Margin of BBY (22.42%) is worse than 78.63% of its industry peers.
BBY's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 4.21% | ||
| PM (TTM) | 3.01% | ||
| GM | 22.42% |
OM growth 3Y-10.12%
OM growth 5Y-2.87%
PM growth 3Y-9.11%
PM growth 5Y-3.51%
GM growth 3Y-0.48%
GM growth 5Y-0.99%
2. Health
2.1 Basic Checks
BBY has a Return on Invested Capital (ROIC), which is well above the Cost of Capital (WACC), which means it is creating value.
Compared to 1 year ago, BBY has less shares outstanding
BBY has less shares outstanding than it did 5 years ago.
The debt/assets ratio for BBY is higher compared to a year ago.
2.2 Solvency
BBY has an Altman-Z score of 3.82. This indicates that BBY is financially healthy and has little risk of bankruptcy at the moment.
BBY's Altman-Z score of 3.82 is fine compared to the rest of the industry. BBY outperforms 79.49% of its industry peers.
The Debt to FCF ratio of BBY is 1.12, which is an excellent value as it means it would take BBY, only 1.12 years of fcf income to pay off all of its debts.
The Debt to FCF ratio of BBY (1.12) is better than 81.20% of its industry peers.
A Debt/Equity ratio of 0.37 indicates that BBY is not too dependend on debt financing.
The Debt to Equity ratio of BBY (0.37) is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.37 | ||
| Debt/FCF | 1.12 | ||
| Altman-Z | 3.82 |
ROIC/WACC1.96
WACC10%
2.3 Liquidity
A Current Ratio of 1.00 indicates that BBY should not have too much problems paying its short term obligations.
With a Current ratio value of 1.00, BBY is not doing good in the industry: 76.07% of the companies in the same industry are doing better.
A Quick Ratio of 0.22 indicates that BBY may have some problems paying its short term obligations.
BBY has a worse Quick ratio (0.22) than 85.47% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1 | ||
| Quick Ratio | 0.22 |
3. Growth
3.1 Past
BBY shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 3.99%.
BBY shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 3.47% yearly.
The Revenue has decreased by -3.02% in the past year.
BBY shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 0.27% yearly.
EPS 1Y (TTM)3.99%
EPS 3Y-6.95%
EPS 5Y3.47%
EPS Q2Q%-2.33%
Revenue 1Y (TTM)-3.02%
Revenue growth 3Y-2.76%
Revenue growth 5Y0.27%
Sales Q2Q%-3.19%
3.2 Future
The Earnings Per Share is expected to grow by 14.53% on average over the next years. This is quite good.
The Revenue is expected to grow by 0.99% on average over the next years.
EPS Next Y-2.2%
EPS Next 2Y2.09%
EPS Next 3Y5.21%
EPS Next 5Y14.53%
Revenue Next Year-4.86%
Revenue Next 2Y-1.81%
Revenue Next 3Y-0.34%
Revenue Next 5Y0.99%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 13.04 indicates a correct valuation of BBY.
81.20% of the companies in the same industry are more expensive than BBY, based on the Price/Earnings ratio.
BBY's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 28.47.
The Price/Forward Earnings ratio is 12.79, which indicates a correct valuation of BBY.
Based on the Price/Forward Earnings ratio, BBY is valued a bit cheaper than the industry average as 74.36% of the companies are valued more expensively.
BBY is valuated cheaply when we compare the Price/Forward Earnings ratio to 92.74, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.04 | ||
| Fwd PE | 12.79 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of BBY indicates a somewhat cheap valuation: BBY is cheaper than 78.63% of the companies listed in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of BBY indicates a somewhat cheap valuation: BBY is cheaper than 75.21% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 17.65 | ||
| EV/EBITDA | 6.95 |
4.3 Compensation for Growth
BBY has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)3.76
EPS Next 2Y2.09%
EPS Next 3Y5.21%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 4.33%, BBY is a good candidate for dividend investing.
BBY's Dividend Yield is rather good when compared to the industry average which is at 3.31. BBY pays more dividend than 92.31% of the companies in the same industry.
BBY's Dividend Yield is rather good when compared to the S&P500 average which is at 2.28.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.33% |
5.2 History
On average, the dividend of BBY grows each year by 15.34%, which is quite nice.
BBY has paid a dividend for at least 10 years, which is a reliable track record.
BBY has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)15.34%
Div Incr Years13
Div Non Decr Years13
5.3 Sustainability
BBY pays out 63.39% of its income as dividend. This is not a sustainable payout ratio.
BBY's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP63.39%
EPS Next 2Y2.09%
EPS Next 3Y5.21%
BEST BUY CO INC
NYSE:BBY (2/4/2025, 8:04:00 PM)
After market: 85 -0.05 (-0.06%)85.05
+1.27 (+1.52%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Discretionary Distribution & Retail
GICS IndustrySpecialty Retail
Earnings (Last)
Earnings (Next)
Inst Owners85.91%
Inst Owner Change-0.89%
Ins Owners0.29%
Ins Owner Change-2.61%
Market Cap18.18B
Analysts69.7
Price Target101.15 (18.93%)
Short Float %7.35%
Short Ratio4.55
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.33% |
Yearly Dividend3.7
Dividend Growth(5Y)15.34%
DP63.39%
Div Incr Years13
Div Non Decr Years13
Ex-DateN/A
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)5.52%
Min EPS beat(2)-3.62%
Max EPS beat(2)14.65%
EPS beat(4)3
Avg EPS beat(4)7.07%
Min EPS beat(4)-3.62%
Max EPS beat(4)14.65%
EPS beat(8)7
Avg EPS beat(8)9.37%
EPS beat(12)9
Avg EPS beat(12)10.28%
EPS beat(16)12
Avg EPS beat(16)15.57%
Revenue beat(2)0
Avg Revenue beat(2)-1.73%
Min Revenue beat(2)-2.93%
Max Revenue beat(2)-0.52%
Revenue beat(4)0
Avg Revenue beat(4)-1.51%
Min Revenue beat(4)-2.93%
Max Revenue beat(4)-0.39%
Revenue beat(8)0
Avg Revenue beat(8)-1.4%
Revenue beat(12)2
Avg Revenue beat(12)-0.89%
Revenue beat(16)5
Avg Revenue beat(16)0.05%
PT rev (1m)-0.76%
PT rev (3m)-4.87%
EPS NQ rev (1m)-0.73%
EPS NQ rev (3m)-3.26%
EPS NY rev (1m)-0.01%
EPS NY rev (3m)-1.22%
Revenue NQ rev (1m)-0.22%
Revenue NQ rev (3m)-2.81%
Revenue NY rev (1m)0.01%
Revenue NY rev (3m)-0.79%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.04 | ||
| Fwd PE | 12.79 | ||
| P/S | 0.43 | ||
| P/FCF | 17.65 | ||
| P/OCF | 10.44 | ||
| P/B | 5.9 | ||
| P/tB | 11.34 | ||
| EV/EBITDA | 6.95 |
EPS(TTM)6.52
EY7.67%
EPS(NY)6.65
Fwd EY7.82%
FCF(TTM)4.82
FCFY5.66%
OCF(TTM)8.14
OCFY9.57%
SpS197.5
BVpS14.42
TBVpS7.5
PEG (NY)N/A
PEG (5Y)3.76
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.46% | ||
| ROE | 41.21% | ||
| ROCE | 25.16% | ||
| ROIC | 19.6% | ||
| ROICexc | 21.56% | ||
| ROICexgc | 28.01% | ||
| OM | 4.21% | ||
| PM (TTM) | 3.01% | ||
| GM | 22.42% | ||
| FCFM | 2.44% |
ROA(3y)10.43%
ROA(5y)10.12%
ROE(3y)57.56%
ROE(5y)51.23%
ROIC(3y)25.19%
ROIC(5y)24.01%
ROICexc(3y)38.26%
ROICexc(5y)41.73%
ROICexgc(3y)60.85%
ROICexgc(5y)66.12%
ROCE(3y)32.34%
ROCE(5y)30.9%
ROICexcg growth 3Y-32.67%
ROICexcg growth 5Y-11.96%
ROICexc growth 3Y-27.81%
ROICexc growth 5Y-11.85%
OM growth 3Y-10.12%
OM growth 5Y-2.87%
PM growth 3Y-9.11%
PM growth 5Y-3.51%
GM growth 3Y-0.48%
GM growth 5Y-0.99%
F-Score6
Asset Turnover2.48
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.37 | ||
| Debt/FCF | 1.12 | ||
| Debt/EBITDA | 0.43 | ||
| Cap/Depr | 81.63% | ||
| Cap/Sales | 1.68% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 65.7% | ||
| Profit Quality | 81.1% | ||
| Current Ratio | 1 | ||
| Quick Ratio | 0.22 | ||
| Altman-Z | 3.82 |
F-Score6
WACC10%
ROIC/WACC1.96
Cap/Depr(3y)90.75%
Cap/Depr(5y)89.75%
Cap/Sales(3y)1.75%
Cap/Sales(5y)1.69%
Profit Quality(3y)73.29%
Profit Quality(5y)114.5%
High Growth Momentum
Growth
EPS 1Y (TTM)3.99%
EPS 3Y-6.95%
EPS 5Y3.47%
EPS Q2Q%-2.33%
EPS Next Y-2.2%
EPS Next 2Y2.09%
EPS Next 3Y5.21%
EPS Next 5Y14.53%
Revenue 1Y (TTM)-3.02%
Revenue growth 3Y-2.76%
Revenue growth 5Y0.27%
Sales Q2Q%-3.19%
Revenue Next Year-4.86%
Revenue Next 2Y-1.81%
Revenue Next 3Y-0.34%
Revenue Next 5Y0.99%
EBIT growth 1Y5.89%
EBIT growth 3Y-12.6%
EBIT growth 5Y-2.61%
EBIT Next Year46.89%
EBIT Next 3Y17.4%
EBIT Next 5Y11.29%
FCF growth 1Y-14.02%
FCF growth 3Y-45.69%
FCF growth 5Y-15.74%
OCF growth 1Y-16.42%
OCF growth 3Y-33.18%
OCF growth 5Y-9.4%