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

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Best Buy (BBY - Free Report) closed the most recent trading day at $63.77, moving +1.46% from the previous trading session. This move lagged the S&P 500's daily gain of 2.37%. At the same time, the Dow added 2.47%, and the tech-heavy Nasdaq lost 0.07%.

Prior to today's trading, shares of the consumer electronics retailer had lost 8.34% over the past month. This has lagged the Retail-Wholesale sector's loss of 6.06% and the S&P 500's loss of 4.82% in that time.

Best Buy will be looking to display strength as it nears its next earnings release. In that report, analysts expect Best Buy to post earnings of $1.03 per share. This would mark a year-over-year decline of 50.48%. Our most recent consensus estimate is calling for quarterly revenue of $10.29 billion, down 13.6% from the year-ago period.

BBY's full-year Zacks Consensus Estimates are calling for earnings of $6.17 per share and revenue of $45.98 billion. These results would represent year-over-year changes of -38.36% and -11.17%, respectively.

Any recent changes to analyst estimates for Best Buy should also be noted by investors. These recent revisions tend to reflect the evolving nature of short-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Our research shows that these estimate changes are directly correlated with near-term stock prices. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. Best Buy is currently sporting a Zacks Rank of #3 (Hold).

In terms of valuation, Best Buy is currently trading at a Forward P/E ratio of 10.18. Its industry sports an average Forward P/E of 10.18, so we one might conclude that Best Buy is trading at a no noticeable deviation comparatively.

We can also see that BBY currently has a PEG ratio of 0.57. 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 was holding an average PEG ratio of 0.57 at yesterday's closing price.

The Retail - Consumer Electronics industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 48, putting it in the top 20% 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.

To follow BBY in the coming trading sessions, be sure to utilize Zacks.com.


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