Now trading at a price of $79.3, Best Buy Co. has moved -1.6% Friday.
As of April 2023, the company's 50-day average price was $75.33. Best Buy Co., Inc. engages in the retail of technology products in the United States and Canada. Based in Richfield, MN, the large-cap Consumer Discretionary company has 52,200 full time employees. Best Buy Co. has offered a 4.4% dividend yield over the last 12 months.
Stable Revenues With Increasing Reinvestment in the Business:
| 2020-01-31 | 2021-01-31 | 2022-01-31 | 2023-01-31 | |
|---|---|---|---|---|
| Revenue (MM) | $43,638 | $47,262 | $51,761 | $46,298 |
| Gross Margins | 23.0% | 22.4% | 22.5% | 21.4% |
| Operating Margins | 4.7% | 5.6% | 5.8% | 4.2% |
| Net Margins | 3.53% | 3.8% | 4.74% | 3.06% |
| Net Income (MM) | $1,541 | $1,798 | $2,454 | $1,419 |
| Net Interest Expense (MM) | -64 | -52 | -25 | -35 |
| Net Interest Expense (MM) | -$64 | -$52 | -$25 | -$35 |
| Depreciation & Amort. (MM) | -$812 | -$839 | -$869 | -$918 |
| Earnings Per Share | $5.75 | $6.84 | $9.84 | $5.63 |
| EPS Growth | n/a | 18.96% | 43.86% | -42.78% |
| Diluted Shares (MM) | 268 | 263 | 249 | 218 |
| Free Cash Flow (MM) | $1,822 | $4,214 | $2,515 | $894 |
| Capital Expenditures (MM) | -$743 | -$713 | -$737 | -$930 |
| Net Current Assets (MM) | -$3,255 | -$1,940 | -$3,945 | -$4,206 |
| Current Ratio | 1.1 | 1.19 | 0.99 | 0.98 |
| Long Term Debt (MM) | $1,257 | $1,253 | $1,216 | $1,160 |
| Net Debt / EBITDA | -0.1 | -1.05 | -0.27 | -0.02 |
Best Buy Co. has stable revenues and increasing reinvestment in the business and low leverage. Additionally, the company's financial statements display average operating margins with a stable trend and generally positive cash flows. However, the firm has slimmer gross margins than its peers. Finally, we note that Best Buy Co. has flat EPS growth.
A Very Low P/E Ratio but Trades Above Its Graham Number:
Best Buy Co. has a trailing twelve month P/E ratio of 13.4, compared to an average of 22.33 for the Consumer Discretionary sector. Based on its EPS guidance of $6.85, the company has a forward P/E ratio of 11.0. The 3.6% compound average growth rate of Best Buy Co.'s historical and projected earnings per share yields a PEG ratio of 3.76. This suggests that these shares are overvalued. Furthermore, Best Buy Co. is likely overvalued compared to the book value of its equity, since its P/B ratio of 6.2 is higher than the sector average of 3.12. The company's shares are currently trading 76.6% above their Graham number. Ultimately, Best Buy Co.'s strong cash flows, decent earnings multiple, and healthy debt levels factor towards it being fairly valued, its elevated P/B ratio notwithstanding.
Analysts Give Best Buy Co. an Average Rating of Hold:
The 23 analysts following Best Buy Co. have set target prices ranging from $62.0 to $110.0 per share, for an average of $79.0 with a hold rating. As of April 2023, the company is trading -4.6% away from its average target price, indicating that there is an analyst consensus of little upside potential.
Best Buy Co. has an average amount of shares sold short because 5.9% of the company's shares are sold short. Institutions own 82.2% of the company's shares, and the insider ownership rate stands at 10.98%, suggesting a large amount of insider shareholders. The largest shareholder is the Vanguard Group, Inc., whose 11% stake in the company is worth $1,928,418,584.
