NYSE:BBY

Stock Analysis Report

Executive Summary

Best Buy Co., Inc. operates as a retailer of technology products, services, and solutions in the United States, Canada, and Mexico.

Rewards

Trading at 39.3% below its fair value

Earnings grew by 40.1% over the past year

Pays a high and reliable dividend of 2.22%

Risk Analysis

No risks detected for BBY from our risk checks.


Snowflake Analysis

Outstanding track record with excellent balance sheet and pays a dividend.


Similar Companies

Share Price & News

How has Best Buy's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: BBY has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

0.06%

BBY

0.8%

US Specialty Retail

-1.0%

US Market


1 Year Return

49.3%

BBY

17.6%

US Specialty Retail

18.0%

US Market

Return vs Industry: BBY exceeded the US Specialty Retail industry which returned 17.6% over the past year.

Return vs Market: BBY exceeded the US Market which returned 18% over the past year.


Shareholder returns

BBYIndustryMarket
7 Day0.06%0.8%-1.0%
30 Day0.5%1.2%0.6%
90 Day24.3%5.8%7.9%
1 Year53.6%49.3%19.4%17.6%20.4%18.0%
3 Year114.3%98.1%44.7%37.7%48.0%38.5%
5 Year178.5%136.9%47.8%35.8%72.2%53.3%

Price Volatility Vs. Market

How volatile is Best Buy's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Best Buy undervalued compared to its fair value and its price relative to the market?

39.3%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: BBY ($90.26) is trading below our estimate of fair value ($148.73)

Significantly Below Fair Value: BBY is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: BBY is good value based on its PE Ratio (15.7x) compared to the Specialty Retail industry average (16.9x).

PE vs Market: BBY is good value based on its PE Ratio (15.7x) compared to the US market (18.2x).


Price to Earnings Growth Ratio

PEG Ratio: BBY is poor value based on its PEG Ratio (11x)


Price to Book Ratio

PB vs Industry: BBY is overvalued based on its PB Ratio (7.5x) compared to the US Specialty Retail industry average (1.5x).


Next Steps

Future Growth

How is Best Buy forecast to perform in the next 1 to 3 years based on estimates from 25 analysts?

1.4%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: BBY's forecast earnings growth (1.4% per year) is below the savings rate (1.7%).

Earnings vs Market: BBY's earnings (1.4% per year) are forecast to grow slower than the US market (14.2% per year).

High Growth Earnings: BBY's earnings are forecast to grow, but not significantly.

Revenue vs Market: BBY's revenue (2.2% per year) is forecast to grow slower than the US market (7.6% per year).

High Growth Revenue: BBY's revenue (2.2% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: BBY's Return on Equity is forecast to be very high in 3 years time (50.3%).


Next Steps

Past Performance

How has Best Buy performed over the past 5 years?

9.4%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: BBY has high quality earnings.

Growing Profit Margin: BBY's current net profit margins (3.5%) are higher than last year (2.5%).


Past Earnings Growth Analysis

Earnings Trend: BBY's earnings have grown by 9.4% per year over the past 5 years.

Accelerating Growth: BBY's earnings growth over the past year (40.1%) exceeds its 5-year average (9.4% per year).

Earnings vs Industry: BBY earnings growth over the past year (40.1%) exceeded the Specialty Retail industry 7.9%.


Return on Equity

High ROE: BBY's Return on Equity (49%) is considered outstanding.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Best Buy's financial position?


Financial Position Analysis

Short Term Liabilities: BBY's short term assets ($10.2B) exceed its short term liabilities ($9.7B).

Long Term Liabilities: BBY's short term assets ($10.2B) exceed its long term liabilities ($4.1B).


Debt to Equity History and Analysis

Debt Level: BBY's debt to equity ratio (38.8%) is considered satisfactory.

Reducing Debt: BBY's debt to equity ratio has increased from 32.7% to 38.8% over the past 5 years.

Debt Coverage: BBY's debt is well covered by operating cash flow (184.3%).

Interest Coverage: BBY's interest payments on its debt are well covered by EBIT (91.2x coverage).


Balance Sheet

Inventory Level: BBY has a high level of physical assets or inventory.

Debt Coverage by Assets: BBY's debt is covered by short term assets (assets are 8.4x debt).


Next Steps

Dividend

What is Best Buy's current dividend yield, its reliability and sustainability?

2.22%

Current Dividend Yield


Dividend Yield vs Market

company2.2%marketbottom25%1.4%markettop25%3.7%industryaverage1.8%forecastin3Years2.6%

Current dividend yield vs market & industry

Notable Dividend: BBY's dividend (2.22%) is higher than the bottom 25% of dividend payers in the US market (1.45%).

High Dividend: BBY's dividend (2.22%) is low compared to the top 25% of dividend payers in the US market (3.73%).


Stability and Growth of Payments

Stable Dividend: BBY's dividends per share have been stable in the past 10 years.

Growing Dividend: BBY's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (34.9%), BBY's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: BBY's dividends in 3 years are forecast to be well covered by earnings (35.9% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

0.8yrs

Average management tenure


CEO

Corie Barry (44yo)

0.7yrs

Tenure

US$5,919,680

Compensation

Ms. Corie Sue Barry has been the Chief Executive Officer and Director at Best Buy Co., Inc. since June 11, 2019. Ms. Barry served as Chief Financial Officer at Best Buy Co., Inc. from 2016 to June 11, 2019 ...


CEO Compensation Analysis

Compensation vs Market: Corie's total compensation ($USD5.92M) is below average for companies of similar size in the US market ($USD10.79M).

Compensation vs Earnings: Corie's compensation has increased by more than 20% in the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Hubert Joly
Executive Chairman4.7yrsUS$17.38m0.18% $42.9m
Corie Barry
CEO & Director0.7yrsUS$5.92m0.046% $10.9m
R. Mohan
President & COO0.7yrsUS$6.69m0.050% $11.9m
Kamy Scarlett
Chief Human Resources Officer & President of U.S. Retail Stores2.7yrsUS$4.20m0.012% $2.8m
Matthew Bilunas
Chief Financial Officer0.6yrsno data0.0081% $1.9m
Mathew Watson
Senior VP of Finance4.8yrsno data0.0080% $1.9m
Brian Tilzer
Chief Digital & Technology Officer1.8yrsno data0.0062% $1.5m
Mollie O'Brien
Vice President of Investor Relations0yrsno datano data
Todd Hartman
Executive VP0.8yrsno data0.016% $3.7m
Matthew Furman
Chief Communications & Public Affairs Officer0yrsno data0.024% $5.7m

0.8yrs

Average Tenure

48yo

Average Age

Experienced Management: BBY's management team is not considered experienced ( 0.8 years average tenure), which suggests a new team.


Board Members

NamePositionTenureCompensationOwnership
Hubert Joly
Executive Chairman4.7yrsUS$17.38m0.18% $42.9m
Corie Barry
CEO & Director0.7yrsUS$5.92m0.046% $10.9m
David Kenny
Independent Director6.4yrsUS$285.07kno data
Russell Fradin
Independent Director6.8yrsUS$405.07kno data
Lisa Caputo
Independent Director10.2yrsUS$285.07k0.0039% $927.8k
Kathy Higgins Victor
Independent Director20.3yrsUS$300.07k0.0042% $987.3k
J. Doyle
Lead Independent Director0.7yrsUS$291.12kno data
Claudia Munce
Independent Director3.9yrsUS$285.07kno data
Karen McLoughlin
Independent Director4.4yrsUS$285.07kno data
Thomas Millner
Independent Director6.1yrsUS$310.07kno data

5.4yrs

Average Tenure

58.5yo

Average Age

Experienced Board: BBY's board of directors are considered experienced (5.4 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: BBY insiders have only sold shares in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Best Buy Co., Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Best Buy Co., Inc.
  • Ticker: BBY
  • Exchange: NYSE
  • Founded: 1966
  • Industry: Computer and Electronics Retail
  • Sector: Retail
  • Market Cap: US$23.789b
  • Shares outstanding: 258.78m
  • Website: https://www.bestbuy.com

Number of Employees


Location

  • Best Buy Co., Inc.
  • 7601 Penn Avenue South
  • Richfield
  • Minnesota
  • 55423
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
BBYNYSE (New York Stock Exchange)YesCommon StockUSUSDApr 1985
BBY *BMV (Bolsa Mexicana de Valores)YesCommon StockMXMXNApr 1985
BUYDB (Deutsche Boerse AG)YesCommon StockDEEURApr 1985
BBYSWX (SIX Swiss Exchange)YesCommon StockCHCHFApr 1985
0R18LSE (London Stock Exchange)YesCommon StockGBUSDApr 1985
BUYETLX (Eurotlx)YesCommon StockITEURApr 1985
BBYY34BOVESPA (Bolsa de Valores de Sao Paulo)BDR EA REP 1 COM SHS USD0.10BRBRLJul 2016

Biography

Best Buy Co., Inc. operates as a retailer of technology products, services, and solutions in the United States, Canada, and Mexico. The company operates in two segments, Domestic and International. Its stores provide Computing and Mobile Phones, such as computing and peripherals, e-readers, networking products, tablets, and wearables, as well as mobile phones comprising related mobile network carrier commissions; consumer electronics, including digital imaging, health and fitness, home theater, portable audio, and smart home products; and entertainment products consisting of drones, movies, music, and toys, as well as gaming hardware and software, and virtual reality and other software products. The company’s stores also offer appliances, such as dishwashers, laundry appliances, ovens, refrigerators, blenders, coffee makers, and vacuums; and other products, such as beverages, snacks, and sundry items, as well as baby products, luggage, and sporting goods. In addition, it provides services comprising consultation, design, delivery, installation, memberships, protection plans, repair, set-up, and technical support services, as well as connected health services for aging consumers. The company offers its products through stores and Websites under the Best Buy, bestbuy.com, Best Buy Direct, Best Buy Express, Best Buy Mobile, Geek Squad, GreatCall, Magnolia, Pacific Kitchen and Home, bestbuy.ca, and bestbuy.com.mx brand names, as well as through mobile applications and call centers. As of February 2, 2019, it had approximately 1,187 large-format and 51 small-format stores. The company was formerly known as Sound of Music, Inc. Best Buy Co., Inc. was founded in 1966 and is headquartered in Richfield, Minnesota. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/22 00:40
End of Day Share Price2020/02/21 00:00
Earnings2019/11/02
Annual Earnings2019/02/02


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.