Best Buy (BBY): looking solid before the earnings?

6:08 am ET, 27 Aug 2018

Best Buy Co., Inc. (BBY) shares are trading at $82.50.  The retailer is reporting its quarterly earnings on Tuesday morning, August 28, before the market opens.  What should investors know about the BBY stock? What's BBY stock price forecast?

Investors will be watching out for Best Buy's operational efficiency improvements under the new CEO Hubert Joly.  The company's Renew Blue plan is shooting for accelerated online sales growth, improved multichannel customer experience, optimizing store square footage and US real estate portfolio. The company is also focused on gaining supply chain efficiencies, and cutting unnecessary selling, general, and administrative costs--necessary to compete in an evolving consumer electronics retail market. 

Best Buy reaffirmed its position as a reliable operator in the evolving retail marketplace, following up its strong holiday results with 7.1% comps showing strength across several categories. Best Buy isn't just benefiting from favorable product cycles--mobile, appliances, computing, tablets, and smart home were called out as key drivers--and a healthy U.S. housing market, but also an improved in-store and online customer experience. 

Best Buy can carry much of its current momentum into the second half via its Fire TV-enabled television partnership with Amazon and total tech support rollout, setting the stage to exceed its unchanged fiscal 2019 targets, including revenue of $41 billion-$42 billion, and operating margin of 4.5%--flat versus fiscal 2018. 

What is the sentiment towards the BBY stock? Our technical analysis shows that:

  • The stock short-term sentiment (next 30 days) is trending positive;
  • The mid-term sentiment (3-6 months) is trending negative;
  • The long-term sentiment (9-12 months) is neutral. 

Best Buy (BBY) short share of float is 8.96%. The stock is much more frequently shorted than the average industry, sector or S&P 500 stock.

Best Buy (BBY) average analyst price target ($74.44) is -9.34% below its current price ($82.11).

For the latest price and information on Best Buy Co., Inc., please visit Finstead and search for "BBY price" or "BBY news".

Disclaimer: The news article above expresses the author’s opinion about the topic of the article. We strongly advise you not to base your investment decisions just on this article alone. If you’d like to become a writer for Finny Bites, please send us an email at hi@askfinny.com.

Roku (ROKU): buy the dip?

2:40 pm ET, 19 Apr 2018

Roku (NASDAQ: ROKU) shares were up by about 3% in today's trading. What do you need to know about Roku and the recent developments around this company?  What is the stock price forecast (prediction)?

Roku provides TV streaming services, while enabling content publishers to monetize large audiences, and providing unique features to advertisers to engage viewers.  It also has a TV which you can buy at Costco or Best Buy.  

Roku's shares recently witnessed a dip when Amazon inked a deal with Best Buy for selling Amazon Fire-powered TVs at Best Buy locations.  Best Buy is now the only retailer that sells those devices.

Currently, there is no information available regarding the pricing of Amazon Fire TVs, their functionality, and features relative to other comparable TVs. So, there is no strong reason to believe that Amazon Fire TVs will be popular. 

Based on broad consumer research, customers show no preference for a single technology when it comes to smart TVs. Instead, they prefer to keep their options around TV and streaming boxes open, so that they are not locked into a single technology. 

In response to the Amazon's move, Roku emphasized the availability of its various TV models among major US retailer.  The company also underlined it’s one of the major OEM partner brands.

Recently, Roku announced ESPN+ channel availability on its platform. This provides users access to many live events, on-demand content and original programming which are unavailable on ESPN’s TV and digital networks.

Can the stock rise further? Per Finstead Research, the stock has the average price target of almost $39. It has an upside of about 22%.

The company has negative valuation ratios, indicating it’s not profitable.  Trading shares of unprofitable companies is a highly speculative activity.

The stock’s high short share of float indicates potential volatility in the upcoming days.


Disclaimer: The news article above expresses the author’s opinion about the topic of the article. We strongly advise you not to base your investment decisions just on this article alone. If you’d like to become a writer for Finny Bites, please send us an email at hi@askfinny.com.

Best Buy Co., Inc. (BBY) Stock Guide

Updated at: 2:32 am ET, 12 Aug 2020

Before we start: if you're looking for BBY stock price, you can quickly find it out by visiting Finny and typing "BBY quote". If you're looking for a quick scoop on BBY stock (chart, price target, market cap, news and buy or sell analysis), go to Finny and look for "BBY". You'll get all this info in one place. Or you can just type "BBY news" to get the latest stock news.

Looking to buy or sell Best Buy Co., Inc. (BBY)? Interested in getting the full scoop on BBY, including earnings and dividends, stock forecast, buy or sell analysis and key stats? If so, you came to the right place.

In this BBY stock guide, we'll address key questions about BBY, above and beyond what you can find on Yahoo Finance, Zacks, MarketWatch or Morningstar.

Here is what you'll be able to find in this guide:

Earnings and Dividends: earnings, earnings date, dividend rate and dividend yield;
Analyst Predictions: stock forecast and analyst ratings;
Analysis: Finny Score and buy or sell analysis;
Key Stats: revenue, market cap, revenue growth, profit margin, P/E ratio, P/B ratio, industry, sector, and number of employees.

And here is the list of questions we'll answer:
1. What are BBY earnings?
2. When is BBY earnings date?
3. What is BBY dividend?
4. What is BBY dividend yield?
5. What is BBY stock forecast (i.e., prediction)?
6. BBY buy or sell? What is BBY Finny Score?
7. What are the reasons to buy BBY? Why should I buy BBY stock?
8. What are the reasons to sell BBY? Why should I sell BBY stock?
9. What are BBY key stats: revenue, market cap, revenue growth, profit margin, P/E ratio, P/B ratio industry, sector, and number of employees?

So let's start. Scroll down to the question that interests you the most.

Earnings and Dividends

1. What are BBY earnings?

BBY trailing 12-month earnings per share (EPS) is $5.41.

2. When is BBY earnings date?

BBY earnings date is August 25, 2020.

3. What is BBY dividend?

BBY forward dividend is $2.20.

4. What is BBY dividend yield?

BBY forward dividend yield is 2.11%.

Analyst Predictions

5. What is BBY stock forecast (i.e., prediction)?

Based on BBY analyst price targets, BBY stock forecast is $98.59 (for a year from now). That means the average analyst price target for BBY stock is $98.59. The prediction is based on 25 analyst estimates.

The low price target for BBY is $65.00, while the high price target is $140.30.

BBY analyst rating is Hold.

Analysis

6. BBY buy or sell? What is BBY Finny Score?

#{finnyScore:44}Our quantitative analysis shows 4 reasons to buy and 5 reasons to sell BBY, resulting in Finny Score of 44.

7. What are the reasons to buy BBY? Why should I buy BBY stock?

Here are the reasons to buy BBY stock:

  • Best Buy has re-engineered its online sales platform, improving the user experience and adding greater ship-from-store fulfillment capabilities.
  • New television, smartphone, gaming, health/wellness, connected home and virtual reality advances can offer product cycles that drive periodic top-line outperformance.
  • Best Buy has cut more than $1 billion from its annual cost structure and is targeting another $400 million in operating income improvement through improved returns, replacements, and damages processes and operational efficiencies.
  • Best Buy has exhibited a bullish run in the index when compared with the industry and the broader Retail-Wholesale sector.
  • Following the solid close to fiscal 2018, Best Buy provided an encouraging view for the first quarter and fiscal 2019. For the fiscal year, management forecasts Enterprise revenues of $41-42 billion with comps growth of nearly flat to up 2%.
  • Owing to the shift in consumer buying behavior, retailers find the store-in-a-store concept more viable and profitable to reach their target group. We believe that the strategy seems compelling to most retailers and is often considered a game changer as it facilitates the display of different brands under one roof and ensures a larger footfall. Best Buy is leaving no stone unturned to attract consumers and attain incremental revenues.
  • Following the successful completion of “Renew Blue” program, the company has launched a fresh strategy called “Best Buy 2020: Building the New Blue”. In an effort to drive growth, the company is focused on expansion of multi-channel retail business, offering services and solutions that solve customer need. Moreover, it is focusing on accelerating growth in Canada and Mexico.
  • BBY profitability is improving. The YoY profit margin change was 1.04 percentage points. See BBY profitability chart.
  • BBY forward dividend yield is 2.11%, higher than the industry (0.24%) and sector (0.55%) forward dividend yields. See BBY forward dividend chart.
  • BBY cash to debt ratio is 0.76, higher than the average industry (0.16) and sector (0.13) cash to debt ratio. See BBY cash to debt chart.
  • BBY Enterprise Value/EBITDA multiple is 10.18, which is low compared to its industry peers’ Enterprise Value/EBITDA ratios. See BBY Enterprise Value/EBITDA chart.

8. What are the reasons to sell BBY? Why should I sell BBY stock?

Let's look at the reasons to sell BBY stock (i.e., the bear case):

  • Online retailers, mass merchants, warehouse clubs, and consumer product OEMs all compete for market share, resulting in aggressive industry price competition and constraining Best Buy's longer-term margin expansion opportunities.
  • Entertainment sales remain sluggish. Replacement categories in Best Buy's stores are often slower-turning, lower-margin products.
  • Warranty sales have historically been a disproportionate contributor to margins. If consumers continue to gravitate to online retailers or vendor direct-sales platforms, declining warranty attachment rates will weigh on margins.
  • Analysts believe that Best Buy's investment activities to boost e-commerce operations and supply chains to counter competition may strain margins in the coming quarters. We also noted that SG&A expenses have increased 18.6%, 2.2% and 3.2% in the fourth, third and second quarter of fiscal 2018, respectively. Management hinted that higher investments in supply chain and increased transportation costs are likely to weigh upon gross profit of the Domestic business by approximately 25 basis points in each quarter.
  • Considering price-to-earnings (P/E) ratio, Best Buy looks overvalued when compared with the industry. The stock has a trailing 12-month P/E ratio of 17.32, which is above the median level of 15.51 but below the high level of 19.42 scaled in the past one year. Meanwhile, the trailing 12-month P/E ratio for the industry is 14.82.
  • We believe that challenging retail landscape, aggressive promotional strategies and waning store traffic might hurt Best Buy's performance. The company faces intense competition from a diverse group of competitors, specially online retailers such as Amazon, Wal-Mart and other consumer electronics retailers, mass merchants, mobile phone service carriers, specialty home office retailers, and numerous direct-to-consumer websites. This may adversely affect both the top and the bottom-line growth.
  • BBY stock price ($104.12) is close to the 52-week high ($105.35). Perhaps now is a good time to sell? See BBY price chart.
  • BBY quarterly revenue growth was -6.30%, lower than the industry and sector average revenue growth (0.81% and 0.78%, respectively). See BBY revenue growth chart.
  • BBY PEG ratio (P/E adjusted for growth) is 2.98, which is high compared to its industry peers’ PEG ratios. See BBY PEG chart.
  • BBY average analyst price target ($98.59) is below its current price ($104.12). See BBY price target chart.
  • BBY short interest (days to cover the shorts) ratio is 2.37. The stock garners more short interest than the average industry, sector or S&P 500 stock. See BBY short interest ratio chart.

Key Stats

9. What are BBY key stats : revenue, market cap, revenue growth, profit margin, P/E ratio, P/B ratio industry, sector, and number of employees?

Let's look at the key statistics for BBY:

Metrics BBY
Price $109.50
Average Price Target / Upside $98.59 / -9.96%
Average Analyst Rating Hold
Forward Dividend Yield 2.04%
Industry Specialty Retail
Sector Consumer Cyclical
Number of Employees 125,000
Market Cap $28.28B
Forward P/E Ratio 17.27
Price/Book Ratio 0.66
Revenue (TTM) $43.06B
YoY Quarterly Revenue Growth -6.30%
Profit Margin 3.33%

If you liked this analysis, check out Stock Guides for other stocks.

Disclaimer: The news article above expresses the author’s opinion about the topic of the article. We strongly advise you not to base your investment decisions just on this article alone. If you’d like to become a writer for Finny Bites, please send us an email at hi@askfinny.com.

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