Is Best Buy Co., Inc. overvalued or undervalued?

As of 29 May 2025, the valuation grade for Best Buy Co., Inc. has moved from fair to very attractive, indicating a significant improvement in its investment appeal. The company is currently undervalued, with a P/E ratio of 13, which is notably lower than its peer average of approximately 12.021. Additionally, Best Buy's EV to EBITDA stands at 6.20, while its peers average around 5.7124, suggesting that it is trading at a reasonable valuation relative to its earnings potential.
Key financial metrics further support this assessment, with a robust ROCE of 51.18% and an impressive ROE of 44.15%. The company's dividend yield of 5.32% also adds to its attractiveness for income-focused investors. Despite recent underperformance compared to the S&P 500, with a year-to-date return of -22.65% versus the index's 2.44%, the overall valuation metrics indicate that Best Buy Co., Inc. presents a compelling investment opportunity at its current price of 66.37.