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

As of 29 May 2025, the valuation grade for Best Buy Co., Inc. moved from expensive to very attractive, indicating a shift towards a more favorable assessment. The company appears undervalued, with a P/E ratio of 13, significantly lower than the industry average, and an EV to EBITDA ratio of 6.20, suggesting that the stock is trading at a discount relative to its earnings potential. Additionally, the company boasts a high ROCE of 51.18% and a robust ROE of 44.15%, further supporting its attractive valuation.
In comparison to peers, Best Buy's P/E ratio of 13.545 is competitive, while its EV to EBITDA of 6.2951 highlights its efficiency in generating earnings relative to its enterprise value. Despite recent underperformance, with a 1Y return of -25.58% compared to the S&P 500's 17.14%, the valuation metrics suggest that Best Buy may present a compelling investment opportunity moving forward.