Best Buy Co., Inc. (BBY) Stock Recommendation | Score, Valuation, Technicals & Financial Trend

Score

Click here to find our call on this stock

Strong Sell

Sell

Hold

Buy

Strong Buy

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Comparison

Company

Score

Quality

Valuation

Financial

Technical

GameStop Corp.

Best Buy Co., Inc.

Conn's, Inc.

Hamilton Beach Brands Holding Co.

Polished.com, Inc.

Why is Best Buy Co., Inc. ?

High Management Efficiency with a high ROCE of 88.59%

Company has a low Debt to Equity ratio (avg) at times

Poor long term growth as Operating profit has grown by an annual rate -3.64% of over the last 5 years

Flat results in Jul 25

OPERATING CASH FLOW(Y) Lowest at USD 2,064 MM
ROCE(HY) Lowest at 26.72%
INVENTORY TURNOVER RATIO(HY) Lowest at 5.6 times

With ROCE of 51.18%, it has a very attractive valuation with a 4.74 Enterprise value to Capital Employed

The stock is trading at a discount compared to its peers' average historical valuations
Over the past year, while the stock has generated a return of -13.90%, its profits have fallen by -11.7%

High Institutional Holdings at 90.99%

These investors have better capability and resources to analyse fundamentals of companies than most retail investors.

Consistent Underperformance against the benchmark over the last 3 years

Along with generating -13.90% returns in the last 1 year, the stock has also underperformed S&P 500 in each of the last 3 annual periods

Real-Time Research Report

Verdict Report

How much should you hold?

Overall Portfolio exposure to Best Buy Co., Inc. should be less than 10%
Overall Portfolio exposure to Electronics & Appliances should be less than 30%

(If sector exposure > 30%, please use optimiser tool to see which are the best stocks to hold in Electronics & Appliances)

When to exit? - We will constantly monitor the company and suggest at the appropriate time to exit from the stock

Is Best Buy Co., Inc. for you?

High Risk, Low Return

Absolute

Risk Adjusted

Volatility

Best Buy Co., Inc.

-100.0%

-0.32

43.45%

S&P 500

15.4%

0.70

20.15%

Quality

Management Risk

Growth

Capital Structure

Quality grade scale :

Below Average, Average, Good, Excellent

Quality key factors

Factor

Value

Sales Growth (5y)

-0.86%

EBIT Growth (5y)

-3.64%

EBIT to Interest (avg)

59.69

Debt to EBITDA (avg)

Net Debt is too low

Net Debt to Equity (avg)

0.05

Sales to Capital Employed (avg)

9.13

Tax Ratio

26.09%

Dividend Payout Ratio

87.85%

Pledged Shares

Institutional Holding

95.02%

ROCE (avg)

88.59%

ROE (avg)

55.65%

Valuation

Valuation Scorecard

Valuation grade scale :

Very Risky, Risky, Very Expensive, Expensive, Fair, Attractive, Very Attractive

Valuation Key Factors

Factor

Value

P/E Ratio

Industry P/E

Price to Book Value

5.59

EV to EBIT

9.27

EV to EBITDA

6.20

EV to Capital Employed

4.74

EV to Sales

0.39

PEG Ratio

Dividend Yield

5.32%

ROCE (Latest)

51.18%

ROE (Latest)

44.15%

Technicals

Technical key factors

Indicator

Weekly

Monthly

MACD

Bearish

RSI

No Signal

Bollinger Bands

Mildly Bearish

Moving Averages

Bearish (Daily)

KST

Bearish

Dow Theory

No Trend

Mildly Bearish

OBV

Mildly Bearish

Technical Indicator Scale: Bearish, Mildly Bearish, Sideways, Mildly Bullish, Bullish Turned

Technical Movement

Analyse All Technical Factors

Financial Trend

Financial Trend Scorecard

Financial Trend scale:

Very Negative, Negative, Flat, Positive, Very Positive, Outstanding

4What is working for the Company

DIVIDEND PER SHARE(HY)

Highest at USD 46.53

DIVIDEND PAYOUT RATIO(Y)

Highest at 108.27%

RAW MATERIAL COST(Y)

Fallen by 1.25% (YoY

-7What is not working for the Company

OPERATING CASH FLOW(Y)

Lowest at USD 2,064 MM

ROCE(HY)

Lowest at 26.72%

INVENTORY TURNOVER RATIO(HY)

Lowest at 5.6 times

NET PROFIT(Q)

Lowest at USD 269.36 MM

Here's what is working for Best Buy Co., Inc.

Dividend per share

Highest at USD 46.53 and Grown

In each year in the last five years

MOJO Watch

Company is distributing higher dividend from profits generated

DPS (USD)

Dividend Payout Ratio

Highest at 108.27%

in the last five years

MOJO Watch

Company is distributing higher proportion of profits generated as dividend

DPR (%)

Raw Material Cost

Fallen by 1.25% (YoY)

MOJO Watch

The company's ability to pass on the cost of raw materials to customers has improved; this may lead to a rise in profit margin

Raw Material Cost as a percentage of Sales

Here's what is not working for Best Buy Co., Inc.

Operating Cash Flow

Lowest at USD 2,064 MM and Fallen

In each year in the last three years

MOJO Watch

The company's cash revenues from business operations are falling

Operating Cash Flows (USD MM)

Net Profit

Lowest at USD 269.36 MM

in the last five periods

MOJO Watch

Near term Net Profit trend is negative

Net Profit (USD MM)

Inventory Turnover Ratio

Lowest at 5.6 times

in the last five Semi-Annual periods

MOJO Watch

Company's pace of selling inventory has slowed

Inventory Turnover Ratio