Best Buy (BBY) Stock Sinks As Market Gains: What You Should Know

Best Buy (BBY) closed the most recent trading day at $80.30, moving -0.15% from the previous trading session. This move lagged the S&P 500's daily gain of 1.73%. At the same time, the Dow added 1.27%, and the tech-heavy Nasdaq gained 0.06%.

Heading into today, shares of the consumer electronics retailer had gained 13.05% over the past month, outpacing the Retail-Wholesale sector's gain of 12.18% and the S&P 500's gain of 9.34% in that time.

Best Buy will be looking to display strength as it nears its next earnings release, which is expected to be August 30, 2022. The company is expected to report EPS of $1.41, down 52.68% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $10.24 billion, down 13.59% from the prior-year quarter.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $6.69 per share and revenue of $46.75 billion. These totals would mark changes of -33.17% and -9.69%, respectively, from last year.

Any recent changes to analyst estimates for Best Buy should also be noted by investors. These revisions typically reflect the latest short-term business trends, which can change frequently. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Our research shows that these estimate changes are directly correlated with near-term stock prices. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 23.02% lower. Best Buy currently has a Zacks Rank of #5 (Strong Sell).

In terms of valuation, Best Buy is currently trading at a Forward P/E ratio of 12.02. Its industry sports an average Forward P/E of 14.36, so we one might conclude that Best Buy is trading at a discount comparatively.

Also, we should mention that BBY has a PEG ratio of 0.68. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Retail - Consumer Electronics industry currently had an average PEG ratio of 0.71 as of yesterday's close.

The Retail - Consumer Electronics industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 242, putting it in the bottom 4% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow BBY in the coming trading sessions, be sure to utilize Zacks.com.

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