Best Buy Co., Inc.
Best Buy Co., Inc. Fundamental Analysis
Best Buy Co., Inc. (BBY) shows moderate financial fundamentals with a PE ratio of 12.34, profit margin of 2.56%, and ROE of 38.54%. The company generates $41.5B in annual revenue with weak year-over-year growth of -4.43%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 38.0/100 based on profitability, valuation, growth, and balance sheet metrics. The F grade reflects weak fundamentals and significant financial concerns.
Fundamental Health Score
We analyze BBY's fundamental strength across five key dimensions:
Efficiency Score
WeakBBY struggles to generate sufficient returns from assets.
Valuation Score
ExcellentBBY trades at attractive valuation levels.
Growth Score
WeakBBY faces weak or negative growth trends.
Financial Health Score
ModerateBBY shows balanced financial health with some risks.
Profitability Score
ModerateBBY maintains healthy but balanced margins.
Key Financial Metrics
Is BBY Expensive or Cheap?
P/E Ratio
BBY trades at 12.34 times earnings. This suggests potential undervaluation.
PEG Ratio
When adjusting for growth, BBY's PEG of 0.19 indicates potential undervaluation.
Price to Book
The market values Best Buy Co., Inc. at 4.45 times its book value. This suggests the stock is fully valued or overvalued on an asset basis.
EV/EBITDA
Enterprise value stands at 5.15 times EBITDA. This is generally considered low.
How Well Does BBY Make Money?
Net Profit Margin
For every $100 in sales, Best Buy Co., Inc. keeps $2.56 as profit after all expenses.
Operating Margin
Core operations generate 3.33 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $38.54 in profit for every $100 of shareholder equity.
ROA
Best Buy Co., Inc. generates $7.29 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Best Buy Co., Inc. generates limited operating cash flow of $1.95B, signaling weaker underlying cash strength.
Free Cash Flow
Best Buy Co., Inc. produces free cash flow of $1.25B, offering steady but limited capital for shareholder returns and expansion.
FCF Per Share
Each share generates $5.96 in free cash annually.
FCF Yield
BBY converts 9.58% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
12.34
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
0.19
vs 25 benchmark
P/B Ratio
Price to book value ratio
4.45
vs 25 benchmark
P/S Ratio
Price to sales ratio
0.31
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
1.39
vs 25 benchmark
Current Ratio
Current assets to current liabilities
1.11
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.39
vs 25 benchmark
ROA
Return on assets percentage
0.07
vs 25 benchmark
ROCE
Return on capital employed
0.20
vs 25 benchmark
How BBY Stacks Against Its Sector Peers
| Metric | BBY Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 12.34 | 23.49 | Better (Cheaper) |
| ROE | 38.54% | 1160.00% | Weak |
| Net Margin | 2.56% | 672.00% | Weak |
| Debt/Equity | 1.39 | 0.73 | Weak (High Leverage) |
| Current Ratio | 1.11 | 2.56 | Neutral |
| ROA | 7.29% | -8277.00% (disorted) | Weak |
BBY outperforms its industry in 1 out of 6 key metrics, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Best Buy Co., Inc.'s 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
17.14%
Industry Style: Cyclical, Growth, Discretionary
High GrowthEPS CAGR
-25.95%
Industry Style: Cyclical, Growth, Discretionary
DecliningFCF CAGR
0.68%
Industry Style: Cyclical, Growth, Discretionary
Growing