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Best Buy Co (BBY)
NYSE:BBY
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Best Buy Co
(NYSE:BBY)
Rating:75Outperform
Price Target:
$82.00
▲(13.04%Upside)
Positive Factors
Digital and Online Strategy
Infrastructure is complete for social content creators to establish digital storefronts on Best Buy digital properties, which is expected to spark interest in Best Buy's assortment.
Marketplace Expansion
Best Buy has surpassed initial expectations for its year-end seller count in its marketplace, signaling robust interest and opportunities for enhanced SKU breadth and high-margin commissions.
Sourcing and Supply Chain
China sourcing exposure has significantly decreased as vendors leverage alternative sourcing options, and this trend is expected to continue.
Negative Factors
Industry and Market Trends
Industry demand remains subdued and tariffs are a continuing overhang, resulting in relatively flat comps.
Sales Performance
Sales decreased 0.9% year-over-year to $8.8 billion and enterprise comparable sales decreased 0.7% year-over-year, below the Goldman Sachs estimate and consensus.
Tariff and Regulatory Impact
Tariff risk remains an overhang, resulting in lowered '25 guidance.
Best Buy Co (BBY) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$15.83B
Dividend Yield5.07%
Average Volume (3M)3.61M
Price to Earnings (P/E)18.3
Beta (1Y)1.02
Revenue Growth-3.23%
EPS Growth-28.11%
CountryUS
Employees85,000
SectorConsumer Cyclical
Sector Strength57
IndustrySpecialty Retail
Share Statistics
EPS (TTM)1.15
Shares Outstanding211,346,700
10 Day Avg. Volume5,001,616
30 Day Avg. Volume3,614,870
Financial Highlights & Ratios
PEG Ratio1.48
Price to Book (P/B)6.45
Price to Sales (P/S)0.00
P/FCF Ratio12.31
Enterprise Value/Market Cap1.53
Enterprise Value/Revenue0.14
Enterprise Value/Gross Profit2.59
Enterprise Value/Ebitda2.50
Forecast
1Y Price Target
$80.53Price Target Upside11.01% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering19
Best Buy Co Business Overview & Revenue Model
Company DescriptionBest Buy Co., Inc. is a leading retailer of consumer electronics, home office products, entertainment software, appliances, and related services. The company operates through its physical stores across the United States, Canada, and Mexico, as well as its robust e-commerce platform. Best Buy is committed to enriching its customers' lives through technology by offering a wide array of products from top brands, coupled with expert advice, service, and competitive pricing.
How the Company Makes MoneyBest Buy makes money primarily through the sale of consumer electronics and related products. Its revenue streams include sales from its physical retail locations and online platform, which together account for the majority of its income. The company also generates revenue through its services segment, which includes installation, repair, technical support, and membership programs such as Total Tech Support and Geek Squad services. Additionally, Best Buy benefits from vendor partnerships that enable it to offer exclusive products and promotions, as well as financing agreements that provide customers with flexible payment options. Key factors contributing to its earnings include strategic pricing, customer loyalty programs, and ongoing investments in enhancing its digital capabilities.
Best Buy Co Earnings Call Summary
Earnings Call Date:May 29, 2025
(Q1-2026)
| % Change Since: 1.43%|
Next Earnings Date:Sep 02, 2025
Earnings Call Sentiment Neutral
Best Buy demonstrated resilience with strong online sales growth and strategic initiatives in ads and marketplace, despite facing challenges in domestic sales and tariff impacts. Customer satisfaction showed improvement, but earnings were affected by lower investment income.Q1-2026 Updates
Positive Updates
Online Sales Growth
Online sales grew year-over-year for the second consecutive quarter, comprising nearly 32% of total domestic sales, with almost 60% of online purchases delivered or available for pickup within one day.
Strong Performance in Computing and Tablets
Best Buy delivered 6% comparable sales growth in the combined computing and tablet categories, driven by consumer demand for technology innovation and upgrades.
Best Buy Ads and Marketplace Initiatives
Strong interest from sellers with over 500 onboarded for Marketplace launch and expansion of Best Buy Ads inventory and new advertiser partnerships, expected to contribute positively to gross profit rate.
Improved Relationship Net Promoter Score
Material year-over-year improvement in Best Buy's domestic relationship net promoter score, indicating better customer satisfaction and likelihood to recommend the brand.
Negative Updates
Domestic Comparable Sales Decline
Best Buy's domestic comparable sales declined by 0.7%, driven by downturns in home theater, appliances, and drones.
China Tariff Challenges
Ongoing tariff impacts with consumer electronics supply chain disruptions. Tariffs from China affecting approximately 30% to 35% of product COGS, with certain categories subject to additional tariffs.
Lower Investment Income
Adjusted diluted earnings per share decreased by 4% due to approximately $10 million in lower investment income, resulting from a lower average cash balance and reduced short-term interest rates.
Company Guidance
In the first quarter of fiscal 2026, Best Buy reported a revenue of $8.8 billion with an adjusted operating income rate of 3.8%, which remained flat compared to the previous year. The company achieved an adjusted earnings per share of $1.15. Comparable sales in the domestic market declined by 0.7%, with notable growth of 6% in the computing and tablet categories, while home theater, appliances, and drones experienced declines. Online sales accounted for nearly 32% of total domestic sales, reflecting a year-over-year increase. Best Buy also highlighted improvements in their omnichannel operations, achieving nearly 60% of online purchases delivered or available for pickup within one day. Additionally, they reported a material improvement in their domestic relationship net promoter score. Despite ongoing inflation, consumer behavior remained steady, with customers continuing to be deal-focused and willing to invest in high-priced products when necessary or when innovation is evident. The company is adjusting its guidance, anticipating full-year comparable sales to range from a decline of 1% to an increase of 1%, with an expected adjusted operating income rate consistent with the previous year, around 4.2%.Best Buy Co Financial Statement Overview
Summary
Best Buy is experiencing a decline in revenue and net profitability, with operational efficiency under pressure. Despite these challenges, the company maintains solid cash flow generation relative to net income. However, increasing leverage and declining return on equity pose potential risks going forward.Income Statement
Best Buy's revenue has been on a declining trend from $51.76 billion in 2022 to $41.45 billion in TTM 2025, indicating a -0.19% revenue growth in the most recent period. The company maintains a stable gross profit margin around 22.6% to 23.2%. However, net profit margin decreased to 2.13% in TTM 2025 from 4.74% in 2022, reflecting a decline in profitability. EBIT and EBITDA margins also show downward trends, highlighting potential operational challenges.65
Positive
Balance Sheet
Best Buy's balance sheet shows a decreasing trend in stockholders' equity from $3.02 billion in 2022 to $2.76 billion in TTM 2025. The debt-to-equity ratio worsened to 1.47 in TTM 2025 from 1.30 in 2022, indicating an increase in leverage. However, the equity ratio remains relatively stable around 19.5%. Return on equity decreased from 81.2% in 2022 to 32.0% in TTM 2025, reflecting reduced efficiency in using equity capital.70
Positive
Cash Flow
Operating cash flow to net income ratio remains strong at 2.24 in TTM 2025, showing solid cash generation relative to net income. Free cash flow growth was -9.8% in TTM 2025, indicating challenges in maintaining cash flow levels. The free cash flow to net income ratio improved to 1.42, suggesting a better conversion of earnings into cash.75
Positive
| Breakdown | |||||
| TTM | Mar 2025 | Mar 2024 | Mar 2023 | Mar 2022 | Mar 2021 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 41.45B | 41.53B | 43.45B | 46.30B | 51.76B | 47.26B | Gross Profit |
| 9.37B | 9.38B | 9.60B | 9.91B | 11.64B | 10.57B | EBIT |
| 1.17B | 1.26B | 1.57B | 1.79B | 3.04B | 2.39B | EBITDA |
| 2.10B | 2.21B | 2.60B | 2.86B | 3.88B | 3.51B | Net Income Common Stockholders |
| 883.00M | 927.00M | 1.24B | 1.42B | 2.45B | 1.80B |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 1.15B | 1.58B | 1.45B | 1.87B | 2.94B | 5.49B | Total Assets |
| 14.13B | 14.78B | 14.97B | 15.80B | 17.50B | 19.07B | Total Debt |
| 4.05B | 4.05B | 3.98B | 3.98B | 3.94B | 4.08B | Net Debt |
| 2.90B | 2.48B | 2.54B | 2.10B | 1.00B | -1.41B | Total Liabilities |
| 11.37B | 11.97B | 11.91B | 13.01B | 14.48B | 14.48B | Stockholders Equity |
| 2.76B | 2.81B | 3.05B | 2.79B | 3.02B | 4.59B |
| Cash Flow | Free Cash Flow | ||||
| 1.26B | 1.39B | 675.00M | 894.00M | 2.52B | 4.21B | Operating Cash Flow |
| 1.98B | 2.10B | 1.47B | 1.82B | 3.25B | 4.93B | Investing Cash Flow |
| -703.00M | -704.00M | -781.00M | -962.00M | -1.37B | -788.00M | Financing Cash Flow |
| -1.36B | -1.31B | -1.14B | -1.81B | -4.30B | -876.00M |
Best Buy Co Technical Analysis
Neutral
72.54
Price Trends
67.70
Positive
74.39
Negative
82.20
Negative
Market Momentum
0.96
Negative
55.36
Neutral
78.36
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For BBY, the sentiment is Neutral. The current price of 72.54 is above the 20-day moving average (MA) of 71.03, above the 50-day MA of 67.70, and below the 200-day MA of 82.20, indicating a neutral trend. The MACD of 0.96 indicates Negative momentum. The RSI at 55.36 is Neutral, neither overbought nor oversold. The STOCH value of 78.36 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for BBY.
Best Buy Co Risk Analysis
Best Buy Co disclosed 29 risk factors in its most recent earnings report. Best Buy Co reported the most risks in the "Production" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Best Buy Co Peers Comparison
Overall Rating
UnderperformOutperform
Sector (63)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $7.72B | 7.81 | 19.00% | 3.19% | -5.90% | -11.16% | |
77 Outperform | $19.14B | 17.61 | 51.10% | 1.70% | 1.64% | 8.57% | |
77 Outperform | $24.48B | 21.22 | 15.69% | 2.12% | 4.77% | -23.73% | |
75 Outperform | $15.83B | 18.31 | 30.21% | 5.07% | -3.23% | -28.11% | |
63 Neutral | $6.94B | 11.34 | 2.80% | 4.26% | 2.68% | -24.70% | |
58 Neutral | $19.43B | ― | 19.25% | ― | -20.46% | -202.26% | |
51 Neutral | $13.49B | 61.90 | 6.62% | ― | -25.30% | 479.26% |
* Consumer Cyclical Sector Average
Performance Comparison
BBY
Best Buy Co
72.54
-11.50
-13.68%
DG
Dollar General
111.84
-9.90
-8.13%
DLTR
Dollar Tree
96.09
-10.44
-9.80%
GME
GameStop
22.14
-6.98
-23.97%
VIPS
Vipshop
14.96
0.00
0.00%
WSM
Williams-Sonoma
154.81
-3.38
-2.14%
Best Buy Co Corporate Events
Private Placements and Financing
Best Buy Co Secures New $1.25 Billion Credit Facility
Neutral
Apr 23, 2025
On April 18, 2025, Best Buy Co., Inc. entered into a new $1.25 billion five-year senior unsecured revolving credit facility agreement with U.S. Bank and a syndicate of lenders, replacing a previous facility set to expire in 2028. This new agreement, which terminates in April 2030, maintains similar terms to the previous facility and includes variable interest rates based on Best Buy’s senior unsecured debt rating, along with customary covenants and default provisions.
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.