Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.
NEW YORK (
-- Best Buy
) has been reiterated by TheStreet Ratings as a hold with a ratings score of C- . The company's strongest point has been its a solid financial position based on a variety of debt and liquidity measures that we have looked at. At the same time, however, we also find weaknesses including deteriorating net income, disappointing return on equity and poor profit margins.
- ACTIVE STOCK TRADERS: Get trading ideas for stocks under $10 for less than $6/week. Start with a 14-Day Free Trial.
Highlights from the ratings report include:
- BBY, with its decline in revenue, underperformed when compared the industry average of 12.5%. Since the same quarter one year prior, revenues slightly dropped by 7.0%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- BEST BUY CO INC has exprienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has reported a trend of declining earnings per share over the past two years. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, BEST BUY CO INC swung to a loss, reporting -$3.17 versus $3.12 in the prior year. This year, the market expects an improvement in earnings ($2.90 versus -$3.17).
- Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 41.77%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 91.48% compared to the year-earlier quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
- Net operating cash flow has significantly decreased to -$601.00 million or 382.15% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Specialty Retail industry. The net income has significantly decreased by 93.2% when compared to the same quarter one year ago, falling from $177.00 million to $12.00 million.
Best Buy Co., Inc. operates as a retailer of consumer electronics, computing and mobile phone products, entertainment products, appliances, and related services primarily in the United States, Europe, Canada, and China. Best Buy has a market cap of $5.04 billion and is part of the services sector and retail industry. The company has a P/E ratio of -5.2, below the S&P 500 P/E ratio of 17.7. Shares are down 36% year to date as of the close of trading on Tuesday.
You can view the full
or get investment ideas from our
--Written by a member of TheStreet Ratings Staff.
FREE from Real Money's Jim Cramer: Winners and Losers Election 2012 - Steps to take NOW so you can profit no matter who is in charge!
Free Download Now