NEW YORK (
-- Best Buy
) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its revenue growth, attractive valuation levels and good cash flow from operations. We feel these strengths outweigh the fact that the company has had sub par growth in net income.
Highlights from the ratings report include:
- BBY's revenue growth has slightly outpaced the industry average of 0.5%. Since the same quarter one year prior, revenues slightly increased by 1.8%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- Net operating cash flow has significantly increased by 136.44% to $1,090.00 million when compared to the same quarter last year. In addition, BEST BUY CO INC has also vastly surpassed the industry average cash flow growth rate of 36.45%.
- BEST BUY CO INC's earnings per share declined by 22.2% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, BEST BUY CO INC increased its bottom line by earning $3.12 versus $3.08 in the prior year. This year, the market expects an improvement in earnings ($3.36 versus $3.12).
- Despite currently having a low debt-to-equity ratio of 0.40, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 0.41 is very low and demonstrates very weak liquidity.
Best Buy Co., Inc. operates as a retailer of consumer electronics, home office products, entertainment products, appliances, and related services primarily in the United States, Europe, Canada, and China. The company has a P/E ratio of 9.6, above the average retail industry P/E ratio of nine and below the S&P 500 P/E ratio of 17.7. Best Buy has a market cap of $8.88 billion and is part of the
industry. Shares are up 13.9% year to date as of the close of trading on Thursday.
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-- Written by a member of TheStreet RatingsStaff