Best Buy Co Inc

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BBY : NYSE : Services
$39.50 | %
Today's Range: 0.00 - 0.00
Avg. Daily Volume: 5,220,200
08/24/16 - 4:00 PM ET

Financial Analysis


BEST BUY CO INC's gross profit margin for the second quarter of its fiscal year 2016 is essentially unchanged when compared to the same period a year ago. The company managed to grow both sales and net income at a faster pace than the average competitor in its industry this quarter as compared to the same quarter a year ago. BEST BUY CO INC has weak liquidity. Currently, the Quick Ratio is 0.64 which shows a lack of ability to cover short-term cash needs. The company's liquidity has decreased from the same period last year.

During the same period, stockholders' equity ("net worth") has decreased by 6.55% from the same quarter last year. Overall, the key liquidity measurements indicate that the company is in a position in which financial difficulties could develop in the future.

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Income Statement Q2 FY16 Q2 FY15
Net Sales ($mil)8533.08528.0
EBITDA ($mil)455.0441.0
EBIT ($mil)290.0278.0
Net Income ($mil)198.0164.0


Balance Sheet Q2 FY16 Q2 FY15
Cash & Equiv. ($mil)3451.03679.0
Total Assets ($mil)13254.013566.0
Total Debt ($mil)1384.01609.0
Equity ($mil)4319.04622.0


Profitability Q2 FY16 Q2 FY15
Gross Profit Margin26.126.36
EBITDA Margin5.335.17
Operating Margin3.43.26
Sales Turnover2.972.97
Return on Assets7.776.77
Return on Equity23.4718.19
Debt Q2 FY16 Q2 FY15
Current Ratio1.431.5
Debt/Capital0.240.26
Interest Expense18.020.0
Interest Coverage16.1113.9


Share Data Q2 FY16 Q2 FY15
Shares outstanding (mil)324.0344.26
Div / share0.280.23
EPS0.560.46
Book value / share13.3313.43
Institutional Own % n/a n/a
Avg Daily Volume5350558.04832453.0

Valuation


BUY. BEST BUY CO INC's P/E ratio indicates a significant discount compared to an average of 23.05 for the Specialty Retail industry and a significant discount compared to the S&P 500 average of 25.30. To use another comparison, its price-to-book ratio of 2.94 indicates valuation on par with the S&P 500 average of 2.83 and a significant discount versus the industry average of 13.19. The price-to-sales ratio is well below both the S&P 500 average and the industry average, indicating a discount. Upon assessment of these and other key valuation criteria, BEST BUY CO INC proves to trade at a discount to investment alternatives within the industry.


Price/Earnings
1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
BBY 13.03 Peers 23.05   BBY 5.48 Peers 15.69

Discount. A lower P/E ratio than its peers can signify a less expensive stock or lower growth expectations.

BBY is trading at a significant discount to its peers.

 

Discount. The P/CF ratio, a stock’s price divided by the company's cash flow from operations, is useful for comparing companies with different capital requirements or financing structures.

BBY is trading at a significant discount to its peers.

 
Price/Projected
Earnings
1 2 3 4 5
premium   discount
  Price to
Earnings/Growth
1 2 3 4 5
premium   discount
BBY 12.45 Peers 20.69   BBY 0.47 Peers 2.14

Discount. A lower price-to-projected earnings ratio than its peers can signify a less expensive stock or lower future growth expectations.

BBY is trading at a significant discount to its peers.

 

Discount. The PEG ratio is the stock’s P/E divided by the consensus estimate of long-term earnings growth. Faster growth can justify higher price multiples.

BBY trades at a significant discount to its peers.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
BBY 2.94 Peers 13.19   BBY 28.08 Peers -14.97

Discount. A lower price-to-book ratio makes a stock more attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet.

BBY is trading at a significant discount to its peers.

 

Higher. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios.

BBY is expected to have an earnings growth rate that significantly exceeds its peers.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
BBY 0.32 Peers 1.58   BBY -2.26 Peers 8.10

Discount. In the absence of P/E and P/B multiples, the price-to-sales ratio can display the value investors are placing on each dollar of sales.

BBY is trading at a significant discount to its industry on this measurement.

 

Lower. A sales growth rate that trails the industry implies that a company is losing market share.

BBY significantly trails its peers on the basis of sales growth

 

 

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