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Fundamental analysis: Best Buy Co., Inc. (BBY)

Awarener score: 8.0

Conclusion

The higher the Awarener score, the more bang you get for the buck. It measures how much genuine funds the company generates for the stock price paid (Excellent), the business stability (Good) and growth (Lacking), and the company's inclination to return cash to the stockholders (Superb).

Note: All scores range from 1 (worst) to 10 (best). Conclusions are updated daily with closing stock prices and new reported quarterly financial statements.

Revenue score: 5.5

  • Business has been slightly shrinking. It's been almost average when measured against peer companies.
  • Best Buy Co., Inc. business trend stability is good. The higher the stability, the lower the risk. It looks somewhat better than rivals.

Margins score: 5.7

  • BBY profit margins -on goods and services sold- are usually meagre. They stand worse than most rival companies.
  • Business profit on sales tends to be good. It's almost average when measured against competitors.
  • Profits on sales made -available to repay debt and purchase properties- are usually hardly sufficient. They remain close to average when compared to peers.
  • Earnings -before income taxes and interests on loans taken- tend to be sufficient in relation to total revenues. They're still slightly worse than similar companies.
  • Profits -before income taxes- are usually sufficient considering total sales, and remain similar to rivals.
  • Total net profit tends to be sufficient when confronted to sales. Company stands similar to comparable firms.

Growth score: 4.4

  • Best Buy Co., Inc. profit growth -on goods and services sold- has been almost stagnant. It's been lacking compared to competitors.
  • In recent years, earnings -on operations- have been growing at a very low step, which has been somewhat worse than comparable firms.
  • Profits -available to repay debt and purchase properties- have been growing at a very low pace, which compares below average when measured against peer enterprises.
  • Earnings -before income taxes and interests on loans taken- have been growing at a slow tempo. It turns to be close to average when compared to similar stocks.
  • In past years, profits -before income taxes- grew at a very low speed. It was somewhat worse than rivals.
  • In the previous years, growth on total net profit has been low, and almost average when measured against peer companies.
  • Earnings per share have grown at a normal rhythm in past years. It's been rather normal in relation to industry peers.

Miscellaneous score: 5.0

  • BBY had to pay some income taxes in relation to profits made in the past years. It's been somewhat better than peers.
  • The company does not report R&D expenses. It's meaningless to measure in relation to competitors.
  • We have insufficient data to estimate how effective is research and development effort. It stands unknown against rival companies.

Profitability score: 9.8

  • Best Buy Co., Inc. usually gets huge returns on the resources it controls. It proves more than average in relation to peer firms.
  • The company normally gets huge proceeds -on the resources directly invested in the business-. They remain impressive in relation to similar companies.
  • Profitability -in relation to owned resources- is usually paramount. It ranks top tier when measured against competitors.
  • In the past, got excellent returns -on the tangible resources it controls-. This metric is usually related to the industry in which operates and combines profitability versus reinvestment needs. It's more than average in relation to comparable enterprises.

Usage of Funds score: 6.9

  • BBY usually uses a significant portion of genuine funds generated to buy or replace property, plant, or equipment. The need for reinvestments is abundant. It stands more than average in relation to rival firms.
  • The company is usually replacing the property, plant, and equipment that gets old, keeping its operating capabilities up to date, which is almost average when measured against industry peers.
  • In the past twelve months it paid excellent dividends, considering the current stock price. It came well ranked against competitors.
  • Has increased dividend payments in the past years. Business prospects may have improved. The company has behaved lacking compared to similar firms.
  • Dividend payments usually represent a modest portion of genuine funds generation and shouldn't be at risk. Sustainability looks somewhat worse than comparable companies.
  • The company usually significantly reduces the pool of investors, resulting in fewer mouths feeding on the pie of profits. It remains excellent in relation to peer enterprises.
  • Repurchase effectiveness metric is very complex. Run again in analytical mode if you 're interested in a technical explanation. It stands excellent in relation to rivals.
  • The company uses somewhat more funds to reward investors than it can genuinely generate, so some part of them is paid out of existing cash or by borrowing money, both of which will eventually reach a limit. Either business somewhat improves, or rewards will probably not be sustained at this pace. It still looks weak when measured against competitors.

Balance Sheet score: 6.1

  • Best Buy Co., Inc. intangible assets (like brands and goodwill) represent a portion of resources controlled, according to accounting books. There could be difficulties in liquidating them if the company ever gets in financial distress. It happens to be below average when measured against peer companies.
  • The company has somewhat lower short-term resources than short-term obligations. Unless it's part of the business model, there might some liquidity concerns. It turns to be a disappointment compared to similar firms.
  • A significant part of resources controlled were provided for with financial debt. Creditors have almost as many claims on the company as shareholders. It remains slightly better than rival firms.
  • Controlled resources can be made into cash within reason, which is quite good for liquidity. It looks similar to rivals.
  • For every dollar of short-term obligations, the company has few cents of cash and short-term receivables. It's in a very weak position compared to peer firms.
  • For every dollar of short-term obligations, the company has very few cents of cash and equivalents, which is mediocre against similar enterprises.
  • Usually, sales are mostly on cash. It still ranks encouraging in relation to peers.
  • Normally has approximately somewhat more than two months of sales worth in inventory. It comes up as in good shape compared to competitors.
  • On average, it takes less than three months from the purchase to charging customers. It happens to be better than most peers.
  • On average pays suppliers two months after the purchase. It ranks similar to industry peers.
  • The company pays its suppliers less than one month before charging its customers, so there's little money invested in working capital. It's in good shape compared to similar companies.
  • Net interest expenses consume a non-significant portion of usual business earnings, and are therefore extremely easily to bear. It stands better than most rival firms.
  • Business earnings have usually been very good when measured against loans taken. Cutting back reinvesting in the business, it could take less than two years to repay the obligations with current profitability. It ranks top tier when measured against comparable enterprises.
  • Revenues are very good in relation to property, plant, and equipment required to operate. This metric is likely dependent on the industry the company operates in. Low property, plant, and equipment requirements allows the company to keep more money to reward stockholders in the long run. It looks impressive in relation to similar firms.
  • Resource exploitation is huge considering yearly sales, which is great. This metric is normally tied to the industry where the firm belongs. It's still top-notch against peer companies.

Valuation score: 7.3

  • Best Buy Co., Inc. looks cheap in relation to profits and financial position. It happens to be more than average in relation to competitors.
  • Price-to-Tangible-Book-Value is a fairly complex metric. Run again in analytical mode if you're interested in a technical explanation. It remains in a weak position compared to peers.
  • In the past twelve months, the company generated excellent free funds in relation to the stock price, which stands better than most similar companies.
  • The company usually generates much more genuine funds to cover up for its business needs. Surplus cash may be used to repay loans, to eventually buy new businesses, or to reward investors. Considering the financial position and stock price, at the current price the share might be very interesting. It's still great when measured against industry firms.
  • In the past twelve months, the company has significantly rewarded investors, considering both dividends and share on the pie of earnings. It came up impressive in relation to peer ventures.
  • The company is indebted, it should focus on loan repayment. It looks slightly better than similar enterprises.
  • Considering the past twelve months, traditional Price-to-Earnings relation looks cheap. Possible reasons are that the market might be betting current earnings will be hard to sustain through time, or that the company has very high fund needs, or a weak financial position, among others. If that isn't the case, the current stock price might be attractive. It ranks similar to peer companies.
  • Comparing the current stock price with the past twelve-months revenues gives a very low relationship. One common cause includes profitability being very poor. It looks rather normal in relation to rival firms.
  • The relation between the stock price and accounting book value is really high, which may be good or bad depending on context. Run again in analytic mode if you want to dig deeper. The company remains mediocre against peer firms.
  • In the past twelve months, the operating business earned good money when compared to the current stock price and financial position. It happens to be more than average in relation to industry peers.
  • In an alternate metric of bang for the buck, the company has usually shown an excellent earnings power ability when measured against the current stock price and financial position. Further analysis is recommended, as the stock might currently be undervalued. It's still excellent in relation to peer companies.

Total score: 6.3


BBY logos

Company at a glance: Best Buy Co., Inc. (BBY)

Sector, industry: Consumer Cyclical, Specialty Retail

Market Cap: 15.48 billions

Revenues TTM: 49.25 billions

Best Buy Co., Inc. retails technology products in the United States and Canada. The company operates in two segments, Domestic and International. Its stores provide computing products, such as desktops, notebooks, and peripherals; mobile phones comprising related mobile network carrier commissions; networking products; tablets covering e-readers; smartwatches; and consumer electronics consisting of digital imaging, health and fitness, home theater, portable audio comprising headphones and portable speakers, and smart home products. The company's stores also offer appliances, such as dishwashers, laundry, ovens, refrigerators, blenders, coffee makers, and vacuums; entertainment products consisting of drones, peripherals, movies, music, and toys, as well as gaming hardware and software, and virtual reality and other software products; and other products, such as baby, food and beverage, luggage, outdoor living, and sporting goods. In addition, it provides consultation, delivery, design, health-related, installation, memberships, repair, set-up, technical support, and warranty-related services. The company offers its products through stores and websites under the Best Buy, Best Buy Ads, Best Buy Business, Best Buy Health, CST, Current Health, Geek Squad, Lively, Magnolia, Best Buy Mobile, Pacific Kitchen, Home, and Yardbird, as well as domain names bestbuy.com, currenthealth.com, lively.com, yardbird.com, and bestbuy.ca. As of January 30, 2022, it had 1,144 stores. The company was formerly known as Sound of Music, Inc. The company was incorporated in 1966 and is headquartered in Richfield, Minnesota.

Awarener score: 8.0

Conclusion

The higher the Awarener score, the more bang you get for the buck. It measures how much genuine funds the company generates for the stock price paid (Excellent), the business stability (Good) and growth (Lacking), and the company's inclination to return cash to the stockholders (Superb).