Best Buy (BBY) Outpaces Stock Market Gains: What You Should Know

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This story originally appeared on Zacks

Best Buy (BBY) closed the most recent trading day at $134.93, moving +1.94% from the previous trading session. This move outpaced the S&P 500’s daily gain of 0.39%. Elsewhere, the Dow gained 0.15%, while the tech-heavy Nasdaq lost 0.03%.

– Zacks

Heading into today, shares of the consumer electronics retailer had gained 14.49% over the past month, outpacing the Retail-Wholesale sector’s gain of 4.26% and the S&P 500’s gain of 4.82% in that time.

BBY will be looking to display strength as it nears its next earnings release, which is expected to be November 23, 2021. The company is expected to report EPS of $1.91, down 7.28% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $11.6 billion, down 2.16% from the year-ago period.

BBY’s full-year Zacks Consensus Estimates are calling for earnings of $10.04 per share and revenue of $51.87 billion. These results would represent year-over-year changes of +26.93% and +9.74%, respectively.

Investors might also notice recent changes to analyst estimates for BBY. These recent revisions tend to reflect the evolving nature of short-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company’s business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 0.53% higher. BBY is currently a Zacks Rank #2 (Buy).

Investors should also note BBY’s current valuation metrics, including its Forward P/E ratio of 13.19. This represents a premium compared to its industry’s average Forward P/E of 9.62.

Also, we should mention that BBY has a PEG ratio of 1.74. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company’s expected earnings growth rate. The Retail – Consumer Electronics industry currently had an average PEG ratio of 1 as of yesterday’s close.

The Retail – Consumer Electronics industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 31, putting it in the top 13% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.

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