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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Best Buy Co., Inc. (XNYS:BBY) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
BBY
Name:
Best Buy Co., Inc. (XNYS:BBY)
Sector:
- 56000.00K
Industry:
Specialty Retail
CEO:
Ms. Corie Barry
Total Employees:
105,000
Our Technological Advancement Rating
Our Rating:
D
Technological advancement compared to industry is -280.34% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF BEST BUY CO., INC.(BBY) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND SPECIALTY RETAIL INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
71.14
One Month Price Target:
$71.74
Six Month Price Target :
$74.75
Likely Price in One Year's Time:
Ticker:
$78.37
Likely Trading Range Today Under (Normal Volatility)
$70.82
Price Upper limit ($) :
$71.48
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$67.13
This week:
$62.18
This month :
$53.22
Other Primary facts
Market Cap:
16.07B
Market Cap Classification:
Mid Cap
Number of Shares
IPO Date:
225.17M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
16.79%
-15.25%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$89.74
$81.26
$52.54
$61.02
Medium risk (<10%) entry points
Buy Call
Sell Call
$78.50
Buy Put:
Sell Put:
$76.69
$63.75
$65.59
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
BBY
Sharpe Ratio:
0.19%
Comparison:
BBY, is amongst the top 40% stocks with lowest risk-adjusted returns
Sharpe ratio is -93.45% lower than the industry
& is -91.79% lower than the market/S&P 500 average
Average Returns/Yield of
BBY
Daily returns:
0.01%
Weekly returns:
0.07%
Monthly returns:
0.28%
Yearly returns:
34.92%
Comparison of returns:
Average annual returns/yield (last 3 years) is -90.38% below industry average
Classification:
BBY, is amongst the top 40% lowest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.23
Statistical test of Returns:
BBY has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
2.75%
Weekly Volatility:
6.15%
Monthly Volatility:
12.29%
Yearly Volatility:
42.58%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
3.41%
Volatility in last five trading days has been 24.15% above long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-5.63%
Weekly VaR:
-12.59%
Monthly VaR:
-25.18%
How Much Can the price of
BBY
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-22%
Worst case (decline):
-87.24%
This translates to price declining to:
$55.41
This translates to price declining to:
$9.08
Severe Crash Probability
Risk of crash in next 6/12 months: Low (<25%)
What is Value at Risk (VaR)?
Risk Fundamentals
BBY is a 77.75% riskier investment compared to the market/S&P 500 & is 52.28% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -33.82% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
BBY
Beta in relation to market/S&P 500--1.51
Expected beta in 1 year's time:
0.849
Expected beta in 3 year's time:
1.201
Unlevered (debt free) Beta:
0.929
Beta in relation to Nasdaq (XNAS):
0.921
Beta in relation to all global stocks::
0.804
Beta Comparison & Analysis
Beta of competitors/peers::
1.566
Beta is -3.47% lower than peers
Average Industry Beta:
1.43
Beta is 5.73% above industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
45.03%
Sustainable growth rate is 35.61% above industry average
Alpha provided | Alpha Analysis
Alpha provided:
-0.101
Alpha is -146.17% below industry average alpha yield
Alpha is -646% below the market average
Analysis of Cost of Capital of
BBY
Equity cost of capital:
0.135
Equity cost of capital is 4.34% above industry mean WACC
Unlevered (without debt) cost of capital:
8.30%
Before-tax cost of debt:
0.63%
After-tax cost of debt:
0.49%
Overall debt rating:
Highest AAA investment grade
Weighted average cost of capital (WACC):
0.49%
WACC is 46.61% above industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$225.48
Revenue growth rate per share of (3Y):
3.85
Annual revenue growth rate is 0.78% above the industry average
EPS:
$9.02
Expected Annual growth rate of EPS (3Y):
22.91%
Expected future EPS growth rate is -34.96% lower than the Specialty Retail industry
Free cash flow (FCF) per share:
$4.18
Balance sheet equity growth per share: 60.70%
Equity growth rate per share is 18.36% higher than the industry
Debt per share
$14.26
EBITDA per share
$16.05
Valuation Analysis Today of
BBY
P/E Ratio:
9.52
P/E Ratio of Competitors/Peers:
9
P/E ratio is 5.81% higher than main peers & is -55.72% lower than the industry
Stock price/value with industry average P/E ratio: $194.02
BBY is -63.33% undervalued if valued using industry average P/E ratio
Share value as per dividend discount (DDM) model: $63.43
Present value of the expected future dividends only: $46.62
P/S (Price to Sales ratio):
0.32
Price to sales ratio is -92.24% below the industry mean
P/B (Price to book value ratio):
3.85
Price to free cash flow: 17.00
Price to free cash flow ratio is -31.76% lower than the industry
Net income growth rate (3Y):
108.06%
Net income growth rate is -122.83% lower than the industry average net income growth rate
Dividend Analysis
Dividend payout rate: 7.95%
Dividend yeild: 4.44%
Previous Dividend: $0.88
Previous adjusted dividend: $0.88
Previous Dividend: $3.16
Expected next dividend best case: $0.99
Expected next dividend worst case: $0.77
Average dividend payment (long-term): $0.66
Average dividend increase/decrease (growth rate) % per period: 6.30%
Expected next dividend payment date: 10/03/2022
Expected next dividend record date: 09/12/2022
-
Previous dividend payment date: 07/05/2022
Previous dividend record date: 14/06/2022
-
Dividend History:
2022-06-13--$0.88
2021-12-13--$0.70
2021-06-16--$0.70
2022-03-23--$0.88
2021-09-13--$0.70
2021-03-17--$0.70
Dividend growth rate is -2919.41% lower than the industry average
In-depth Debt & Leverage Analysis
Debt to equity ratio:
77.25%
Net debt to equity ratio:
-6.90%
Debt to assets ratio:
18.14%
Net debt to assets ratio:
-1.62%
Debt-to-asset ratio is -74.93% below industry average
Ability to repay debt:
Interest coverage ratio:
144.56
Interest coverage ratio is 483.70% more than industry average
Looking forward:
Debt growth rate:
106.68%
Annual debt growth is 52% higher than industry average debt growth rate
Debt repayment rate in last quarter: 0.00%
Analysis of Key Statistics
Correlation of price movement with the market:
0.658
Statistical significance of correlation:
BBY has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.475
Stock price is 38.53% more correlated with the market, compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.475
Correlation of price movement with Nasdaq (^IXIC):
-0.019
Covariance of price movement with the market:
-0.03
Kurtosis
5.628
Returns have moderate fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are more probable, compared to assets with normally distributed returns
Skewness of returns:
-0.074
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
BBY
Gross Profit Margin Ratio:
90%
Operating Profit Margin Ratio:
5.38%
Operating profit margin is -17.23% lower than the industry
Net Profit Margin Ratio:
90%
Effective Tax Rate:
18.90%
Effective tax rate is -16.20% lower than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
52.91%
Return on equity (ROE) is 3619.41% higher than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
12.43%
Return on assets (ROA) is 33.55% higher than the industry
Financial Leverage:
1.2x
Current Ratio:
1.17
Current ratio is -38.09% below industry average
Cash Conversion Cycle (days):
-49.7
Cash conversion cycle is -176.85% below industry average
The remaining useful life of property plant & equipment is: 5.8 years
Stock based compensation to net income ratio:
1.68%
In-depth Efficiency Analysis
Revenue generated per employee:
483.5K
Each employee generates -34% less revenue than industry average revenue per employee
EBITDA generated per employee:
34.4K
Each employee generates -86% less EBITDA than industry average revenue per employee
Profit generated per employee:
21.0K
Each employee generates -86% less net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
- 0.5K
Each employee generates -101% less free cash flow than industry average revenue per employee
Assets/Capital per employee
61.3K
Each employee generates -101% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
BBY
TATA MOTORS LIMITED (XNYS:TTM)
Carnival Corp (XNYS:CCL)
Magna International Inc. (XNYS:MGA)
YUM CHINA HOLDINGS, INC. (XNYS:YUMC)
LB Group Co., Ltd. (XSHE:002601)
MGM RESORTS INTERNATIONAL (XNYS:MGM)
V.F. CORPORATION (XNYS:VFC)
ROYAL CARIBBEAN CRUISES LTD. (XNYS:RCL)
LAS VEGAS SANDS CORP. (XNYS:LVS)
Current Analyst Ratings
Strong buy�8%
Buy�21%
Hold�67%
Sell�0%
Strong sell�8%
Overall analyst sentiment is: Hold
Income Statement
Period:
TTM
Date:
4/30/22
Revenue:
50.77B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
39.49B
11.28B
-
-
8.54B
-
-
8.54B
-
25.00M
877.00M
3.61B
2.73B
2.20B
2.71B
512.00M
2.20B
Statement of Cash Flow
Date:
Period:
216.00M
Differed Income Tax :
-
Stock Based Compensation :
37.00M
Change in Working Capital :
- 707000.00K
Accounts Receivables:
-
Other Working Capital:
113.00M
Other Non-Cash Items:
- 36000.00K
Net Cash Provided by Operating Activities:
105.00M
Investments in PP&E:
- 161000.00K
Net Acquisitions:
-
Purchases of Investments:
- 90000.00K
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
5/1/21
2022
Q1
4.28B
60.00M
4.34B
850.00M
5.72B
359.00M
11.27B
4.80B
986.00M
281.00M
-
-
374.00M
6.44B
-
17.71B
6.36B
779.00M
-
1.03B
1.47B
9.64B
3.21B
694.00M
3.91B
-
13.55B
25.00M
3.76B
338.0M
33.00M
May 1, 2021 at 6:00:00 AM
48.03B
4.16B
17.71B
-
3.99B
- 287000.0K
-
- 2000.00K
- 253000.00K
-
-
- 927000.00K
- 175000.00K
13.00M
- 1089000.00K
5.00M
- 1232000.00K
4.39B
5.63B
105.00M
- 161000.00K
- 56000.00K
Our Proprietary Portfolio Rating
Our Rating:
D
Price Forecast/Expected Price in Next 5 Years of
BBY
2023
2024
2025
2026
2027
$100.33
$110.52
$121.75
$134.12
$147.74