RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Best Buy Co., Inc. (XNYS:BBY) InDepth 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/LONGTERM 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.
RiskAdjusted returns (Sharpe Ratio) of
BBY
Sharpe Ratio:
0.19%
Comparison:
BBY, is amongst the top 40% stocks with lowest riskadjusted 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 TTest 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 longterm 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 5001.51
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%
Beforetax cost of debt:
0.63%
Aftertax 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 PerShare 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 (longterm): $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:
20220613$0.88
20211213$0.70
20210616$0.70
20220323$0.88
20210913$0.70
20210317$0.70
Dividend growth rate is 2919.41% lower than the industry average
Indepth 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%
Debttoasset 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 fattails (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%
Indepth 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 NonCurrent Assets:
Total NonCurrent Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other NonCurrent 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 NonCash 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