Is Best Buy (BBY) a Great Value Stock Right Now?
Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Neverthe...
Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.
Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.
One company to watch right now is Best Buy (BBY). BBY is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock holds a P/E ratio of 13.92, while its industry has an average P/E of 23.65. Over the past 52 weeks, BBY's Forward P/E has been as high as 18.83 and as low as 12.43, with a median of 14.82.
Investors should also note that BBY holds a PEG ratio of 1.68. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. BBY's industry has an average PEG of 2.41 right now. Over the last 12 months, BBY's PEG has been as high as 2.33 and as low as 1.26, with a median of 1.71.
We should also highlight that BBY has a P/B ratio of 7.32. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. This company's current P/B looks solid when compared to its industry's average P/B of 12.19. Within the past 52 weeks, BBY's P/B has been as high as 8.28 and as low as 5.55, with a median of 6.89.
Finally, investors should note that BBY has a P/CF ratio of 10.12. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. BBY's P/CF compares to its industry's average P/CF of 12.02. Within the past 12 months, BBY's P/CF has been as high as 12.91 and as low as 8.96, with a median of 11.24.
Value investors will likely look at more than just these metrics, but the above data helps show that Best Buy is likely undervalued currently. And when considering the strength of its earnings outlook, BBY sticks out at as one of the market's strongest value stocks.
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