Best Buy Co., Inc. ($BBY) Earnings (Q2 FY23)

 Best Buy Co., Inc. ($BBY) Earnings and Opinion:


Best Buy is a company in the Consumer Cyclical sector and operates in the Specialty Retail industry. The company retails technology products in the United States and Canada. Best Buy was incorporated in 1966 and is currently headquartered in Richfield, Minnesota. The company made its debut on the stock market in 1985.

Best Buy Earnings Results:

  • Revenues of $10.33B beating expectations of $10.29B
  • Gross Profit of $2.29B beating expectations of $2.27B
  • Operating Income of $427M beating expectations of $381M
  • Adjusted EPS of $1.54 beating expectations of $1.29
  • Operating Margin guidance of 4.0% missing expectations of $4.1%
Opinion:
Best Buy traded a tiny bit higher during todays trading session, after reporting earnings before the market opened this morning. The stock failed to gain direction after the earnings report, as it was a solid earnings report, the retail sector has been slammed pretty hard in recent weeks. An interesting fact about the company, is that they were the first company this quarter to have inventories at levels below Consensus estimates. They were able to get rid of inventory effectively and efficiently and not have too much on hand at the end of the quarter. Both the EPS and Operating Income had solid beats on estimates, which is a sign of strength in profitability. Overall, I think this quarter was solid compared to many of the competitors in the Retail sector. As far as valuation goes, at Q2 the P/E ratio sat a 9.97, which is below industry average. P/S was at 0.40, which was lower than industry average of 1.64. The ROE is at a solid metric for profitability and the growth looks to drop next year, but pick back up after that. Current ratio is at 0.96, which even though it is below 1, it is still at an attainable level. Cash is heavily outweighed by debt. In my opinion, this stock is near fair value right now. Best Buy had a solid second quarter, compared to competitors. I like the direction of the company and that they are still able to operate effectively in these tough economic conditions. I think the upside is limited, so I am going to pass because other opportunities pose as better options. I think this is a safe pick though, and you could see some sort of return on your investment with Best Buy.


*Information from Yahoo Finance, CSI Market, CMLVIZ, Consensus Gurus, Motley Fool

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