Best Buy Co., Inc. (BBY) Buy or Sell Stock Guide

Last updated: May 02, '18

The analysis below may be helpful to you if you have any of the following questions about BBY stock:

  • Is BBY a buy or a sell?
  • Should I sell or hold BBY stock today?
  • Is BBY a good buy / a good investment?
  • What are BBY analyst opinions, recommendations, ratings?

Here are BBY stock buy reasons/signals:

1. Best Buy has re-engineered its online sales platform, improving the user experience and adding greater ship-from-store fulfillment capabilities.

2. New television, smartphone, gaming, health/wellness, connected home and virtual reality advances can offer product cycles that drive periodic top-line outperformance.

3. Best Buy has cut more than $1 billion from its annual cost structure and is targeting another $400 million in operating income improvement through improved returns, replacements, and damages processes and operational efficiencies.

4. BBY quarterly revenue growth was 14.00%, higher than the industry and sector average revenue growth (1.55% and 4.93%, respectively).

5. BBY profitability is improving. The YoY profit margin change was 0.85pp.

6. BBY forward dividend yield is 2.34%, higher than the industry (0.76%) and sector (0.60%) forward dividend yields.

Here are BBY stock sell reasons/signals:

1. Online retailers, mass merchants, warehouse clubs, and consumer product OEMs all compete for market share, resulting in aggressive industry price competition and constraining Best Buy's longer-term margin expansion opportunities.

2. Entertainment sales remain sluggish. Replacement categories in Best Buy's stores are often slower-turning, lower-margin products.

3. Warranty sales have historically been a disproportionate contributor to margins. If consumers continue to gravitate to online retailers or vendor direct-sales platforms, declining warranty attachment rates will weigh on margins.

4. BBY stock price ($75.33) is close to the 52-week high ($77.82). Perhaps now is a good time to sell?

5. BBY average analyst price target ($66.26) is below its current price ($75.33).

6. BBY short share of float is 17.04%. The stock is much more frequently shorted than the average industry, sector or S&P 500 stock.

7. BBY short interest (days to cover the shorts) ratio is 10.33. The stock garners more short interest than the average industry, sector or S&P 500 stock.

What are your thoughts on BBY?

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