Best Buy Co Inc
BBY
Retail-Radio, Tv & Consumer Electronics Stores
Mkt Cap
$15.52BPE
12.03Debt
$1.175BCash
$1.491BEV
$15.21BFCF
$1.83BP/E Ratio
12.03Debt
$1.175BCash
$1.491BEV
$15.21BFCF
$1.83BBest Buy Co., Inc. engages in the retail of technology products in the United States and Canada. The company operates in two segments, Domestic and International. Its stores provide computing and mobile phone products, such as desktops, notebooks, and peripherals; mobile phones comprising related mobile network carrier commissions; networking products; tablets covering e-readers; smartwatches; and consumer electronics consisting of digital imaging, health and fitness products, home theater, portable audio comprising headphones and portable speakers, and smart home products. The company's stores also offer appliances, such as dishwashers, laundry, ovens, refrigerators, blenders, coffee makers, and vacuums; entertainment products consisting of drones, peripherals, movies, music, and toys, as well as gaming hardware and software, and virtual reality and other software products; and other products, such as baby, food and beverage, luggage, outdoor living, and sporting goods. In addition, it provides consultation, delivery, design, installation, memberships, repair, set-up, technical support, health-related, and warranty-related services. The company offers its products through stores and websites under the Best Buy, Best Buy Ads, Best Buy Business, Best Buy Health, Buy Mobile, CST, Current Health, Geek Squad, Lively, Magnolia, Pacific Kitchen, Home, TechLiquidators, and Yardbird brands, as well as domain names comprising bestbuy.com, currenthealth.com, lively.com, techliquidators.com, yardbird.com, and bestbuy.ca. The company was formerly known as Sound of Music, Inc. Best Buy Co., Inc. was incorporated in 1966 and is headquartered in Richfield, Minnesota.
Sector
DCF
Discounted Cash Flow Valuation of Best Buy Co Inc
Value
Growth
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Discount
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Multiple
| g\r | +10% | +11% | +12% | +13% | +14% |
|---|---|---|---|---|---|
| 0% | 10 | 9 | 8 | 8 | 7 |
| +1% | 11 | 10 | 9 | 8 | 8 |
| +2% | 13 | 11 | 10 | 9 | 8 |
| +3% | 14 | 13 | 11 | 10 | 9 |
| +4% | 17 | 14 | 12 | 11 | 10 |
| Years | 0 | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | TV |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| FCF | $1.83B | $1.918B | $2.01B | $2.106B | $2.207B | $2.313B | $2.424B | $2.541B | $2.663B | $2.791B | $2.924B | $29.24B |
| DCF | $1.668B | $1.52B | $1.385B | $1.262B | $1.15B | $1.048B | $955.2M | $870.5M | $793.2M | $722.9M | $7.229B | |
| Value | $18.6B | |||||||||||
In the chart Earnings are multiplied by this value.
Earnings Growth 9.3%
Earnings Stability 55%
Competitiveness and MOAT
High margins render the company resilient under dire circumstances, hence able to drive competitors out or acquire them. ROE and ROA measure the average flow generated by each invested dollar. Their marginal value is a forecast of future growth, and it is considered by Buffett and Munger the most important single indicator.
| Years | 01-2015 | 01-2016 | 01-2017 | 02-2018 | 02-2019 | 01-2020 | 01-2021 | 01-2022 | 01-2023 | TTM |
|---|---|---|---|---|---|---|---|---|---|---|
| Net Margin | 3.1% | 2.3% | 3.1% | 2.4% | 3.4% | 3.5% | 3.8% | 4.7% | 3.1% | 2.9% |
| ROA | 9.7% | 10% | 14% | 14% | 15% | 13% | 13% | 17% | 12% | 11% |
| ROE | 25% | 20% | 26% | 28% | 44% | 44% | 39% | 81% | 51% | 46% |
What is the average Net Margin?
The average Net Margin over the past 5 years is +3.49%.
What is the trend of Net Margin?
The trend of Net Margin over the past 5 years is +0.22%.
What is the average Return on Assets (ROA)?
The average ROA over the past 5 years is +14.1%.
What is the trend of Return on Assets (ROA)?
The trend of ROA over the past 5 years is -0.25%.
What is the average Return on Equity (ROE)?
The average ROE over the past 5 years is +47.91%.
What is the trend of Return on Equity (ROE)?
The trend of ROE over the past 5 years is +6.32%.
Safety & Stabiliy
Being debt the number one cause of investment losses and company death, the ratio Debt/FCF is of utmost importance to guarantee safety. On the other hand the Graham’s stability measures the drawdown of earnings, hence indicating the reliability of the flow generated by the company.
| Years | 01-2015 | 01-2016 | 01-2017 | 02-2018 | 02-2019 | 01-2020 | 01-2021 | 01-2022 | 01-2023 | TTM |
|---|---|---|---|---|---|---|---|---|---|---|
| Debt FCF | 1.21 | 3.16 | 0.72 | 1.31 | 0.91 | 0.71 | 0.33 | 0.49 | 1.33 | 0.64 |
| Debt Equity | 0.33 | 0.49 | 0.30 | 0.53 | 0.44 | 0.37 | 0.30 | 0.41 | 0.43 | 0.41 |
| MIN | ||||||||||
| Graham Stability | - | - | 100% | 89% | 100% | 100% | 100% | 100% | 73% | 73% |
What is the Debt/FCF?
The Debt/FCF trailing twelve month is 0.64.
What is the trend of Debt/FCF?
The trend of Debt/FCF over the past 5 years is -0.04.
What is the Graham’s Stability?
Graham’s Stability measure stands at 0.73.
Growth
Growth can be dangerous when forecasting, simply projecting the current growth is in general wrong. A company passes through multiple phases, from being young and unprofitable, to the first periods of profitability and high growth, until it arrives at a period of regime with limited growth. Identifying in which phase the company is in may help forecasting.
| Years | 01-2016 | 02-2018 | 01-2020 | 01-2022 | Trend |
|---|---|---|---|---|---|
| Revenue | 2.3% | 1.9% | 2% | -11% | 0.4% |
| Net Income | 6.8% | 7.2% | -2.7% | -42% | -9% |
| Stockholders Equity | -6.2% | -5% | -7% | -7.5% | -2% |
| FCF | 4.1% | -9.3% | -21% | -64% | -15% |
What is the 5 year Revenue CAGR?
The Revenue CAGR over the past 5 years is +1.89%.
What is the trend of Revenue growth?
The trend of Revenue growth rate over the past 5 years is +0.4%.
What is the 5 year Earnings CAGR?
The Earnings CAGR over the past 5 years is +7.25%.
What is the trend of Earnings growth?
The trend of Earnings growth rate over the past 5 years is -8.95%.
What is the 5 year Equity CAGR?
The Equity CAGR over the past 5 years is -5%.
What is the trend of Equity growth?
The trend of Equity growth rate over the past 5 years is -1.99%.
What is the 5 year FCF CAGR?
The FCF CAGR over the past 5 years is -9.26%.
What is the trend of FCF growth?
The trend of FCF growth rate over the past 5 years is -15.18%.