BBY

Best Buy Co. Inc.

Consumer


Presented:08/12/2024
Price:$81.20
Cap:$17.52B
Current Price:$97.57
Cap:$20.95B

Presented

Date08/12/2024
Price$81.20
Market Cap$17.52B
Ent Value$18.45B
P/E Ratio14.22x
Book Value$14.26
Div Yield4.58%
Shares O/S215.71M
Ave Daily Vol3,484,141
Short Int8.04%

Current

Price$97.57
Market Cap$20.95B
Best Buy Co., Inc. engages in the provision of consumer technology products and services. It operates through two business segments: Domestic and International. The Domestic segment includes operations in all states, districts, and territories of the U.S., operating under various brand names, including Best Buy, Best Buy Mobile, Geek Squad, Magnolia Audio Video, Napster, and Pacific Sales. The International segment is made up of all operations outside the U.S. and its territories, including Canada, Europe, China, Mexico, and Turkey. It also markets its products under the brand names: Best Buy, bestbuy.com, Best Buy Direct, Best Buy Express, Best Buy Mobile, Geek Squad, GreatCall, Magnolia and Pacific Kitchen and Home. The company was founded by Richard M. Schulze in 1966 and is headquartered in Richfield, MN.

Publicly traded companies mentioned herein: Amazon.com Inc (AMZN), Best Buy Co Inc (BBY), Costco Wholesale Corp (COST), Target Corp (TGT), Walmart Inc (WMT)

Highlights

The presenter is short shares of Best Buy Co Inc (BBY), believing that recent excitement driven by the PC cycle theme is overhyped and that its core categories are all challenged. BBY trades at 13x consensus CY2025 earnings (FY2026), which is the high end of its range, because the market expects the PC cycle to drive an inflection in the weak comp trajectory. The Street also expects margins to expand going forward, though this seems unlikely to the presenter given pressures in BBY’s competitive positioning and its credit card business. Underwriting an 11x valuation on his ~$5.50 EPS forecast for next year (vs. consensus $6.73), he reaches a fair value of $60 per share, implying material downside from the current $82 share price.

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Idea Discussion

Commentor 1 - 2 weeks ago

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