Best Buy (BBY, US$ 65.79) forecasts estimate beating earnings for Q2
Best Buy forecast estimate-beating Q2 sales and profit on Thursday as more and more customers opted for the electronic retailer’s tech support services and continue shopping on its website and app.
The company clocked in better-than-expected profit in Q1 but shied away from disclosing full-year estimates keeping in mind the potential impact of U.S-China dispute, especially the latest imposition of tariffs on $200 billion worth Chinese goods.
Post the announcement, shares of the company rose 2.1% in premarket trade. Key highlights of the Q1 include 40 points gross profit expansion to 23.7%, 14.5% rise of domestic online sales to $1.31 billion accounting for 15.4% of total quarterly revenue, 1.1% same-store sales rise versus an expected 0.9% increase, earnings per share at $1.02 versus estimated 86 cents per share. Further, the company indicated that it expects an adjusted profit for Q2 to be in the range of $0.95 to $1 per share, and total marginal revenue rise to $9.14 billion in line with analysts’ expectations.
The tech support business has been a signature element of outgoing Chief Executive Officer Hubert Joly’s turnaround strategy that led Best Buy out of years of falling same-store sales.
An increasing share of Best Buy’s sales also comes from online, where it has been investing more to boost delivery coupled with its “click and collect” business that helps shoppers buy products online and collect them later from the stores.
BBY in downward trend: price dove below 50-day moving average on April 15, 2024
BBY moved below its 50-day moving average on April 15, 2024 date and that indicates a change from an upward trend to a downward trend. In of 43 similar past instances, the stock price decreased further within the following month. The odds of a continued downward trend are .
Technical Analysis (Indicators)
Bearish Trend Analysis
The 10-day RSI Indicator for BBY moved out of overbought territory on March 25, 2024. This could be a bearish sign for the stock. Traders may want to consider selling the stock or buying put options. Tickeron's A.I.dvisor looked at 39 similar instances where the indicator moved out of overbought territory. In of the 39 cases, the stock moved lower in the following days. This puts the odds of a move lower at .
The Momentum Indicator moved below the 0 level on April 10, 2024. You may want to consider selling the stock, shorting the stock, or exploring put options on BBY as a result. In of 91 cases where the Momentum Indicator fell below 0, the stock fell further within the subsequent month. The odds of a continued downward trend are .
The Moving Average Convergence Divergence Histogram (MACD) for BBY turned negative on April 04, 2024. This could be a sign that the stock is set to turn lower in the coming weeks. Traders may want to sell the stock or buy put options. Tickeron's A.I.dvisor looked at 53 similar instances when the indicator turned negative. In of the 53 cases the stock turned lower in the days that followed. This puts the odds of success at .
Following a 3-day decline, the stock is projected to fall further. Considering past instances where BBY declined for three days, the price rose further in of 62 cases within the following month. The odds of a continued downward trend are .
Bullish Trend Analysis
The Stochastic Oscillator shows that the ticker has stayed in the oversold zone for 4 days. The price of this ticker is presumed to bounce back soon, since the longer the ticker stays in the oversold zone, the more promptly an upward trend is expected.
Following a 3-day Advance, the price is estimated to grow further. Considering data from situations where BBY advanced for three days, in of 353 cases, the price rose further within the following month. The odds of a continued upward trend are .
BBY may jump back above the lower band and head toward the middle band. Traders may consider buying the stock or exploring call options.
Fundamental Analysis (Ratings)
The Tickeron Valuation Rating of (best 1 - 100 worst) indicates that the company is seriously undervalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (5.760) is normal, around the industry mean (12.709). P/E Ratio (14.373) is within average values for comparable stocks, (35.640). Projected Growth (PEG Ratio) (1.507) is also within normal values, averaging (2.536). Dividend Yield (0.045) settles around the average of (0.033) among similar stocks. P/S Ratio (0.411) is also within normal values, averaging (87.325).
The Tickeron SMR rating for this company is (best 1 - 100 worst), indicating very strong sales and a profitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron Price Growth Rating for this company is (best 1 - 100 worst), indicating steady price growth. BBY’s price grows at a higher rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron PE Growth Rating for this company is (best 1 - 100 worst), pointing to consistent earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron Profit vs. Risk Rating rating for this company is (best 1 - 100 worst), indicating that the returns do not compensate for the risks. BBY’s unstable profits reported over time resulted in significant Drawdowns within these last five years. A stable profit reduces stock drawdown and volatility. The average Profit vs. Risk Rating rating for the industry is 77, placing this stock better than average.
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Fundamental Analysis Ratings
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General Information
a retailer of consumer electronics, entertainment software and appliances
Industry SpecialtyStores