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BBY Best Buy Co., Inc. - Fundamental Analysis

BEARISH
BBY Stock | Fundamental Analysis & Investment Insights
NYSE Consumer Cyclical Specialty Retail
Current Price
$69.18
Analyst Target
$83.57
+20.8% Upside
52W High
$91.68
52W Low
$54.99

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AI Analysis

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Confidence Score
78%
Analysis Accuracy
The Advanced Deterministic Scorecard reveals a weak financial health profile with a Piotroski F-Score of 4/9 (Stable but low) and an implausibly high Altman Z-Score of 67869868288.0, which likely indicates data error or extreme outlier conditions. Despite a strong ROE of 22.49% and a high dividend yield of 5.49%, the company faces significant risks including a negative earnings growth trend (-47.60% YoY), a dangerously high payout ratio of 125.08%, and deteriorating insider sentiment with $141.57M in net insider selling over the past six months. Valuation metrics are mixed, with a forward P/E of 10.25 suggesting potential value, but the current price of $69.18 trades well above both the Graham Number ($29.35) and intrinsic value estimate ($21.21), indicating substantial overvaluation. Technical trend is bearish, and recent price performance shows a 15.4% decline over the past year, underperforming peers in a recovering sector.

Key Strengths

High dividend yield of 5.49% offers income appeal despite sustainability concerns
Strong ROE of 22.49% indicates efficient use of shareholder equity
Forward P/E of 10.25 is below sector average, suggesting potential value if earnings stabilize
Consistent earnings beat history: 3 out of last 4 quarters beat estimates with strong surprises
Operating margin of 3.98% remains positive in a low-margin retail environment

Key Risks

Piotroski F-Score of 4/9 indicates weak financial health and poor fundamental momentum
Earnings growth collapsing: -47.60% YoY and -48.70% Q/Q point to severe profitability deterioration
Dividend payout ratio of 125.08% is unsustainable and raises cut risk
Insider selling of $141.57M in 6 months signals strong bearish sentiment from executives
Current price ($69.18) is 136% above Graham Number ($29.35), indicating severe overvaluation
AI Fair Value Estimate
Based on comprehensive analysis
$32.5
-53.0% below current price

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