Best Buy (BBY) shares fall as market gains: What you need to know

IIn the last trading session, Best Buy (BBY) closed at $76.99, marking a -1.28% move from the previous day. That move lagged the S&P 500’s 1.42% daily gain. Elsewhere, the Dow gained 0.97%, while the tech-heavy Nasdaq lost 0.07%.

Today, shares of the consumer electronics retailer have gained 19.64% over the past month. At the same time, the retail and wholesale sector gained 7%, while the S&P 500 gained 6.69%.

Investors are hoping for strength from Best Buy as it approaches its next earnings release. The company is expected to post EPS of $1.89, down 36.58% from the prior year quarter. Our most recent consensus estimate calls for quarterly revenue of $10.57 billion, down 10.78% from the prior year period.

For the full year, our Zacks consensus estimates call for earnings of $8.66 per share and revenue of $47.34 billion, which would represent swings of -13.49% and -8, 54%, respectively, compared to the previous year.

Any recent changes in analyst estimates for Best Buy should also be noted by investors. These revisions generally reflect the latest short-term trading trends, which may change frequently. Therefore, we can interpret positive estimate revisions as a good sign for the company’s business outlook.

Our research shows that these estimate changes are directly correlated to short-term stock prices. To benefit from this, we have developed the Zacks Rank, a proprietary model that takes into account these estimation changes and provides an actionable rating system.

The Zacks ranking system ranges from #1 (strong buy) to #5 (strong sell). It has a remarkable track record of third-party audited success, with #1 stocks offering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has fallen 0.4% . Best Buy currently sports a Zacks rank of #3 (Hold).

Investors should also note Best Buy’s current valuation metrics, including its forward P/E ratio of 9.01. For comparison, its industry has an average PER of 11.48, which means Best Buy is trading at a discount to the group.

Investors should also note that BBY has a PEG ratio of 1.07 at this time. The PEG ratio is similar to the widely used P/E ratio, but this measure also takes into account the company’s expected earnings growth rate. Retail – Consumer Electronics had an average PEG ratio of 0.84 at yesterday’s closing price.

The Retail – Consumer Electronics industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Ranking of 98, which places it in the top 39% of over 250 industries.

The Zacks Industry Ranking assesses the strength of our industry groups by measuring the average Zacks Ranking of individual stocks within the groups. Our research shows that the top 50% of industries outperform the bottom half by a factor of 2 to 1.

To follow BBY in future trading sessions, be sure to use Zacks.com.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.