Best Buy Operating Margin vs. Price To Sales

BBY Stock  USD 87.60  0.80  0.90%   
Based on the key profitability measurements obtained from Best Buy's financial statements, Best Buy Co may not be well positioned to generate adequate gross income at the moment. It has a very high risk of underperforming in January. Profitability indicators assess Best Buy's ability to earn profits and add value for shareholders.

Best Buy Operating Profit Margin

0.006846

Price To Sales Ratio is likely to drop to 0.06 in 2024. Days Sales Outstanding is likely to drop to 3.74 in 2024. At this time, Best Buy's Accumulated Other Comprehensive Income is fairly stable compared to the past year. Total Other Income Expense Net is likely to rise to about 49.4 M in 2024, whereas Operating Income is likely to drop slightly above 1.2 B in 2024.
Current ValueLast YearChange From Last Year 10 Year Trend
Gross Profit Margin0.140.221
Way Down
Slightly volatile
Net Profit Margin2.0E-40.0286
Way Down
Pretty Stable
Operating Profit Margin0.00680.0362
Way Down
Very volatile
Pretax Profit Margin4.0E-40.0373
Way Down
Very volatile
Return On Assets0.0010.0829
Way Down
Pretty Stable
Return On Equity0.00390.4065
Way Down
Pretty Stable
For Best Buy profitability analysis, we use financial ratios and fundamental drivers that measure the ability of Best Buy to generate income relative to revenue, assets, operating costs, and current equity. These fundamental indicators attest to how well Best Buy Co utilizes its assets to generate profit and value for its shareholders. The profitability module also shows relationships between Best Buy's most relevant fundamental drivers. It provides multiple suggestions of what could affect the performance of Best Buy Co over time as well as its relative position and ranking within its peers.
  

Best Buy's Revenue Breakdown by Earning Segment

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Is Computer & Electronics Retail space expected to grow? Or is there an opportunity to expand the business' product line in the future? Factors like these will boost the valuation of Best Buy. If investors know Best will grow in the future, the company's valuation will be higher. The financial industry is built on trying to define current growth potential and future valuation accurately. All the valuation information about Best Buy listed above have to be considered, but the key to understanding future value is determining which factors weigh more heavily than others.
Quarterly Earnings Growth
0.072
Earnings Share
5.84
Revenue Per Share
196.567
Quarterly Revenue Growth
(0.03)
Return On Assets
0.0722
The market value of Best Buy is measured differently than its book value, which is the value of Best that is recorded on the company's balance sheet. Investors also form their own opinion of Best Buy's value that differs from its market value or its book value, called intrinsic value, which is Best Buy's true underlying value. Investors use various methods to calculate intrinsic value and buy a stock when its market value falls below its intrinsic value. Because Best Buy's market value can be influenced by many factors that don't directly affect Best Buy's underlying business (such as a pandemic or basic market pessimism), market value can vary widely from intrinsic value.
Please note, there is a significant difference between Best Buy's value and its price as these two are different measures arrived at by different means. Investors typically determine if Best Buy is a good investment by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Best Buy's price is the amount at which it trades on the open market and represents the number that a seller and buyer find agreeable to each party.

Best Buy Price To Sales vs. Operating Margin Fundamental Analysis

Comparative valuation techniques use various fundamental indicators to help in determining Best Buy's current stock value. Our valuation model uses many indicators to compare Best Buy value to that of its competitors to determine the firm's financial worth.
Best Buy Co is rated fourth in operating margin category among its peers. It is rated below average in price to sales category among its peers fabricating about  10.87  of Price To Sales per Operating Margin. At this time, Best Buy's Operating Profit Margin is fairly stable compared to the past year. The reason why the comparable model can be used in almost all circumstances is due to the vast number of multiples that can be utilized, such as the price-to-earnings (P/E), price-to-book (P/B), price-to-sales (P/S), price-to-cash flow (P/CF), and many others. The P/E ratio is the most commonly used of these ratios because it focuses on the Best Buy's earnings, one of the primary drivers of an investment's value.

Best Buy's Earnings Breakdown by Geography

Best Price To Sales vs. Operating Margin

Operating Margin shows how much operating income a company makes on each dollar of sales. It is one of the profitability indicators which helps analysts to understand whether the firm is successful or not making money from everyday operations.

Best Buy

Operating Margin

 = 

Operating Income

Revenue

X

100

 = 
0.04 %
A good Operating Margin is required for a company to be able to pay for its fixed costs or payout its debt, which implies that the higher the margin, the better. This ratio is most effective in evaluating the earning potential of a company over time when comparing it against a firm's competitors.
Price to Sales ratio is typically used for valuing equity relative to its own past performance as well as to performance of other companies or market indexes. In most cases, the lower the ratio, the better it is for investors. However, it is advisable for investors to exercise caution when looking at price-to-sales ratios across different industries.

Best Buy

P/S

 = 

MV Per Share

Revenue Per Share

 = 
0.44 X
The most critical factor to remember is that the price of equity takes a firm's debt into account, whereas the sales indicators do not consider financial leverage. Generally speaking, Price to Sales ratio shows how much market values every dollar of the company's sales.

Best Price To Sales Comparison

Best Buy is currently under evaluation in price to sales category among its peers.

Best Buy Profitability Projections

The most important aspect of a successful company is its ability to generate a profit. For investors in Best Buy, profitability is also one of the essential criteria for including it into their portfolios because, without profit, Best Buy will eventually generate negative long term returns. The profitability progress is the general direction of Best Buy's change in net profit over the period of time. It can combine multiple indicators of Best Buy, where stable trends show no significant progress. An accelerating trend is seen as positive, while a decreasing one is unfavorable. A rising trend means that profits are rising, and operational efficiency may be rising as well. A decreasing trend is a sign of poor performance and may indicate upcoming losses.
Last ReportedProjected for Next Year
Accumulated Other Comprehensive Income317 M332.9 M
Operating Income1.6 B1.2 B
Income Before Tax1.6 B1.1 B
Total Other Income Expense Net47 M49.4 M
Net Income1.2 B820.6 M
Income Tax Expense381 M370.7 M
Interest Income6.3 MM
Net Income Applicable To Common Shares1.6 B1.7 B
Net Interest Income-52 M-54.6 M
Net Income From Continuing Ops1.2 B1.3 B
Non Operating Income Net Other26.1 M23.2 M
Change To Netincome400.2 M278.3 M
Income Quality 1.18  1.57 
Net Income Per E B T 0.77  0.61 

Best Profitability Driver Comparison

Profitability drivers are factors that can directly affect your investment outlook on Best Buy. Investors often realize that things won't turn out the way they predict. There are maybe way too many unforeseen events and contingencies during the holding period of Best Buy position where the market behavior may be hard to predict, tax policy changes, gold or oil price hikes, calamities change, and many others. The question is, are you prepared for these unexpected events? Although some of these situations are obviously beyond your control, you can still follow the important profit indicators to know where you should focus on when things like this occur. Below are some of the Best Buy's important profitability drivers and their relationship over time.

Use Best Buy in pair-trading

One of the main advantages of trading using pair correlations is that every trade hedges away some risk. Because there are two separate transactions required, even if Best Buy position performs unexpectedly, the other equity can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Best Buy will appreciate offsetting losses from the drop in the long position's value.

Best Buy Pair Trading

Best Buy Co Pair Trading Analysis

The ability to find closely correlated positions to Best Buy could be a great tool in your tax-loss harvesting strategies, allowing investors a quick way to find a similar-enough asset to replace Best Buy when you sell it. If you don't do this, your portfolio allocation will be skewed against your target asset allocation. So, investors can't just sell and buy back Best Buy - that would be a violation of the tax code under the "wash sale" rule, and this is why you need to find a similar enough asset and use the proceeds from selling Best Buy Co to buy it.
The correlation of Best Buy is a statistical measure of how it moves in relation to other instruments. This measure is expressed in what is known as the correlation coefficient, which ranges between -1 and +1. A perfect positive correlation (i.e., a correlation coefficient of +1) implies that as Best Buy moves, either up or down, the other security will move in the same direction. Alternatively, perfect negative correlation means that if Best Buy moves in either direction, the perfectly negatively correlated security will move in the opposite direction. If the correlation is 0, the equities are not correlated; they are entirely random. A correlation greater than 0.8 is generally described as strong, whereas a correlation less than 0.5 is generally considered weak.
Correlation analysis and pair trading evaluation for Best Buy can also be used as hedging techniques within a particular sector or industry or even over random equities to generate a better risk-adjusted return on your portfolios.
Pair CorrelationCorrelation Matching

Use Investing Themes to Complement your Best Buy position

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Additional Tools for Best Stock Analysis

When running Best Buy's price analysis, check to measure Best Buy's market volatility, profitability, liquidity, solvency, efficiency, growth potential, financial leverage, and other vital indicators. We have many different tools that can be utilized to determine how healthy Best Buy is operating at the current time. Most of Best Buy's value examination focuses on studying past and present price action to predict the probability of Best Buy's future price movements. You can analyze the entity against its peers and the financial market as a whole to determine factors that move Best Buy's price. Additionally, you may evaluate how the addition of Best Buy to your portfolios can decrease your overall portfolio volatility.