Best Buy Co (BBY) AI Stock Analysis

• Market Cap: $15.62B
• Dividend Yield: 5.11%
• Average Volume (3M): 4.53M
• Price to Earnings (P/E): 17.2
• Beta (1Y): 0.99
• Revenue Growth: -4.43%
• EPS Growth: -24.58%
• Country: US
• Employees: 85,000
• Sector: Consumer Cyclical
• Sector Strength: 74
• Industry: Specialty Retail
• EPS (TTM): 2.58
• Shares Outstanding: 211,685,530
• 10 Day Avg. Volume: 2,749,454
• 30 Day Avg. Volume: 4,532,768
• PEG Ratio: -0.58
• Price to Book (P/B): 5.18
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 10.34
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $87.07
• Price Target Upside: 17.98% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 18

Best Buy's overall score of 69 reflects a balanced outlook. Strengths include robust cash flow management and an attractive valuation with a high dividend yield. However, declining revenue and profitability, alongside increasing leverage, pose risks. The technical analysis suggests moderate upward momentum, while mixed earnings call sentiment highlights both opportunities and ongoing challenges. The company's strategic initiatives might drive future growth, yet macroeconomic factors remain a concern.

Positive Factors

Consumer demand

Consumers may be purchasing products before the impact of tariff pricing goes into effect, which should be a near-term tailwind to BBY sales and other retailers that sell consumer electronics.

Earnings performance

The report shows better-than-expected earnings per share for the fourth quarter, driven by strong performance in computing and tablets.

Tariff relief

A late Friday afternoon filing by U.S. Customs & Border Patrol provides what could be significant tariff relief for Best Buy.

Negative Factors

Consumer electronics industry trends

Analyst reiterates an Underperform rating due to challenging consumer electronics industry trends and uncertainty around the impact of tariffs.

Labor cost pressures

Labor rate pressure is anticipated due to investments in dedicated store labor, impacting the first quarter.

Tariff challenges

Best Buy still has about 20% of its sourcing stemming from Mexico where 25% tariffs stand.

Best Buy Co Business Overview & Revenue Model

Company Description

Best Buy Co., Inc. retails technology products in the United States and Canada. The company operates in two segments, Domestic and International. Its stores provide computing products, such as desktops, notebooks, and peripherals; mobile phones comprising related mobile network carrier commissions; networking products; tablets covering e-readers; smartwatches; and consumer electronics consisting of digital imaging, health and fitness, home theater, portable audio comprising headphones and portable speakers, and smart home products. The company's stores also offer appliances, such as dishwashers, laundry, ovens, refrigerators, blenders, coffee makers, and vacuums; entertainment products consisting of drones, peripherals, movies, music, and toys, as well as gaming hardware and software, and virtual reality and other software products; and other products, such as baby, food and beverage, luggage, outdoor living, and sporting goods. In addition, it provides consultation, delivery, design, health-related, installation, memberships, repair, set-up, technical support, and warranty-related services. The company offers its products through stores and websites under the Best Buy, Best Buy Ads, Best Buy Business, Best Buy Health, CST, Current Health, Geek Squad, Lively, Magnolia, Best Buy Mobile, Pacific Kitchen, Home, and Yardbird, as well as domain names bestbuy.com, currenthealth.com, lively.com, yardbird.com, and bestbuy.ca. As of January 30, 2022, it had 1,144 stores. The company was formerly known as Sound of Music, Inc. The company was incorporated in 1966 and is headquartered in Richfield, Minnesota.

How the Company Makes Money

Best Buy makes money primarily through the sale of consumer electronics and appliances, both in-store and online. The company generates revenue from its diverse product offerings, which include computing and mobile phones, home theater equipment, entertainment products, and appliances. Additionally, Best Buy earns income from its services segment, which includes warranties, installation, and repair services provided by its Geek Squad division. The company's business model is supported by strategic partnerships with leading technology brands, enabling it to offer exclusive products and promotions. Best Buy's revenue is also influenced by seasonal sales events, such as Black Friday and holiday shopping, which drive significant consumer traffic and sales volume.

Best Buy Co Financial Statement Overview

Summary

Best Buy's financial performance is characterized by declining revenue and profitability, with decreasing net profit margins and EBIT/EBITDA margins. The balance sheet indicates increasing leverage and reduced returns on equity, presenting financial risks. However, strong cash flow generation supports liquidity, despite fluctuations in capital expenditures.

Income Statement

Best Buy's revenue has experienced a declining trend over the past few years, with a negative growth rate from $51.76 billion in 2022 to $41.53 billion in 2025. The gross profit margin has been relatively stable, hovering around 22.6% in the most recent year. However, the net profit margin has decreased from 4.7% in 2022 to 2.2% in 2025, indicating shrinking profitability. EBIT and EBITDA margins have also declined, reflecting pressure on operating performance.

Balance Sheet

The debt-to-equity ratio has shown a concerning increase, moving from 1.13 in 2021 to 1.44 in 2025, indicating higher leverage and financial risk. The return on equity (ROE) has decreased over the period, from 53.4% in 2022 to 33.0% in 2025, showing reduced returns for shareholders. The equity ratio has remained low, at around 19%, highlighting potential vulnerability in the capital structure.

Cash Flow

Operating cash flow has shown a positive trend, increasing from $2.56 billion in 2020 to $2.10 billion in 2025. Free cash flow has also improved significantly, with a notable spike in 2024. The free cash flow to net income ratio has been strong, reflecting efficient cash generation relative to earnings. However, fluctuations in capital expenditures and financing cash flows indicate potential volatility in future cash flow stability.

Breakdown
Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement		Total Revenue
41.53B	43.45B	46.30B	51.76B	47.26B
	Gross Profit
9.38B	9.60B	9.91B	11.64B	10.57B
	EBIT
1.26B	1.57B	1.79B	3.04B	2.39B
	EBITDA
1.26B	2.60B	2.86B	3.88B	3.51B
	Net Income Common Stockholders
927.00M	1.24B	1.42B	2.45B	1.80B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
1.58B	1.45B	1.87B	2.94B	5.49B
	Total Assets
14.78B	14.97B	15.80B	17.50B	19.07B
	Total Debt
4.05B	3.98B	3.98B	3.94B	4.08B
	Net Debt
2.48B	2.54B	2.10B	1.00B	-1.41B
	Total Liabilities
11.97B	11.91B	13.01B	14.48B	14.48B
	Stockholders Equity
2.81B	3.05B	2.79B	3.02B	4.59B
Cash Flow		Free Cash Flow
1.39B	675.00M	894.00M	2.52B	4.21B
	Operating Cash Flow
2.10B	1.47B	1.82B	3.25B	4.93B
	Investing Cash Flow
-704.00M	-781.00M	-962.00M	-1.37B	-788.00M
	Financing Cash Flow
-1.31B	-1.14B	-1.81B	-4.30B	-876.00M

Best Buy Co Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 73.80
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For BBY, the sentiment is Neutral. The current price of 73.8 is above the 20-day moving average (MA) of 68.81, above the 50-day MA of 68.57, and below the 200-day MA of 83.08, indicating a neutral trend. The MACD of 1.49 indicates Negative momentum. The RSI at 56.14 is Neutral, neither overbought nor oversold. The STOCH value of 63.02 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for BBY.

Best Buy Co Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
VIPS	78 Outperform	$7.86B	7.69	20.12%	3.00%	-5.47%	-2.19%
WSM	76 Outperform	$21.37B	19.78	53.91%	1.36%	-0.50%	24.11%
BBY	69 Neutral	$15.62B	17.24	31.63%	5.11%	-4.43%	-24.58%
DG	66 Neutral	$20.58B	18.29	15.89%	2.52%	4.96%	-32.41%
Sector *	61 Neutral	$6.98B	11.35	2.88%	3.90%	2.65%	-21.84%
DLTR	61 Neutral	$18.18B	―	18.88%	―	-9.88%	-205.57%
GME	54 Neutral	$12.73B	107.12	4.19%	―	-27.50%	1150.23%

Best Buy Co Corporate Events

Best Buy Co Secures New $1.25 Billion Credit Facility

On April 18, 2025, Best Buy Co., Inc. entered into a new $1.25 billion five-year senior unsecured revolving credit facility agreement with U.S. Bank and a syndicate of lenders, replacing a previous facility set to expire in 2028. This new agreement, which terminates in April 2030, maintains similar terms to the previous facility and includes variable interest rates based on Best Buy’s senior unsecured debt rating, along with customary covenants and default provisions.

Spark’s Take on BBY Stock

According to Spark, TipRanks’ AI Analyst, BBY is a Neutral.

Best Buy’s stock score reflects challenges in financial performance, particularly with declining revenue and profitability combined with increased leverage. While the company shows strong cash flow management, technical analysis suggests bearish momentum. The valuation remains reasonable, supported by a healthy dividend yield. Earnings call insights reveal mixed sentiment, with strategic plans for growth offset by current market challenges and financial risks.

To see Spark’s full report on BBY stock, click here.