QualityDipStocks / Consumer Discretionary · Electronics retail
Best Buy BBY
Not in a dip by our rules: 5% below its 52-week high.
A quality company trading well below our fair value estimate, 6% over its Market Value.
- Fair value est.
- $131.72+38%
- Market Value
- $90.02price +6%
- Off 52-wk high
- −5%
- Risk vs market
- Lowbeta 0.48
5 bullish · 5 bearish See why
Key levels
Every level vs today’s $95.65
- 52-wk lowlowest close, 1 year$55.52−42.0%
- Market Valueavg paid since Aug 27$90.02−5.9%
- PriceFri Oct 30 close$95.65you are here
- 52-wk highhighest close, 1 year$100.39+5.0%
- Fair value est.base case$131.72+37.7%
Fair value estimate
How the range is computed
Ten-year free-cash-flow DCF. Same 10-year free-cash-flow model as the base: discount rate 9.5% ±1 point and growth 3.0% ±2 points. Bear = 10.5% and 1.0%; bull = 8.5% and 5.0% (both fade to 3%). A model estimate from public filings, not a forecast of where the price will go.
Price is below even the bear case.
What the price implies To be worth today’s price, BBY’s free cash flow would need to shrink about 3% a year for five years; our estimate uses 3%.
Risk vs market
How risk vs market is measured
One year of daily returns (Oct 30 to Oct 30, 252 sessions). Beta = how much BBY moved for each 1% move in the S&P 500 (SPY); 1.0 moves with the market. Volatility is the yearly standard deviation of daily returns. Past behavior, not a forecast.
Moves much less than the market, but its own price swings are 3.0× the S&P 500’s (it moves on its own news).
- Beta vs S&P 500
- 0.48
- Volatility
- 38% vs 13% SPY
- Correlation SPY
- 0.16
- Correlation QQQ
- 0.07
Bull vs bear
Rule-based from the data on this page, strongest first. Not advice.
Top bullish points 5 of 5
ValuationOur DCF fair value estimate is $131.72, 38% above the price.
ValuationFree-cash-flow yield of 8.7% (price / FCF 11.5×): $1.8B of free cash in the last 12 months.
ProfitabilityReturn on invested capital of 60%, above the 9.5% discount rate our DCF uses.
ProfitabilityReturn on equity of 43% over the last 12 months.
QualityPasses all four of our quality checks: cash generation, returns on capital, growth and balance sheet.
Top bearish points 5 of 5
GrowthSales shrank 3% a year from FY2023 to FY2026.
ProfitabilityOperating margin of 4.1%, below the 13% median for the 156 Consumer Discretionary companies we cover.
GrowthSales grew 1.4% over the last 12 months, below the 7.0% median for the 175 Consumer Discretionary companies we cover.
ProfitabilityGross margin of 23%, below the 39% median for the 120 Consumer Discretionary companies we cover.
ValuationTrades 6.2% above its Market Value of $90.02, the average price paid since the Aug 27 filing.
Who’s talking about it
Notable investors, executives, analysts and public figures on Best Buy in the last 48 hours. Headlines as published, each linked. Their words, not ours.
No notable mentions in the last 48 hours. Checked Nov 1, 9:09 PM ET.
Compare with peers
Closest in size in Consumer Discretionary
All fundamentals
P/E 16.0 · FCF yield 8.7% · ROE 43%
Valuation
- P/E
- 16.0×3-yr-end avg 15.4× · Consumer Discretionary median 20.9×
- Price / FCF
- 11.5×
- FCF yield
- 8.7%
- EV / EBITDA
- 7.7×
- Price / sales
- 0.48×
- Price / book
- 6.39×
- Market cap
- $20.3Bprice × diluted shares
- Enterprise value
- $19.3B
Growth
- Revenue, 12 months
- $42.2B
- Sales growth, 12 months
- +1.4%vs the 12 months before
- Sales growth, 3 yrs
- −3.4%/yrfrom FY2023
- Diluted EPS, 12 months
- $6.01
- EPS growth, last FY
- +17.8%
- Net income, 12 months
- $1.3B
- Net income growth
- +63%12 months vs before
Profitability
- Gross margin
- 22.7%
- Operating margin
- 4.1%
- Net margin
- 3.0%
- FCF margin
- 4.2%
- Return on equity
- 43%
- Return on invested capital
- 60%
Balance sheet
- Cash & short-term inv.
- $2.3B
- Total debt
- $1.2B
- Net cash
- $1.1B
- Debt / equity
- 0.37×
- Interest coverage
- 38.0×operating income / interest
Cash flow & returns
- Free cash flow, 12 months
- $1.8B
- FCF growth, 12 months
- +31%
- Dividend yield
- 3.95%$803M paid
- Payout ratio
- 63%
- Buybacks, 12 months
- $144M0.7% of market cap
- Share count, 1 year
- +0.3%diluted shares vs a year ago
- Stock-based comp
- $138M
Trailing 12 months to Aug 1, 2026; balance sheet at Aug 1, 2026. From Best Buy’s SEC filings. Sparklines show up to six fiscal years. n/a means we don’t hold that number, with the reason. How each is computed.
Valuation details
DCF $131.72 · MV $90.02 · FCF value $200.59
Assumes 3.0% growth for 5 years (revenue grew -3.4% a year FY23–FY26; floored at 3%), fading to 3%; 9.5% discount rate, 3% terminal growth. FCF base $8.31 a share (trailing 12 months to Aug 1, 2026), from the 10-Q filed Sep 4, 2026.
Setup & signals
No setup armed
No setup armed, so there’s no trigger or stop to track yet. Reversal signal rules only arm once a company is in a dip.
Momentum & 52-week range
RSI 55 · 5 days −4.2%
The business
FCF $1.8B · Sales +4%
- Free cash flow, 12 months$1.8B
- Free-cash-flow yield8.4%
- Free-cash-flow margin4%
- Gross margin23%
- Operating margin4%
- Return on invested capital33%
- Return on equity44%
- Sales growth (latest quarter vs year-ago quarter)+4%
- Net debt / EBITDA0.7×
Information only, not investment advice. Fair value estimates and talking points are rule-based model output from public data and can be wrong; stop levels are reference points, not orders. How every number is computed.
Get a text when BBY fires a reversal signal
One text when a published rule fires on BBY or any of the 333 quality companies we track: the ticker, the price, the stop and a link to the numbers. Nothing else.