Is Best Buy (BBY) Stock Undervalued Right Now?

The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.

Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.

On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.

One company value investors might notice is Best Buy (BBY). BBY is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock is trading with P/E ratio of 9.66 right now. For comparison, its industry sports an average P/E of 14.39. Over the past 52 weeks, BBY's Forward P/E has been as high as 15.05 and as low as 7.95, with a median of 12.32.

Investors should also recognize that BBY has a P/B ratio of 4.59. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. This stock's P/B looks attractive against its industry's average P/B of 4.86. Over the past year, BBY's P/B has been as high as 7.70 and as low as 3.77, with a median of 5.86.

Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. BBY has a P/S ratio of 0.38. This compares to its industry's average P/S of 0.39.

Finally, investors should note that BBY has a P/CF ratio of 6.89. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 8.06. BBY's P/CF has been as high as 10.26 and as low as 5.65, with a median of 8.43, all within the past year.

These are only a few of the key metrics included in Best Buy's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, BBY looks like an impressive value stock at the moment.

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