BBY
Best Buy Co., Inc.$65.95
Unclear
Target $66.92
Report: Mar 07, 2026Consumer Cyclical • Specialty Retail • Cyclical OperatorSnapshot
Decision-first overview with recommendation, valuation anchor, and current setup.
Company Overview
Research Snapshot
Price History
Pelican View
Current$65.95+1.5%
Rec: UnclearConviction: Medium
Entry Target
$51.48
(22% below current)
Fair Value
$66.92
(1% above current)
Stop Loss
$54.99
(17% below current)
Position Size
Starter
Time Horizon
Transitional
Key Metrics
Live Snapshot
Market Data
52 Week High$84.99
52 Week Low$54.99
Avg. 3 Month Volume4.89M
Efficiency
LTM Gross Margin22.5%
LTM EBITDA Margin5.5%
LTM EBIT Margin3.5%
LTM Operating Margin3.3%
LTM ROA7.0%
LTM ROE38.5%
LTM ROIC16.7%
LTM ROCE21.5%
Capital Structure
Market Cap (MM)$13.4B
Enterprise Value (MM)$15.8B
Shares Outstanding209.80M
Total Debt (MM)$4.13B
Cash & Equivalents (MM)$1.74B
LTM Net Debt (MM)$2.40B
LTM Net Debt/EBITDA1.0x
Growth
TTM Rev. Growth0.4%
Last 3-Yr Rev. CAGR-3.4%
Last 3-Yr EBITDA CAGR-5.9%
Last 3-Yr EPS CAGR-7.1%
Valuation
Street Target Price$77.89
LTM EV/Revenue0.4x
LTM EV/Gross Profit1.7x
LTM EV/EBIT10.9x
LTM EV/EBITDA6.9x
LTM P/E12.6x
LTM EV/FCF12.6x
LTM P/FCF10.7x
LTM P/TB1.0x
LTM P/B4.5x
Dividend Yield5.9%
Payout Ratio75.1%
Executive SummarySituation: Current price is $65.95 versus fair value $66.92 (1.5% expected return), and valuation confidence is stable. Debate: Bull case depends on Inflection to positive comparable store sales in the computing category. Bear case centers on Lower-for-longer cyclical downturn in consumer electronics demand. Conclusion: Recommendation is Unclear; maintain no position until reliability and catalyst evidence improve.
Bull Case
The AI-PC replacement cycle and Windows 10 end-of-life create a multi-year tailwind for the computing segment; Best Buy Ads and Marketplace scale to $1B+ GMV, adding 50+ basis points to gross margins.
Bear Case
Structural decline in big-box retail relevance leads to persistent negative comparable sales; tariff escalation on China-sourced goods (currently 30-35% of COGS) erodes gross margins below 22%.
Key Catalysts
Mid-Term (6-18 months)Impact: High
Inflection to positive comparable store sales in the computing category. This would validate the AI-PC replacement cycle thesis and alleviat...
Near-Term (0-6 months)Impact: Moderate
Scaling of Best Buy Marketplace GMV to a $500M+ annual run-rate. This would demonstrate the viability of new profit streams and provide a hi...
Long-Term (18+ months)Impact: Moderate
Best Buy is currently relevant as it sits at the intersection of a potential tech hardware refresh cycle and a volatile macro environment, w...
Primary Risks
Concern: High
Lower-for-longer cyclical downturn in consumer electronics demand. A prolonged period of high interest rates or a housing market freeze coul...
Concern: Medium
Tariff escalation on China-sourced goods. With 30-35% of COGS sourced from China and a blended effective tariff rate of 16%, any further inc...
Concern: Medium
Stewardship is adequate but lacks strong alignment. The Governance Outcome Tree suggests: 1. Status Quo: Management continues to milk the co...
Recent Activity
2026-03-03SEC Filing (8-K)
+7.08%Best Buy reports Q4 FY26 results with 0.8% comparable sales decline
2025-11-25SEC Filing (8-K)
+5.34%Best Buy reports Q3 FY26 results with 2.7% comparable sales growth
2025-05-29SEC Filing (8-K)
-7.27%Best Buy reports Q1 FY26 results with 0.7% comparable sales decline
2025-03-04SEC Filing (8-K)
-13.30%Best Buy reports Q4 FY25 results with 0.5% comparable sales growth and provides FY26 guidance.
2024-08-29SEC Filing (8-K)
+14.11%Best Buy reports Q2 FY25 results with 2.3% revenue decline but raises full-year EPS guidance.
Valuation Table
9.8/10Decision Grade