US Equities Analysis

BBY — Best Buy

Research evidence pack

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2. Company Fundamentals

2.1 Competitiveness

Metric Value
Operating Margins 4.04%
Profit Margins 2.73%
Return on Equity 39.1%
Return on Assets 7.77%
Free Float 0.2B
Dividend Yield 4.94%
Short Int % Utilisation 10.18%

2.2 Growth

Metric Value
Revenue Growth 1.9%
Free Cash Flow 1.14B
EBITDA 6.94 (Ratio)
Enterprise Value 18.17B
EV/Revenue 0.43
EV/EBITDA 6.94

Revenue growth of 1.9% suggests mature or challenged top-line momentum.

2.3 Management

Role Metric
Consensus Rating N/A

2.4 Return

Metric Value
Expected Return (Ann.)* 37.23%
Risk / Std Dev (Ann.)* 37.78%
1-Year Price Return* 27.38%

Latest Market Data (as of 2026-08-14, US Eastern time):

Metric Value
Last Price $86.42
52-Week Range $55.10 – $91.27
Observation Count 248 trading days

The return and risk statistics use daily adjusted closes from the retrieved one-year series and annualise daily moments using 252 trading days. The last price is the latest regular-market price reported for the stated date. Source: Yahoo Finance market data.

2.5 FCFF DCF Valuation

Valuation basis: This research model follows a five-year, unlevered FCFF DCF. It starts from reported annual operating inputs, forecasts revenue and operating cash conversion under an explicit mechanical policy, discounts FCFF at WACC, applies a Gordon-growth terminal value, and bridges enterprise value to an indicative common-equity value per share. It is an analytical estimate rather than a recommendation or personalised target price.

Step 1 — Forecast Operating Profit and NOPAT

Reported operating input Value
Revenue $41.69B
Prior annual revenue $41.53B
EBIT $1.45B
Tax rate 24.00%
NOPAT = EBIT × (1 − tax rate) $1.10B
Forecast start-growth basis 0.39%
Forecast policy latest reported annual revenue growth, bounded to -10.00% / 15.00%

Step 2 — Calculate FCFF

Current FCFF building block Value
NOPAT $1.10B
Add: depreciation & amortisation $831.00M
Less: capital expenditure -$704.00M
Less/(add): working-capital cash-flow movement -$539.00M
Current unlevered FCFF $690.72M

Explicit FCFF forecast

Forecast year Revenue growth NOPAT D&A Capex Change in NWC FCFF Present value
1 0.39% $1.11B $834.26M -$706.76M -$541.12M $693.43M $661.36M
2 0.92% $1.12B $841.93M -$745.43M -$546.09M $667.64M $579.23M
3 1.45% $1.13B $854.11M -$788.84M -$553.99M $644.66M $508.76M
4 1.97% $1.16B $870.96M -$837.68M -$564.92M $624.10M $448.04M
5 2.50% $1.18B $892.73M -$892.73M -$579.04M $605.60M $395.47M

Step 3 — Determine the Discount Rate (WACC)

WACC input Value
Risk-free rate 4.71%
Equity risk premium assumption 5.50%
Beta 1.32
Cost of equity 11.96%
Pre-tax cost of debt 1.15%
WACC 9.93%
WACC validation within standard range

Step 4 — Estimate Terminal Value

Terminal-value input Value
Perpetuity growth rate 2.50%
Terminal value $8.35B
Implied terminal EV / EBITDA 3.41x
Terminal value as % of enterprise value 66.73%

Step 5 — Discount Cash Flows to Enterprise Value

Enterprise-value component Value
Present value of explicit FCFF $2.59B
Present value of terminal value $5.20B
Indicated enterprise value $7.79B
Discounting convention mid-year for explicit FCFF; terminal value discounted at year-end five

Step 6 — Convert Enterprise Value to Equity Value

Equity bridge Value
Indicated enterprise value $7.79B
Less: gross interest-bearing debt $4.13B
Add: cash and equivalents $1.74B
Add: affiliate investments $0.00
Less: minority interests $0.00
Indicated common equity value $5.40B

Step 7 — Calculate Indicative Value Per Share

Per-share output Value
Shares used 212,100,000.00
Share-count basis reported diluted weighted-average shares
Current market price $87.83
DCF indicative value per share $25.46
Indicative value vs. market price -71.02%

Model Integrity Checks

Check Result
Perpetuity growth is below the risk-free rate pass
Perpetuity growth is below WACC pass
WACC is within the configured operating-company range pass
Terminal-year FCFF is positive pass
Terminal capex converges to D&A pass
Terminal-value concentration within review band
Implied price differs from spot by more than 30% review required

2.6 Investor-Style Research Screen

Educational screen Result
Buffett-inspired cash-quality checks 4/4 evidenced checks
Lynch-inspired balance-and-growth checks 4/4 evidenced checks

Data lineage: Yahoo Finance public market and reported-statement data; retrieval timestamp: 2026-08-18 17:24:13.326897 UTC; latest reported fiscal period: 2026-01-31 00:00:00. Default assumptions: five-year forecast, mid-year discounting for explicit FCFF, a maximum 2.50% perpetuity-growth rate below both WACC and the risk-free rate, historical operating-ratio persistence, and capex convergence to D&A by year five. No sell-side consensus or management guidance is substituted for reported inputs. This is research and analysis only, not personalized financial advice.

us-equity stock equity bby consumer-discretionary computer--electronics-retail nasdaq