WMT - Best Buy Remains Highly Vulnerable To E-Commerce
2024-04-15 21:35:53 ET
Summary
- Best Buy's stock price has risen recently, but the future outlook looks poor based on lowered sales revenue.
- Shrinking sales revenue, slow adaptability, and overvaluation make Best Buy a poor stock to own in 2024. However, the dividend of 4.8% still offers value.
- Best Buy faces vulnerabilities in online competition, e-commerce sales growth, and changing consumer habits.
- Based on a dividend discount model, the price currently trades at a premium valuation to fair price. However, price targets show a potential upside of 10.4%.
Overview
Best Buy ( BBY ) has outpaced the S&P 500 ( SPY ) in total return since my initial coverage of the stock back in November of 2023. While I still remain unimpressed by the company's fundamental business model, I am, however, impressed by the upward price movement over the last 6-month period. The price movement can likely be attributed to the last earnings report, where revenue and EPS came in stronger than expected. The price spike led me to this point of creating follow-up coverage in response. Is Best Buy still a good stock to own in 2024? I don't believe so due to their shrinking sales revenue, slow adaptability, and current overvaluation....
Best Buy Remains Highly Vulnerable To E-Commerce