How Much Is Best Buy Worth?
Best Buy sells a bevy of appliances and electronic products from many well-known brands, including Apple AirPods and the Samsung Galaxy smartwatches. But it’s the home-electronics and home-entertainment inventory that has best served the retailer since the pandemic made working and streaming content at home a permanent part of many Americans’ lifestyles.
Of course, that alone doesn’t make it a good investment, particularly in light of stiff competition from Amazon. Here are some figures to help investors understand whether to invest in this business or the retail industry as a whole.
|What Best Buy Is Worth|
|Best Buy’s Share Price, 52-Week Range||$95.93-$141.94|
|GOBankingRates’ Evaluation of
Best Buy’s Net Worth
|All information on the 52-week range is accurate as of Nov. 22, 2021.|
Here’s more about Best Buy.
|About Best Buy|
|CEO Corie Barry||$927,692 base pay|
Best Buy Market Cap: $34.108B
Market capitalization considers all of a company’s stock in order to gauge its worth. The higher the cap, the more value investors find in the company.
Best Buy’s market cap of $34.108 billion is based on its current share price of $138 multiplied by the number of shares it has outstanding, which is 245.96 million. The market cap fluctuated only slightly during 2020 and 2021.
Best Buy Net Worth: $34.89B
Although market cap can give you an idea of what the market values a company at, it’s based on market sentiment, which, in turn, is based on a multitude of consumer variables and market players.
The GOBankingRates Evaluation of a company’s net worth, however, considers assets and revenue, taking into account Best Buy’s revenue and profits from the last three years, along with the company’s assets and debts.
Based on Best Buy’s revenue and profits from the last three years, Best Buy’s worth is almost $35 billion.
Best Buy’s Recent CEOs
Best Buy experienced a nasty nearly 29% plummet in share prices at the end of 2013 due to poor holiday sales, the result of a then-stagnant smartphone market and price-cutting competitors. The company saw shares rise 19% in August 2016 after it reported a higher quarterly profit than it had anticipated, according to Reuters. This increase was thanks in part to a burgeoning smartwatch market. Later, in 2017, the Nintendo Switch launch helped bring the company a boost in sales.
MPR News reported in 2016 that, according to a Morningstar retail analyst, Best Buy’s CEO Hubert Joly stabilized the company. It’s hard to argue with facts; after taking over in 2012, Joly helped increase Best Buy’s share price by 271%. Fiscal year 2018 saw Best Buy’s revenue increase by $2.7 billion from 2017, for a total of just over $42 billion. Best Buy share prices gained steadily during that period — a trend that continued for the rest of Joly’s tenure.
In a move the company termed part of the board’s “ongoing succession planning process,” CNBC reported, Joly was replaced as CEO by former chief financial officer Corie Barry in June 2019, just six months before news of COVID-19 began making headlines. Barry is Best Buy’s first female CEO. She can be credited for leveraging the momentum Joly built. Other than a slight and brief dip in spring 2020, when the pandemic essentially shut down the economy, the stock has increased sharply under her leadership and briefly reached its highest price ever, $141.94, before closing at $138 on Nov. 22.
Best Buy in 2022
Best Buy is currently in the fourth quarter of its fiscal year 2022. The company has come through the worst of the pandemic in great shape, with revenues and profits increasing steadily as people stick close to home for both work and entertainment — first by force, and now by choice, Barry told analysts during the retailer’s Q2 2022 earnings call in August. Sales grew 20% that quarter, prompting Best Buy to increase its outlook for the remainder of the year.
Sales and Revenue Growth
In it’s Nov. 23 earnings release for Q3 2022, Best Buy announced that domestic comparable sales were up 2% for the quarter on top of 22.6% for the year. Despite consumers’ return to brick-and-mortar shopping, digital sales were still more than double pre-pandemic levels, and same-day delivery was up 400% as consumers continued upgrading their appliances, home office equipment and home theaters.
Revenue grew from $16.4 billion to $16.9 billion, and earnings per share increased slightly to $2.08, with both metrics beating analysts’ estimates, according to CNBC. Net earnings reached $2 per share compared to $1.48 for the same quarter last year.
Although the company seems poised to build on this momentum during the current holiday season, shares dropped after the results were announced. Analysts are concerned that sales could weaken as consumers start spending more money on travel and entertainment, which could force Best Buy to discount prices to stay competitive, CNBC reported.
However, Barry said during the earnings call that Best Buy won’t compete strictly on price. Fast delivery and higher-level customer service options, such as its new Totaltech membership program, for which members pay $199.99 per year for benefits that include tech support, will differentiate Best Buy from competitors — like, presumably, Amazon Prime.
Best Buy’s History and Investors
In 1966, Richard Schulze founded Best Buy, then known as Sound of Music. The name held until 1981, when a fateful tornado changed everything. After weathering the disaster, Sound of Music employees gathered in the parking lot to sell damaged goods, attracting spectators who wanted to see the storm’s aftermath as well as customers who wanted to get the “best buy.” Two years later, Sound of Music changed its tune and rebranded itself as Best Buy.
Best Buy operates more than 1,000 stores in North America as of November 2021 and has its own Best Buy credit card products. More than 80% of Best Buy’s stock is held by institutions. Financial service companies The Vanguard Group Inc. and Blackrock Inc. hold the most shares as of November, with more than 49 million shares between them.
Sean Dennison contributed to the reporting for this article.
Methodology: The GOBankingRates Evaluation assesses a company’s net worth based on the company’s total assets, total liabilities, and revenue and net income from the last three years. Base value is established by subtracting total liabilities from total assets from the company’s last full fiscal year. Income value is established by taking the average of the revenue from the last three full fiscal years, plus 10 times the average of the net profits from the last three full fiscal years, and then calculating the average of those two figures. The final GOBankingRates Evaluation number is the sum of the base value and the income value.