Best Buy Co., Inc. (BBY) — Fundamental Analysis & Key Financial Ratios

Kaplio's reading: Best Buy Co., Inc.

Updated on October 2, 2026 · accounts published on August 27, 2026

Reading of October 2, 2026: A highly profitable retailer with thin, steady margins and a growing dividend

Best Buy trades at a P/E of 14.6 over the last 12 months, 18 % below its sector median, with a ROIC of 17.2 % and a 4.4 % dividend yield.

• Is Best Buy expensive or cheap? Best Buy trades at a P/E of 14.6, 18 % below its sector median of 17.7 and 3 % below its own ten-year median.
• How is the business doing? Over the last 12 months EPS grew 18 % on revenue up just 0.4 %, with an operating margin of 4.4 %.
• How strong is the balance sheet? Net debt is $11.57 per share in fiscal 2026, 13 % of the price, and the 4.4 % dividend has risen for 8 years running.
• What to expect from the next earnings? Analysts expect EPS of $1.48 on November 24, 2026; Best Buy beat estimates in 7 of the last 8 quarters.
• Can the balance sheet withstand a recession? Best Buy passes 6 of 8 sector tests; it falls short on its five-year operating margin of 4.3 % and on a current ratio of 1.12.

Is Best Buy expensive or cheap?

Over the last 12 months Best Buy trades at a P/E of 14.6. That compares with a median of 17.7 across 281 companies in its sector and with its own ten-year median of 15.1. Over the last decade the stock traded at a lower P/E 43 % of the time, in a range from 6.4× to 24.7×. A free cash flow yield of 8.2 % and an EV/EBITDA of 7.9× tell the same story: an ordinary multiple, not a bargain. Peter Lynch warned that cyclicals look cheap at the top of the cycle. Today's P/E sits close to its five-year average of 13.9×, so it is neither stretched nor depressed.

How is the business doing?

Sales were flat over the last 12 months, up 0.4 %, while EPS rose 17.8 %, so profits grew much faster than revenue. The operating margin of 4.4 % is in line with the 4.3 % average for fiscal 2015-2026 and slightly above the 4.2 % of fiscal 2026. It is a thin margin that has hardly moved in a decade. Best Buy stands out on returns: a ROIC of 17.2 % over the last 12 months against a sector median of 9.2 %, and above 10 % in each of the last ten fiscal years (2017-2026). Return on equity of 42.8 % looks even higher, partly because of debt.

How strong is the balance sheet?

In fiscal 2026 Best Buy carried $19.81 of debt and $8.24 of cash per share. That leaves net debt of $11.57 per share, 13 % of the current price and 1.0× EBITDA. Debt/equity is 1.30 over the last 12 months, which also explains the high return on equity and a P/B of 5.8×. The Altman Z of 4.3 puts the company in the safe zone, and its Piotroski score is 7 out of 9. The dividend yields 4.4 % and has risen for eight consecutive fiscal years. A payout of 75 % of earnings in fiscal 2026 leaves little room for further increases if profits fall.

What to expect from the next earnings?

On August 27, 2026 Best Buy reported EPS of $1.47 against $1.39 expected, a 5.8 % beat. It has now beaten EPS estimates in 7 of the last 8 quarters. The next report is due November 24, 2026, with $1.48 expected. The 2027 EPS consensus has not moved in 17 days and stays at $6.81 across 13 analysts, and revenue forecasts are just as steady. Of the 41 analysts who cover the company, 11 recommend buying, 24 holding and 6 selling, which is a lukewarm view. The stock is up 22 % over the last 12 months and sits 7 % below its 52-week high of $94.83.

Can the balance sheet withstand a recession?

In consumer cyclicals demand falls in a downturn. That makes margins across the whole cycle, inventory, returns on capital and debt more telling than any single year's P/E. Best Buy turned its inventory 6.2× in fiscal 2026, well above the healthy level of 4× (its five-year average is 6.6×). Its five-year average ROIC of 20.3 % beats the 12 % bar, and net debt of 1.0× EBITDA is far below the 3× limit. It has two weak spots. The five-year average operating margin of 4.3 % is about half the healthy 8 %, and a current ratio of 1.12 falls short of 1.5.

How this was prepared: the data comes from companies' official filings, collected by a professional provider, and from Kaplio's analysis engine (trailing-12-month ratios, 10 years of history and sector medians computed across US-listed companies). The text is written from that data alone, every figure is checked against it before publication, and it is reviewed when the company reports results. This is not investment advice.