Financial Management Report: Best Buy Stock Analysis and Performance

This report provides a financial analysis of Best Buy Co. Inc., focusing on its stock performance. The analysis examines the company's stock price and trading volume over a five-year period, highlighting the impact of both global and domestic events on its financial health. The report discusses factors such as revenue growth, EPS, and competition within the industry, which have influenced the stock's trajectory. It also includes figures illustrating stock performance and market expectations. The report concludes with an assessment of the stock's potential, considering both its strengths and vulnerabilities, and offers investment recommendations based on current market conditions and analyst predictions.

Running head: FINANCIAL MANAGEMENT
Financial Management
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1FINANCIAL MANAGEMENT
Table of Contents
Best Buy Co. Incorporation........................................................................................................2
Reference....................................................................................................................................4

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Best Buy Co. Incorporation
The company is listed in the New York Stock Exchange with the ticker symbol
(BBY). The current share price of the company is around $67.37 (Best Buy Share Price,
2019). The stock price of the company has been affected majorly due to the global and
business factors like the profitability of the company, changes in the revenue of the company
and the other industry factors like competition among the various other competitors in the
industry (Hafezi, Shahrabi & Hadavandi, 2015).
The analysis of the company stock performance was explained with the context of
stock price of the company and the volume, which has been driven by global and local events
where the operations of the company is based. The stock performance was analysed for a
period of 5 years. The stock has given a health return of around 23% in the last five years
showing an upward trend line but on the contrary side the volume of the stock saw a
downward trend line. The operations of the company based on a global scale and the revenue
of the company has consistently increased for the company whereby the company was
benefited from the global stronger consumer demand from various categories of products
offered by the company including mobile phones, wearable gadgets and gaming accessories.
Domestic revenue for the company was much higher which lead to the rise in the EPS
of the company by around 30% (Strauss, 2019). The stock has a great potential and is
recommended as a buy for the long-term but due to changing business and economic
conditions many analyst have recommended as ”Hold” for the stock. The stock price of the
company in the initial trend period has been due to the growing and improving financial
performance and position of the company, which lead the company report a growth of around
30%. However, on the other hand it is crucial to note that the share price of the company has
started falling and the volatility in the share price also increased with the falling or constant

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revenue base of the company and the rising selling and general administrative expenses of the
company. This ultimately reduced the margins of the company in the form of decreasing net
profit for the company in the last three quarter of recent years. The upcoming quarter
performance for the company is also expected to be lower for the company in the upcoming
quarter, which could be the key reason for recommendation by analyst (Edwards, Magee &
Bassetti, 2018).
However, the stock also a decline in the share price in the last one year with the
volume of the company also shrinking this has been due to the aggressive push by the
company to face increasing competition which ultimately is shrinking the margins of the
company (Why Has Best Buy's Stock Tanked By Nearly 30% This Year, 2019).
Figure 1: Best Buy Q4 Result Expectation
(Source: Why Has Best Buy's Stock Tanked By Nearly 30% This Year, 2019 )

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Figure 2: Stock Performance of Best Buy Co.
(Source: Best Buy Share Price, 2019)
Reference
Edwards, R. D., Magee, J., & Bassetti, W. C. (2018). Technical analysis of stock trends. CRC
press.
Hafezi, R., Shahrabi, J., & Hadavandi, E. (2015). A bat-neural network multi-agent system
(BNNMAS) for stock price prediction: Case study of DAX stock price. Applied Soft
Computing, 29, 196-210.
Best Buy Share Price. (2019). Retrieved from https://finance.yahoo.com/quote/BBY/
Strauss, L. (2019). Home Depot and Best Buy Boost Their Dividends. Retrieved from
https://www.barrons.com/articles/home-depot-and-best-buy-boost-their-dividends-
51551355201
Why Has Best Buy's Stock Tanked By Nearly 30% This Year?. (2019). Retrieved from
https://www.forbes.com/sites/greatspeculations/2018/12/27/why-has-best-buys-stock-
tanked-by-nearly-30-this-year/#2c9e42225893
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Volume