Can Best Buy Stock Recover If Markets Fall?
Best Buy (BBY) stock is down 15.1% in 21 trading days. The recent slide reflects renewed concerns around cautious Q4 guidance and softer consumer spending, but sharp drops like this often raise a tougher question: is the weakness temporary, or a sign of deeper cracks in the story?
Before judging its downturn reslience, let’s look at where Best Buy stands today.
- Size: Best Buy is a $14 Bil company with $42 Bil in revenue currently trading at $67.84.
- Fundamentals: Last 12 month revenue growth of -0.9% and operating margin of 4.2%.
- Liquidity: Has Debt to Equity ratio of 0.29 and Cash to Assets ratio of 0.05
- Valuation: Best Buy stock is currently trading at P/E multiple of 22.2 and P/EBIT multiple of 15.0
- Has returned (median) 21.5% within a year following sharp dips since 2010. See BBY Dip Buy Analysis.
These metrics point to a Weak operational performance, alongside Low valuation – making the stock Fairly Priced. For details, see Buy or Sell BBY Stock
That brings us to the key consideration for investors worried about this fall: how resilient is BBY stock if markets turn south? This is where our downturn resilience framework comes in. Suppose BBY stock falls another 20-30% to $47 – can investors comfortably hold on? Turns out, the stock has fared worse than the S&P 500 index during various economic downturns, based on (a) how much the stock fell and, (b) how quickly it recovered. Below, we dive deeper into each such downturn.
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2022 Inflation Shock
- BBY stock fell 54.5% from a high of $138.00 on 22 November 2021 to $62.85 on 20 October 2022 vs. a peak-to-trough decline of 25.4% for the S&P 500.
- The stock is yet to recover to its pre-Crisis high
- The highest the stock has reached since then is $103.30 on 30 September 2024 , and currently trades at $67.84
| BBY | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -54.5% | -25.4% |
| Time to Full Recovery | Not Fully Recovered | 464 days |
2020 Covid Pandemic
- BBY stock fell 44.9% from a high of $91.93 on 20 February 2020 to $50.69 on 23 March 2020 vs. a peak-to-trough decline of 33.9% for the S&P 500.
- However, the stock fully recovered to its pre-Crisis peak by 22 July 2020
| BBY | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -44.9% | -33.9% |
| Time to Full Recovery | 121 days | 148 days |
2018 Correction
- BBY stock fell 41.6% from a high of $82.60 on 23 August 2018 to $48.24 on 24 December 2018 vs. a peak-to-trough decline of 19.8% for the S&P 500.
- However, the stock fully recovered to its pre-Crisis peak by 10 December 2019
| BBY | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -41.6% | -19.8% |
| Time to Full Recovery | 351 days | 120 days |
2008 Global Financial Crisis
- BBY stock fell 67.4% from a high of $53.38 on 26 December 2007 to $17.42 on 20 November 2008 vs. a peak-to-trough decline of 56.8% for the S&P 500.
- However, the stock fully recovered to its pre-Crisis peak by 25 May 2017
| BBY | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -67.4% | -56.8% |
| Time to Full Recovery | 3,108 days | 1,480 days |
Feeling jittery about BBY stock? Consider portfolio approach.
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