By Rob Otman
Bed Bath & Beyond (Nasdaq: BBBY) is a $6 billion company today. Investors that bought shares one year ago are sitting on a -15.25% total return. That’s below the S&P 500’s return of 19.92%.
Bed Bath & Beyond stock is underperforming the market. It’s beaten down, and it reports earnings next week. So is it a good time to buy? To answer this question, we’ve turned to the Investment U Stock Grader. Our Research Team built this system to diagnose the financial health of a company.
Our system looks at six key metrics…
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✗ Earnings-per-Share (EPS) Growth: Bed Bath & Beyond reported a recent EPS growth rate of -3.63%. That’s below the specialty retail industry average of 62.65%. That’s not a good sign. We like to see companies that have higher earnings growth.
✓ Price-to-Earnings (P/E): The average price-to-earnings ratio of the specialty retail industry is 18.26. And Bed Bath & Beyond’s ratio comes in at 8.03. It’s trading at a better value than many of its competitors.
✓ Debt-to-Equity: The debt-to-equity ratio for Bed Bath & Beyond stock is 54.85%. That’s below the specialty retail industry average of 73.96%. The company is less leveraged.
✗ Free Cash Flow per Share Growth: Bed Bath & Beyond’s FCF has been lower than that of its competitors over the last year. That’s not good for investors. In general, if a company is growing its FCF, it will be able to pay down debt, buy back stock, pay out more in dividends and/or invest money back into the business to help boost growth. It’s one of our most important fundamental factors.
✓ Profit Margins: The profit margin of Bed Bath & Beyond comes in at 7.6% today. And generally, the higher, the better. We also like to see this margin above that of its competitors. Bed Bath & Beyond’s profit margin is above the specialty retail average of 6.11%. So that’s a positive indicator for investors.
✓ Return on Equity: Return on equity gives us a look at the amount of net income returned to shareholders. The ROE for Bed Bath & Beyond is 25.69%, and that’s above its industry average ROE of 19.03%.
Bed Bath & Beyond stock passes four of our six key metrics today. That’s why our Investment U Stock Grader rates it as a Buy With Caution.
Please note that our fundamental factor checklist is just the first step in performing your own due diligence. There are many other factors you should consider before investing. That’s why The Oxford Club offers more than a dozen newsletters and trading advisories all aimed at helping investors grow and maintain their wealth. For more details, click here. …read more
Source:: Investment You
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