Best Buy Co., Inc. (BBY) DCF Valuation
Transparent DCF models put Best Buy Co., Inc. (BBY)'s fair value in a range of $76.08 – $81.92 — the low end is TGM's conservative base case (5% FCF growth, 10% discount), the high end the analyst consensus (FMP). Today's price of $76.04 sits below that range — by these conservative assumptions it screens as potentially undervalued.
Reverse DCF: at today's $76.04, the market is pricing in roughly +4.0%/yr free-cash-flow growth over the next decade (at a 10% required return) — versus its actual 5-year FCF CAGR of -14.5%. The price is betting on acceleration above its track record.
Current Price
$76.04
Fair-Value Range
$76.08 – $81.92
Market-Implied Growth
+4.0%/yr
vs -14.5% 5Y actual
BBY DCF Fair Value Calculator
Edit the assumptions to see how they change the estimated fair value. Illustrative model — not investment advice. Defaults to a conservative base case; the analyst (FMP) DCF, where available, is shown as a reference below.
Base inputs: FCF $1.1B · 0.21B shares · net debt $61.0M
Estimated Fair Value
$81.92
+7.7% vs $76.03
Sensitivity — fair value by discount rate × terminal growth
How the estimated fair value shifts with the discount rate (WACC) and terminal growth, holding your 5.0%/yr FCF growth and 10-year horizon fixed. Green = above today's $76.03; red = below. Your current case is outlined.
| WACC ↓ / Terminal → | 1.50% | 2.00% | 2.50% | 3.00% | 3.50% |
|---|---|---|---|---|---|
| 8.0% | $102 | $107 | $113 | $121 | $130 |
| 9.0% | $87.47 | $91.05 | $95.18 | $100 | $106 |
| 10.0% | $76.49 | $79.03 | $81.92 | $85.22 | $89.03 |
| 11.0% | $67.86 | $69.73 | $71.81 | $74.16 | $76.82 |
| 12.0% | $60.90 | $62.30 | $63.86 | $65.58 | $67.50 |
About Best Buy Co., Inc.
Best Buy Co., Inc. operates as a prominent technology retailer across the United States and Canada. Its business structure is segmented into Domestic and International operations. The company's extensive product selection includes a wide array of computing devices such as desktops, notebooks, and associated peripherals, alongside mobile phones (which generate commissions from network carriers), networking equipment, and tablets (including e-readers). Customers can also find smartwatches and various consumer electronics, encompassing digital imaging devices, health and fitness gadgets, home theater systems, portable audio solutions (like headphones and speakers), and smart home products. Beyond electronics, Best Buy also supplies household appliances such as dishwashers, laundry machines, ovens, refrigerators, blenders, coffee makers, and vacuum cleaners. For entertainment, their offerings range from drones, movies, music, and toys to gaming hardware and software, including virtual reality products. Additionally, the company stocks miscellaneous items like baby products, food and beverages, luggage, outdoor living essentials, and sporting goods. In terms of services, Best Buy provides consultation, delivery, design assistance, health-related programs, installation, membership benefits, repair work, product setup, technical support, and warranty services. Products are distributed through both physical stores and online platforms, operating under various brand names including Best Buy, Best Buy Ads, Best Buy Business, Best Buy Health, CST, Current Health, Geek Squad, Lively, Magnolia, Best Buy Mobile, Pacific Kitchen, Home, and Yardbird. Their primary online presence is via bestbuy.com, currenthealth.com, lively.com, yardbird.com, and bestbuy.ca. As of January 30, 2022, the company maintained a network of 1,144 retail locations. Originally established in 1966 as Sound of Music, Inc., the corporation is headquartered in Richfield, Minnesota.
- Sector
- Consumer Cyclical
- Industry
- Specialty Retail
- CEO
- Corie Sue Barry