Here's How Much You'd Have If You Invested $1000 in Best Buy a Decade Ago

How much a stock's price changes over time is a significant driver for most investors. Not only can price performance impact your portfolio, but it can help you compare investment results across sectors and industries as well.

FOMO, or the fear of missing out, also plays a role in investing, particularly with tech giants and popular consumer-facing stocks.

What if you'd invested in Best Buy (BBY) ten years ago? It may not have been easy to hold on to BBY for all that time, but if you did, how much would your investment be worth today?

Best Buy's Business In-Depth

With that in mind, let's take a look at Best Buy's main business drivers.

Incorporated in 1966 and headquartered in Richfield, MN, Best Buy Company Inc. (BBY) is a multinational specialty retailer of consumer electronics, home office products, entertainment software, communication, food preparation, wellness, health, security, appliances and related services. The company retails technology products in the United States and Canada.

Best Buy operates through two business segments. The Domestic Segment (95.8% of Q2FY23 total revenues) is comprised of the operations, including Best Buy Health business, in all states, districts and territories of the United States under various brand names Best Buy, Best Buy Business, Best Buy Express, Best Buy Health, CST, Geek Squad, GreatCall, Lively, Magnolia and Pacific Kitchen and Home. The International Segment (4.2% of Q2FY23 total revenues) comprised operations in Canada under the brand names Best Buy, Best Buy Express, Best Buy Mobile and Geek Squad.

Domestic and International segments have offerings in six revenue categories.

Computing and Mobile Phones - computing (including desktops, notebooks and peripherals), mobile phones (including related mobile network carrier commissions), networking, tablets (including e-readers) and wearables (including smartwatches);

Consumer Electronics - digital imaging, health and fitness, home theater, portable audio and smart home;

Appliances - including dishwashers, laundry, ovens, refrigerators, blenders, coffee makers and vacuums;

Entertainment - drones, gaming, movies, music, toys, virtual reality and other software;

Services - consultation, delivery, design, health-related services, installation, memberships, repair, set-up, technical support and warranty-related services; and

Other - beverages, snacks, sundry items and other product offerings.

Bottom Line

Anyone can invest, but building a successful investment portfolio takes a combination of a few things: research, patience, and a little bit of risk. So, if you had invested in Best Buy a decade ago, you're probably feeling pretty good about your investment today.

A $1000 investment made in November 2012 would be worth $4,844.10, or a 384.41% gain, as of November 15, 2022, according to our calculations. Investors should note that this return excludes dividends but includes price increases.

In comparison, the S&P 500 gained 191.94% and the price of gold went up -0.70% over the same time frame.

Looking ahead, analysts are expecting more upside for BBY.

Shares of Best Buy have underperformed in the past six months. A challenging operating environment and softness in consumer demand are making things tough for Best Buy. It posted soft results in second-quarter fiscal 2022, wherein sales lagged the Zacks Consensus Estimate, while the top and bottom lines declined year over year. The overall sales were soft in the quarter as both the Domestic and International segments’ revenues fell year over year. Also, adverse currency translations hurt the International segment’s revenues to the tune of 420 basis points. For the third quarter, it forecasts comparable sales to drop slightly above the decline seen in the second quarter. However, Best Buy continuously focuses on improving its digital capabilities including boosting its omni-channel services, such as buy online, pickup in store services.

Over the past four weeks, shares have rallied 13.22%, and there have been 1 higher earnings estimate revisions in the past two months for fiscal 2022 compared to none lower. The consensus estimate has moved up as well.
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