Switch to:
Best Buy Co Inc (NYSE:BBY)
Intrinsic Value (DCF Projected)
$34.10 (As of Today)

Since the intrinsic value calculations based on Discounted Cash Flow Intrinsic Value (DCF), or Discounted Earnings (DCE) Intrinsic Value (DE) cannot be applied to companies without consistent revenue and earnings, GuruFocus developed a valuation model based on normalized Discounted Cash Flow and Book Value of the company. The details of how we calculate the intrinsic value of stocks are described in detail here.

As of today, Best Buy Co Inc's DCF projected intrinsic value is $34.10. The stock price of Best Buy Co Inc is $24.49. Therefore, Best Buy Co Inc's Price to Intrinsic Value (DCF Projected) Ratio of today is 0.7.

BBY' s 10-Year Price to Intrinsic Value (DCF Projected) Range
Min: 0.4   Max: 3.39
Current: 0.7

0.4
3.39

During the past 13 years, the highest Price to Intrinsic Value (DCF Projected) Ratio of Best Buy Co Inc was 3.39. The lowest was 0.40. And the median was 1.35.

BBY's Price to Intrinsic Value (DCF Projected) is ranked higher than
88% of the 551 Companies
in the Global Specialty Retail industry.

( Industry Median: 1.20 vs. BBY: 0.70 )

Definition

Since the intrinsic value calculations based on Discounted Cash Flow Intrinsic Value (DCF), or Discounted Earnings (DCE) Intrinsic Value (DE) cannot be applied to companies without consistent revenue and earnings, GuruFocus developed a valuation model based on normalized Discounted Cash Flow and Book Value of the company.

The details of how we calculate the intrinsic value of stocks are described in detail here.

This method smooths out the free cash flow over the past 6-7 years, multiplies the results by a growth multiple, and adds a portion of total equity.

Value = ((Growth Multiple)*Free Cash Flow(6 year avg) + 0.8*Total Equity(most recent))/Shares Outstanding

In the case of negative total equity, the following formula is used (see the Total Equity section for the reason):

Value = ((Growth Multiple)*Free Cash Flow(6 year avg) + Total Equity(most recent)/0.8)/Shares Outstanding


Here Best Buy Co Inc's FCF(6 year avg) is calculate as

Best Buy Co Inc Quarterly Data

201108201111201202201204201207201210201304201307201310201401
total_freecashflow 4885516238-776-105-179-103184645
200902200905200908200911201002201005201008201011201102201105
total_freecashflow 1,581-2391672821,3818-2662744301,122
200802200805200808200811
total_freecashflow 566-281-171-555

Add all the Free Cash Flow together and divide 6 will get Best Buy Co Inc's FCF(6 year avg) = $934.67.

Best Buy Co Inc's DCF Projected Intrinsic Value for today is calculated as

Intrinsic Value=(Growth Multiple*Free Cash Flow(6 year avg)+Total Equity(Jan14)*0.8)/Shares Outstanding
=(9.52035159596*934.666666667+3986*0.8)/354.500
=34.10

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.


Explanation

The growth multiple is capped between 8.35 and 17.74.

Total equity weighting is more art than science and it should always be revisited in more detail when researching a company. Weightings from 0% to 100% to more than 100% are possible. 80% was chosen as a happy medium after taking the above ideas into consideration. Learn more here.

Best Buy Co Inc's Price to DCF Projected Intrinsic Value Ratio for today is calculated as

Price to DCF Projected Intrinsic Value=Share Price/DCF Projected Intrinsic Value
=24.49/34.0963477904
=0.72

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.


Related Terms

Intrinsic Value (DE), Intrinsic Value (DCF), Free Cash Flow


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

Best Buy Co Inc Annual Data

Feb04Feb05Feb06Feb07Feb08Feb09Feb10Feb11Feb12Jan14
iv_dcf_share 16.8824.7329.2635.5040.2744.9952.0949.6361.6234.10

Best Buy Co Inc Quarterly Data

Aug11Nov11Feb12Apr12Jul12Oct12Apr13Jul13Oct13Jan14
iv_dcf_share 61.8962.7761.6266.3951.1743.4034.4736.2335.2834.10
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)
Free 7-day Trial
FEEDBACK
Hide