Price to FCFE (P/FCFE)
Free Cash Flow to Equity (FCFE)
Best Buy Co. Inc., FCFE calculation
US$ in millions
Based on: 10-K (reporting date: 2022-01-29), 10-K (reporting date: 2021-01-30), 10-K (reporting date: 2020-02-01), 10-K (reporting date: 2019-02-02), 10-K (reporting date: 2018-02-03), 10-K (reporting date: 2017-01-28).
The financial data reveals fluctuations in the cash flow metrics of the company over a six-year period.
- Cash Provided by Operating Activities (US$ in millions)
- There is a general upward trend observed from January 2017 to January 2021. The cash generated from operations increased from 2,545 million in 2017 to a peak of 4,927 million in 2021, reflecting an improvement in the company's operational efficiency or higher revenue generation during these years. However, in 2022, the cash provided by operating activities declined to 3,252 million, indicating a reduction compared to the previous year and suggesting potential challenges or changes in working capital effectiveness.
- Free Cash Flow to Equity (FCFE) (US$ in millions)
- The FCFE shows a similar pattern to operating cash flow with values increasing from 1,569 million in 2017 to a notable high of 4,190 million in 2021. This increase implies growing cash available to shareholders after accounting for capital expenditures and other investments. The drop to 2,382 million in 2022 reflects a decrease in the free cash available, which might be due to increased capital investments, changes in debt repayment, or other cash usage affecting equity holders.
Overall, both metrics show a pronounced increase culminating in 2021, followed by a significant decline in 2022. This pattern suggests that 2021 was an exceptionally strong year in terms of cash flows, while 2022 experienced a reduction that warrants further investigation into the causes, such as market conditions, operational changes, or investment activities.
Price to FCFE Ratio, Current
Best Buy Co. Inc., current P/FCFE calculation, comparison to benchmarks
| No. shares of common stock outstanding | 221,264,454 |
| Selected Financial Data (US$) | |
| Free cash flow to equity (FCFE) (in millions) | 2,382) |
| FCFE per share | 10.77 |
| Current share price (P) | 83.28 |
| Valuation Ratio | |
| P/FCFE | 7.74 |
| Benchmarks | |
| P/FCFE, Competitors1 | |
| Amazon.com Inc. | 87.60 |
| Home Depot Inc. | 14.72 |
| Lowe’s Cos. Inc. | 17.89 |
| TJX Cos. Inc. | 33.45 |
| P/FCFE, Sector | |
| Consumer Discretionary Distribution & Retail | 96.99 |
| P/FCFE, Industry | |
| Consumer Discretionary | 59.29 |
Based on: 10-K (reporting date: 2022-01-29).
1 Click competitor name to see calculations.
If the company P/FCFE is lower then the P/FCFE of benchmark then company is relatively undervalued.
Otherwise, if the company P/FCFE is higher then the P/FCFE of benchmark then company is relatively overvalued.
Price to FCFE Ratio, Historical
Best Buy Co. Inc., historical P/FCFE calculation, comparison to benchmarks
| Jan 29, 2022 | Jan 30, 2021 | Feb 1, 2020 | Feb 2, 2019 | Feb 3, 2018 | Jan 28, 2017 | ||
|---|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | 225,227,756 | 250,044,876 | 256,971,220 | 267,804,388 | 282,713,593 | 309,110,840 | |
| Selected Financial Data (US$) | |||||||
| Free cash flow to equity (FCFE) (in millions)2 | 2,382) | 4,190) | 1,807) | 1,541) | 1,407) | 1,569) | |
| FCFE per share3 | 10.58 | 16.76 | 7.03 | 5.75 | 4.98 | 5.08 | |
| Share price1, 4 | 101.84 | 118.19 | 50.69 | 71.10 | 68.92 | 44.85 | |
| Valuation Ratio | |||||||
| P/FCFE5 | 9.63 | 7.05 | 7.21 | 12.36 | 13.85 | 8.84 | |
| Benchmarks | |||||||
| P/FCFE, Competitors6 | |||||||
| Amazon.com Inc. | 240.95 | — | 55.66 | — | — | — | |
| Home Depot Inc. | 19.87 | 15.41 | 14.99 | — | — | — | |
| Lowe’s Cos. Inc. | 13.55 | 12.28 | 8.69 | — | — | — | |
| TJX Cos. Inc. | — | 10.55 | 19.71 | — | — | — | |
| P/FCFE, Sector | |||||||
| Consumer Discretionary Distribution & Retail | 51.89 | 59.10 | 38.09 | — | — | — | |
| P/FCFE, Industry | |||||||
| Consumer Discretionary | 36.19 | 82.92 | 32.04 | — | — | — | |
Based on: 10-K (reporting date: 2022-01-29), 10-K (reporting date: 2021-01-30), 10-K (reporting date: 2020-02-01), 10-K (reporting date: 2019-02-02), 10-K (reporting date: 2018-02-03), 10-K (reporting date: 2017-01-28).
1 Data adjusted for splits and stock dividends.
3 2022 Calculation
FCFE per share = FCFE ÷ No. shares of common stock outstanding
= 2,382,000,000 ÷ 225,227,756 = 10.58
4 Closing price as at the filing date of Best Buy Co. Inc. Annual Report.
5 2022 Calculation
P/FCFE = Share price ÷ FCFE per share
= 101.84 ÷ 10.58 = 9.63
6 Click competitor name to see calculations.
- Share Price Trend
- The share price experienced significant fluctuations over the analyzed period. It increased from $44.85 in early 2017 to a peak of $71.10 in early 2019, followed by a decline to $50.69 in early 2020. Subsequently, the price rose sharply to its highest point of $118.19 in early 2021 before decreasing to $101.84 in early 2022.
- FCFE per Share Trend
- Free Cash Flow to Equity (FCFE) per share showed a generally upward trend. Starting at $5.08 in early 2017, it remained relatively stable through early 2018 and 2019, with values around $5.00 to $5.75 per share. From 2020 onwards, a notable increase occurred, reaching a peak of $16.76 in early 2021, followed by a decline to $10.58 in early 2022. Despite the pullback, FCFE remained above levels observed in the earlier years.
- P/FCFE Ratio Trend
- The price-to-FCFE ratio showed considerable variability, reflecting changes in both share price and cash flow generation. The ratio rose from 8.84 in early 2017 to a high of 13.85 in early 2018, then declined to 7.21 by early 2020. It remained relatively stable near 7.05 in early 2021, despite the share price peak, suggesting a strong increase in cash flow supported the valuation. In early 2022, the ratio increased again to 9.63 as the share price dropped but FCFE also declined, indicating some valuation adjustment.
- Overall Insights
- The data indicates that cash flow generation improved substantially from 2020 to 2021, likely supporting higher valuation multiples. However, subsequent declines in both share price and FCFE in 2022 suggest some correction or normalization. The volatility in the P/FCFE ratio highlights changing market perceptions of cash flow sustainability or growth prospects. Overall, the company demonstrated growth in cash flow profitability while experiencing marked share price volatility.