DCF Tool

BBY

Best Buy Co. Inc. – Electronics Stores
Best Buy is a leading provider of technology products, services and solutions. The company offers expert service at an unbeatable price more than 1.5 billion times a year to the consumers, small business owners and educators who visit our stores, engage with Geek Squad agents or use BestBuy.com or the Best Buy app. The company has operations in the U.S and Canada, where more than 70 percent of the population lives within 15 minutes of a Best Buy store, as well as in Mexico where Best Buy has a physical and online presence.
Analysis Results
Intrinsic Value $426.41
Latest Price $65.41
Relative Value 85% undervalued
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Cash Flow (Billions)
Analysis Parameters
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Analysis Details
Growth Rate Projection

An exponential growth model was fit to the past cash flow data, giving more weight to more recent years. This model determined a growth rate estimate of 27.0%.

Weighted Average Cost of Capital (WACC)

The calculated WACC is 9.1%. This value is used as the default discount rate.

Value of Future Flows

Assuming a growth rate of 27.0%, the cash flows for the next 5 years are projected.

The present value of each year's flow is adjusted to present value using the discount rate.

Year Future flow (billion) Present value (billion)
2022 3.37 3.09
2023 4.28 3.59
2024 5.43 4.18
2025 6.89 4.87
2026 8.75 5.66
Terminal Value

Assuming a growth rate after the projection years of 2.0%, the terminal value of the company would be 126 billion. This corresponds to a present value of 74.6 billion.

Intrinsic Value Per Share

The total present value of the projected cash flows is 21.4 billion. Adding in the terminal value gives a total present value of 96.0 billion.

There are presently 225.0 million outstanding shares, so the intrinsic value per share is 426.41.

Financial Statements

The following data was to determine the past cash flows.

Current Assets 10,539,000,000
Current Cash 2,936,000,000
Current Liabilities 10,674,000,000
Current Debt 13,000,000
Non-Cash Working Capital (NCWC) -3,058,000,000
Change in NCWC 293,000,000
EBIT 3,009,000,000
Tax Provision 574,000,000
Depreciation and Amortization 869,000,000
Capital Expenditure -737,000,000
Unlevered Free Cash Flow 2,863,601,717
Current Assets 12,540,000,000
Current Cash 5,494,000,000
Current Liabilities 10,521,000,000
Current Debt 124,000,000
Non-Cash Working Capital (NCWC) -3,351,000,000
Change in NCWC -1,933,000,000
EBIT 2,645,000,000
Tax Provision 579,000,000
Depreciation and Amortization 839,000,000
Capital Expenditure -713,000,000
Unlevered Free Cash Flow 193,719,394
Current Assets 8,857,000,000
Current Cash 2,229,000,000
Current Liabilities 8,060,000,000
Current Debt 14,000,000
Non-Cash Working Capital (NCWC) -1,418,000,000
Change in NCWC -851,000,000
EBIT 2,050,000,000
Tax Provision 452,000,000
Depreciation and Amortization 812,000,000
Capital Expenditure -743,000,000
Unlevered Free Cash Flow 803,072,754
Current Assets 8,870,000,000
Current Cash 1,980,000,000
Current Liabilities 7,513,000,000
Current Debt 56,000,000
Non-Cash Working Capital (NCWC) -567,000,000
Change in NCWC 10,000,000
EBIT 1,946,000,000
Tax Provision 424,000,000
Depreciation and Amortization 770,000,000
Capital Expenditure -819,000,000
Unlevered Free Cash Flow 1,469,974,576
Current Assets 9,829,000,000
Current Cash 3,133,000,000
Current Liabilities 7,817,000,000
Current Debt 544,000,000
Non-Cash Working Capital (NCWC) -577,000,000
Change in NCWC -94,000,000
EBIT 1,853,000,000
Tax Provision 818,000,000
Depreciation and Amortization 683,000,000
Capital Expenditure -688,000,000
Unlevered Free Cash Flow 919,793,065
Current Assets 10,516,000,000
Current Cash 3,921,000,000
Current Liabilities 7,122,000,000
Current Debt 44,000,000
Non-Cash Working Capital (NCWC) -483,000,000
Change in NCWC -558,000,000
EBIT 1,893,000,000
Tax Provision 609,000,000
Depreciation and Amortization 654,000,000
Capital Expenditure -582,000,000
Unlevered Free Cash Flow 772,177,863
Current Assets 9,886,000,000
Current Cash 3,281,000,000
Current Liabilities 6,925,000,000
Current Debt 395,000,000
Non-Cash Working Capital (NCWC) 75,000,000
Change in NCWC -30,000,000
EBIT 1,576,000,000
Tax Provision 503,000,000
Depreciation and Amortization 657,000,000
Capital Expenditure -649,000,000
Unlevered Free Cash Flow 948,864,122
Current Assets 11,729,000,000
Current Cash 3,888,000,000
Current Liabilities 7,777,000,000
Current Debt 41,000,000
Non-Cash Working Capital (NCWC) 105,000,000
Change in NCWC -150,000,000
EBIT 1,455,000,000
Tax Provision 141,000,000
Depreciation and Amortization 656,000,000
Capital Expenditure -561,000,000
Unlevered Free Cash Flow 1,252,087,238
Current Assets 10,485,000,000
Current Cash 2,901,000,000
Current Liabilities 7,436,000,000
Current Debt 107,000,000
Non-Cash Working Capital (NCWC) 255,000,000
Change in NCWC -591,000,000
EBIT 1,299,000,000
Tax Provision 398,000,000
Depreciation and Amortization 716,000,000
Capital Expenditure -547,000,000
Unlevered Free Cash Flow 401,377,184
Current Assets 10,297,000,000
Current Cash 1,199,000,000
Current Liabilities 8,855,000,000
Current Debt 603,000,000
Non-Cash Working Capital (NCWC) 846,000,000
Change in NCWC -894,000,000
EBIT 2,350,000,000
Tax Provision 709,000,000
Depreciation and Amortization 945,000,000
Capital Expenditure -766,000,000
Unlevered Free Cash Flow 37,540,747

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