BBBY Shares Boosted by Inside Buying. Should We Get in on the Action?

NASDAQ: BBBY | Bed Bath & Beyond Inc. News, Ratings, and Charts

BBBY – Leading specialty retailer Bed Bath & Beyond (BBBY) has been dealing with global supply chain disruption, and a decrease in demand as consumer confidence remains low amid inflation. However, a recent insider buying transaction boosted its share price and instilled confidence among investors about its prospects. So, would it be worth adding the stock to your portfolio now? Let’s discuss…

Bed Bath & Beyond Inc. (BBBY) owns and runs a retail store network. The firm distributes a variety of household goods, home furnishings, and other juvenile products. The company operates 953 locations and sells its items through various websites and applications.

BBBY stock soared about 22% on news that numerous company officials bought up tens of thousands of shares. Investors viewed this as a vote of confidence that the ailing store could be spared from bankruptcy. Sue Gove, the interim CEO, acquired 50,000 shares for around $230,000. According to filings, two more board members, Harriet Edelman and Jeff Kirwan, each purchased 10,000 shares for less than $5 a share.

However, the stock has declined 82.7% over the past year and 65.2% year-to-date to close yesterday’s trading session at $5.08. In addition, its shares are currently trading 83.3% below its 52-week high of $30.35, which it hit on July 22, 2021.

Investors have been bearish about BBBY’s prospects owing to its poor financials and diminishing growth. The company’s fiscal 2022 first-quarter performance was impacted by persistent macroeconomic headwinds, a shift in customer preferences, soaring inflation, supply-chain interruptions, and sales and inventory upheaval.

Here’s what could shape BBBY’s performance in the near term:

Inadequate Financials

BBBY’s revenue decreased 25.1% year-over-year to $1.46 billion for the first quarter ended May 28, 2022. Its operating loss grew 371.9% from the year-ago value to $339.16 million.

The company’s net loss surged 603% from the prior-year quarter to $357.67 million. In addition, its net cash used in operating activities came in at $383.55 million, representing a year-over-year increase of 1234.5%.

Negative Profit Margins

BBBY’s trailing-12-month gross profit margin of 31% is 15.4% lower than the industry average of 36.7%. Also, its trailing-12-month ROA, ROC, and net income margin are negative 17.5%, 6.7%, and 11.7%, respectively. Moreover, its trailing-12-month negative EBITDA margin of 1.22% compares to its industry average of 12.1%.

Consensus Rating and Price Target Indicate Potential Downside

Of the 12 Wall Street analysts that rated BBBY, eight rated it Sell, and four rated it Hold. The 12-month median price target of $4.16 indicates an 18.2% potential downside. The price targets range from a low of $1.00 to a high of $14.00.

POWR Ratings Reflect Bleak Outlook

BBBY has an overall D rating, which equates to Sell in our proprietary POWR Ratings system. The POWR ratings are calculated considering 118 different factors, with each factor weighted to an optimal degree.

Our proprietary rating system also evaluates each stock based on eight different categories. BBBY has an F for Stability and Sentiment. The stock beta of 2 is consistent with the Stability grade. In addition, consensus rating and price targets are in sync with the Sentiment grade.

Of the 63 stocks in the C-rated Home Improvements & Goods industry, BBBY is ranked #61.

Beyond what I’ve stated above, you can view BBBY ratings for Value, Growth, Momentum, and Quality here.

Bottom Line

The company’s widening losses and poor consensus price estimates are concerning. Analysts expect its EPS to decline by 4025% in the current quarter ending August 2022 and 465.7% in the current fiscal year.

In addition, the stock is currently trading below its 50-day and 200-day moving averages of $7.99 and $15.22, indicating a downtrend. So, we think the stock is best avoided now.

How Does Bed Bath & Beyond Inc. (BBBY) Stack Up Against its Peers?

While BBBY has an overall D rating, one might want to consider its industry peers, Acuity Brands Inc. (AYI) and Bassett Furniture Industries Incorporated (BSET), which have an overall A (Strong Buy) rating.


BBBY shares fell $0.09 (-1.77%) in premarket trading Thursday. Year-to-date, BBBY has declined -65.16%, versus a -19.65% rise in the benchmark S&P 500 index during the same period.


About the Author: Pragya Pandey


Pragya is an equity research analyst and financial journalist with a passion for investing. In college she majored in finance and is currently pursuing the CFA program and is a Level II candidate. More...


More Resources for the Stocks in this Article

TickerPOWR RatingIndustry RankRank in Industry
BBBYGet RatingGet RatingGet Rating
AYIGet RatingGet RatingGet Rating
BSETGet RatingGet RatingGet Rating

Most Popular Stories on StockNews.com


:  |  News, Ratings, and Charts

How Long Will This SUCKERS Rally Last?

As quickly as the S&P 500 (SPY) fell in September it has bounced as quickly to start October. Yet with inflation still raging, and the Fed likely to keep raising rates that also harms the economy...it becomes hard to get long term bullish at this time. So let’s discuss what this all means for the market outlook...trading plan...and top picks to profit in the weeks and months ahead.

:  |  News, Ratings, and Charts

Keep an Eye on These 2 Upgraded Stocks This Week

Many analysts still see the possibility of the economy avoiding a recession, despite the possibility of further aggressive interest rate hikes. Moreover, consumer confidence surged in September. Therefore, quality stocks Texas Instruments (TXN) and Energy Transfer (ET), which were recently upgraded in our proprietary rating system, could be ideal additions to your watchlist this week. Read on…

:  |  News, Ratings, and Charts

1 S&P 500 Stock to Buy Hand Over Fist and 1 to Avoid

With a recession expected by next year, investors must consider investing in stocks that will remain resilient. To that end, Kroger (KR) could be a good choice, given the inelastic demand for its products and strong fundamentals. On the other hand, it could be wise to avoid Advanced Micro Devices (AMD), given its weak fundamentals and the tech industry’s bleak near-term prospects. Read on…

:  |  News, Ratings, and Charts

3 Blockchain Stocks to Sell Before They Lose Even More Ground

Despite blockchain’s massive potential due to its decentralized nature and wide-ranging application, the macroeconomic headwinds have kept blockchain stocks under pressure along with other technology stocks. Furthermore, blockchain’s near-term prospects look bleak as cryptocurrency, its most popular use case, is witnessing significant declines amid regulation issues and increased skepticism. Hence, we think blockchain stocks Block (SQ), Digital (MARA), and Riot Blockchain (RIOT) are best avoided now to avoid further losses. Read more…

:  |  News, Ratings, and Charts

1 S&P 500 Stock to Buy Hand Over Fist and 1 to Avoid

With a recession expected by next year, investors must consider investing in stocks that will remain resilient. To that end, Kroger (KR) could be a good choice, given the inelastic demand for its products and strong fundamentals. On the other hand, it could be wise to avoid Advanced Micro Devices (AMD), given its weak fundamentals and the tech industry’s bleak near-term prospects. Read on…

Read More Stories

More Bed Bath & Beyond Inc. (BBBY) News View All

Event/Date Symbol News Detail Start Price End Price Change POWR Rating
Loading, please wait...
View All BBBY News