Is BBBY Still a Stock to Sell in 2023?

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

BBBY – While Bed Bath & Beyond (BBBY) has been gaining traction lately, Wall Street analysts see a potential downside of nearly 60% in the near term. Moreover, the company recently initiated its latest round of layoffs. So, is BBBY still not worth buying? Let’s find out…

Bed Bath & Beyond Inc. (BBBY) recently initiated its latest round of layoffs in a desperate bid to cut its expenses. “As our strategic direction changes and we streamline our operations, it is necessary to right-size our organization to ensure we are equipped for the future. Unfortunately, this has necessitated making the difficult decision to say goodbye to some of our colleagues,” BBBY commented.

Moreover, despite declining inflation, U.S. retail sales fell more than estimated in December 2022. Reduced consumer spending and shrinking aggregate demand might limit BBBY’s growth.

BBBY has gained 31.4% over the past month. However, it has lost 75.9% over the past year and 33.7% over the past six months to close the last trading session at $3.39.

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

Weak Financials

BBBY’s net sales came in at $1.26 billion for the third quarter ended November 26, 2022, down 33% year-over-year. Its gross profit decreased 58.3% year-over-year to $278.86 million.

Moreover, its adjusted net loss increased 1,248.3% year-over-year to $331.23 million, while its adjusted loss per share came in at $3.65, up 1,360% year-over-year.

EPS Expected to Remain Negative

Analysts expect BBBY’s revenue to decrease 29.2% and 13.6% year-over-year to $5.57 billion and $4.81 billion for the current fiscal year 2023 and the next fiscal year 2024.

Its EPS is expected to increase by 53.3% per annum for the next five years. However, its EPS is expected to decline 989.8% year-over-year to negative $11.77 for the ongoing fiscal year. In addition, its EPS is expected to remain negative in 2024. Also, it missed EPS estimates in all four trailing quarters.

Negative Profitability Margins

BBBY’s trailing-12-month EBITDA and net income margins of negative 7.94% and 20.54% are lower than the industry averages of 11.09% and 5.18%.

Furthermore, its trailing-12-month ROTC and ROTA of negative 15.55% and 28.99% compared with the industry averages of 6.59% and 4.54%, respectively.

POWR Ratings Reflect Bleak Prospects

BBBY has an overall rating of F, equating to a Strong Sell in our proprietary POWR Ratings system. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.

Our proprietary rating system also evaluates each stock based on eight distinct categories.

BBBY has an F grade for Stability, in sync with its 24-month beta of 2.57.

It has a D grade for Quality, consistent with its negative profitability margins.

In the 60-stock Home Improvement & Goods industry, BBBY is ranked #58.

Click here for the additional POWR Ratings for BBBY (Growth, Value, Momentum, and Sentiment).

View all the top stocks in the Home Improvement & Goods industry here.

Bottom Line

BBBY reported bleak financials in its most recent quarter. It missed revenue and EPS estimates by 6.2% and 29.8%, respectively. Moreover, Wall Street analysts expect the stock to hit $1.36 in the near term, indicating a potential downside of 59.9%. Given the stock’s grim outlook, I think it is best to avoid BBBY.

How Does Bed Bath & Beyond Inc. (BBBY) Stack up Against Its Peers?  

While BBBY has an overall POWR Rating of F, one might consider looking at its industry peers, HNI Corporation (HNI), which has an overall A (Strong Buy) rating, and Haverty Furniture Companies, Inc. (HVT), ADT Inc. (ADT), and Bassett Furniture Industries, Incorporated (BSET), which have an overall B (Buy) rating.

BBBY shares were trading at $3.22 per share on Wednesday morning, down $0.17 (-5.01%). Year-to-date, BBBY has gained 28.29%, versus a 3.26% rise in the benchmark S&P 500 index during the same period.

About the Author: Riddhima Chakraborty

Riddhima is a financial journalist with a passion for analyzing financial instruments. With a master's degree in economics, she helps investors make informed investment decisions through her insightful commentaries. More...

More Resources for the Stocks in this Article

TickerPOWR RatingIndustry RankRank in Industry
BBBYGet RatingGet RatingGet Rating
HNIGet RatingGet RatingGet Rating
HVTGet RatingGet RatingGet Rating
ADTGet RatingGet RatingGet Rating
BSETGet RatingGet RatingGet Rating

Most Popular Stories on

How Low Could Stocks Go?

The S&P 500 (SPY) is starting to test key support levels for the first time since November 2023 given continuing signs that Fed rate cuts are getting pushed further and further into the future. This begs the question of “how low could stocks go?” 44 year investment veteran Steve Reitmeister does his level best to answer that question including a trading plan and top picks to stay one step ahead of the market. Read on below for the full story...

3 Biotech Stocks to Buy to Power Through April

The biotech sector is primed for growth, fueled by a surge in FDA approvals, anticipated M&A deals, and the integration of AI in drug discovery. So, fundamentally sound biotech stocks Theratechnologies (THTX), Harmony Biosciences (HRMY), and Shionogi & Co. (SGIOY) might be solid buys in this month. Keep reading...

Check out These 3 Internet Stocks for Potential Gains

Amplified internet usage, technological advancements, and a rising digital transformation worldwide have driven the internet industry rapidly. To that end, quality internet stocks (WIX), Tripadvisor (TRIP), and Yelp (YELP) could be solid buys now. Read on…

Top 3 Financial Services Stocks With Unstoppable Momentum

The financial services sector is set for solid growth owing to global economic trends, technological advancements making digital services more accessible, and changing consumer preferences.Therefore, investors could consider buying fundamentally strong financial services stocks Broadridge Financial Solutions (BR), Banco Macro (BMA), and Yiren Digital (YRD) as they look well-positioned to continue their momentum. Read more...

Updated 2024 Stock Market Outlook

The bull market continues to rage on with the S&P 500 (SPY) making new highs. That is the past...the question is what does the future hold? That is why 44 year investment veteran Steve Reitmeister provides this updated 2024 Stock Market Outlook to help you carve a path to outperformance the rest of the year. Read on below for the full story...

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