• 简

    • -+ 0.00%
    -+ 0.00%
    -+ 0.00%

    How Best Buy’s Shift to Higher-Margin Services and Memberships At Best Buy (BBY) Has Changed Its Investment Story

    Simply Wall St·01/07/2026 23:34:40
    语音播报
    • In recent months, Best Buy highlighted its disciplined holiday promotional approach and emphasis on higher-margin services and memberships, aiming to protect profitability despite a challenging retail backdrop.
    • This renewed focus on service-based offerings and margin resilience has drawn attention to how Best Buy may balance sales growth with earnings quality over time.
    • We’ll now examine how Best Buy’s push into higher-margin services and memberships could influence its existing investment narrative.

    The latest GPUs need a type of rare earth metal called Dysprosium and there are only 39 companies in the world exploring or producing it. Find the list for free.

    Best Buy Investment Narrative Recap

    To own Best Buy, you need to believe the company can offset pressures in lower margin electronics with healthier earnings from services, memberships and vendor support. The recent news about disciplined holiday promotions and a tilt toward higher margin offerings supports that thesis and may help the key short term catalyst of margin stability, but it does not remove the core risk that mix shifts, promotions and competition could still pressure gross profit.

    Among recent announcements, the continued commitment to a US$0.95 quarterly dividend stands out in this context, because it highlights management’s focus on returning cash to shareholders while working through softer earnings and margin compression. For investors, this sits alongside the push into higher margin services as a key part of how Best Buy is trying to balance current profitability with future reinvestment, even as online competition and direct to consumer brands test the resilience of its store centric model.

    Yet behind this push into services, investors should still be aware of the risk that heavier exposure to lower margin categories and intense promotions could...

    Read the full narrative on Best Buy (it's free!)

    Best Buy's narrative projects $44.5 billion revenue and $1.5 billion earnings by 2028. This requires 2.3% yearly revenue growth and roughly a $700 million earnings increase from $778.0 million today.

    Uncover how Best Buy's forecasts yield a $83.57 fair value, a 21% upside to its current price.

    Exploring Other Perspectives

    BBY 1-Year Stock Price Chart
    BBY 1-Year Stock Price Chart

    Six fair value estimates from the Simply Wall St Community span roughly US$65 to US$147 per share, showing how far apart individual views can be. Against this spread, the focus on higher margin services as a potential earnings support invites you to weigh how such initiatives might influence Best Buy’s ability to handle pricing pressure and online competition over time.

    Explore 6 other fair value estimates on Best Buy - why the stock might be worth over 2x more than the current price!

    Build Your Own Best Buy Narrative

    Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

    Seeking Other Investments?

    Early movers are already taking notice. See the stocks they're targeting before they've flown the coop:

    This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.