Bed Bath & Beyond Inc. (NASDAQ:BBBY) March 15, 2015

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BBBY-US
Implied Price
UNDERVALUED
54.96 97.95
BA
A Price as of Close Mar 13 75.05 USD
B CapitalCube Median Implied Price 91.72 USD * CapitalCube Price is over trading range * CapitalCube Price is below trading range
CapitalCube Estimate Range 85.49 - 97.95 USD NA
52 Week Range 54.96 - 79.64 USD
Earnings Momentum Score
 0  100
BA
A Earnings Score (BBBY) 11.03
B Earnings Score(Peer Median) 43.29
Latest Filing date November 30, 2014
Fundamental Score
 0  100
BA
A Fundamental Score (BBBY) 63
B Fundamental Score(Peer Median) 59
Analysis
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Fundamental Analysis

Capital Investment Strategy The company's level of capital investment is relatively low and suggests it is milking the business. Milking the Business

Milking the Business: Companies 3 year change in Capital is below peers, but sustained Operating Returns (3-year average ROIC) is above the peer median, suggesting they are possibly under investing in a strong performing business.
The company's level of capital investment is relatively low and suggests it is milking the business.

Earnings Leverage Changes in annual revenues are in line with its chosen peers but lags in terms of earnings suggesting that the company is less cost conscious and may be spending for growth.

Changes in annual revenues are in line with its chosen peers but lags in terms of earnings suggesting that the company is less cost conscious and may be spending for growth.

Leverage & Liquidity BBBY-US has the financial and operating capacity to borrow quickly. Quick and Able

Quick and Able: Companies that have significant debt capacity with D/EV less than a 25% threshold and interest coverage greater than a 2.5x threshold, suggests ability to increase debt leverage.
BBBY-US has the financial and operating capacity to borrow quickly.

Relative Valuation Bed Bath & Beyond Inc.'s current Price/Book of 4.37 is about median in its peer group.

Bed Bath & Beyond Inc.'s current Price/Book of 4.37 is about median in its peer group.

Valuation Drivers We classify BBBY-US as Harvesting because of the market's relatively low growth expectations despite its relatively high returns. Harvesting

Harvesting: Companies with higher Operating Advantages (ROE) but lower Growth Advantages (P/E) usually suggests a focus on current operating results at the expense of long-term opportunities, so they are "Harvesting" out profits.
We classify BBBY-US as Harvesting because of the market's relatively low growth expectations despite its relatively high returns.

Drivers of Margin The company's relatively high pre-tax margin suggests tight control on operating costs versus peers.

The company's relatively high pre-tax margin suggests tight control on operating costs versus peers.

Growth Expectations While BBBY-US's revenues growth in recent years has been around the peer median, the stock's below peer median PE ratio suggests that the market likely sees the company's long-term growth prospects to be fading.

While BBBY-US's revenues growth in recent years has been around the peer median, the stock's below peer median PE ratio suggests that the market likely sees the company's long-term growth prospects to be fading.

Operations Diagnostic BBBY-US has relatively high profit margins while operating with median asset turns.

BBBY-US has relatively high profit margins while operating with median asset turns.

Sustainability of Returns BBBY-US's return on assets currently and over the past five years suggest that its relatively high operating returns are sustainable. Sustainable

Sustainable: Companies whose Return on Assets (relative to the peer median) have outperformed not only over the last year but also over the last 5 years (on average). For financials and insurance companies, we use Return on Equity.
BBBY-US's return on assets currently and over the past five years suggest that its relatively high operating returns are sustainable.

Likely Corporate Actions

Dividend Action Dividend Not Present

Dividend Not Present: Non dividend paying equity. For more information, please refer to the Corporate Actions report.
BBBY-US did not pay a dividend in the last twelve months prior to November 30, 2014. While its margins, cash flow, liquidity and leverage are good compared to its peers, the combination of valuation, relative growth expectations and share price performance raise possible questions about initiating a dividend as the best use of cash in the near-term.

Equity Action

The company's current share price is not sufficiently lower than its 52-week high (currently about 5.76% below) and does not justify a share buyback as the best use of cash at this time.

M&A Action Acquirer

Acquirer: The company could potentially acquire other companies because of its current size, valuation and capacity to absorb acquisitions. For more information, please refer to the Corporate Actions report.
BBBY-US is one of the larger companies in this peer group and thus difficult to acquire.

Dividend Quality

Dividend

BBBY-US did not pay a cash dividend to the common stock over the last twelve months prior to November 30, 2014.

Accounting Red Flags

Accounting Quality

BBBY-US's strong relative net income margin for the last twelve months combined with a level of accruals that is around peer median suggest that the reported net income is supported by a reasonable level of accruals.

Management of Reserves

The company's accrual levels over the last twelve months are positive but around the peer median suggesting the company is recording a proper level of reserves relative to its peers.

Material Categories

Excluding the effects of change in revenue, the accounting categories causing the most impact on the movement of net income from the prior period to the current period are Business Combination Reserves, Intangible Assets and Accounts Payable.
Characteristics
Key Valuation Items

Price to Book (P/B)

4.37

Price to Earnings (P/E)

14.36

Price to Sales

1.19

Price / EBITDA

7.80

Price to Assets

1.90

Price / FCF

14.14

EV / EBITDA

7.80

EV / FCF

14.15

Dividend Yield

PEG Ratio

8.91
Profitability

Gross Margin

39.08

EBIT Margin

13.19

Net Margin

8.25

FCF Margin

8.38

Operating Margin

13.19

Pre-Tax Margin

12.92

ROE

26.50

ROIC

21.25

ROA

13.97
Efficiency

Debt / Equity

47.03

Debt / Market

11.02

Debt / Book

Debt / EV

10.76

Coverage Ratio

83.53

Interest Coverage

48.80

Cash Days

38.30

Working Cap. Days

76.10

Receivable Days

0.00

Payable Days

38.13

Inventory Days

90.48

Sales / Assets

1.69
Growth

Earnings Growth YOY

-8.76

Revenue Growth YOY

0.39

Oper. CF Growth YOY

9.83

EPS Growth YOY

1.61

FCF Growth YOY

11.63
Price History

Peers

FA Score

DQ Score

close

52 week range

75.05

54.96

79.64

USD

82.15

60.47

82.96

USD

22.92

15.20

26.79

USD

12.92

11.38

19.95

USD

63.36

54.82

68.30

USD

67.99

51.91

69.87

USD

16.82

13.05

20.60

CAD

Company Profile

Bed Bath & Beyond, Inc. is a chain of retail stores that sells a wide assortment of domestic merchandise. The company and its subsidiaries operate under the names Bed Bath & Beyond, Christmas Tree Shops, Harmon and Harmon Face Values and buybuy BABY. It is with a partner in a joint venture which operates retail stores in Mexico under the name Home & More. The company sells a wide variety of domestic merchandise and home furnishings. The domestics merchandise includes categories, such as bed linens and related items, bath items and kitchen textiles. The home furnishings include categories, such as kitchen and tabletop items, fine tabletop, basic housewares, general home furnishings, consumables and certain juvenile products. The company offers a breadth and depth of selection in most of its product categories that exceeds what is generally available in department stores or other specialty retail stores. Bed Bath & Beyond was founded by Warren Eisenberg and Leonard Feinstein in 1971 and is headquartered in Union, NJ.

Closing Stock Price

USD 75.05

As of Date

March 13, 2015

One Year Performance

9.51409%

One Month Performance

-3.6709%

Industry Group

Specialty Stores

52 wk. Range

USD 54.955 - USD 79.64

Market Cap (Millions)

USD 13929.4

Total Shares Outstanding

185.601
Latest Filing Dates

Annual

February 28, 2014

Semi Annual

N/A

Quarterly

November 30, 2014

Next Release Date

April 8, 2015

Filing Currency

USD

Listed Exchange

NASDAQ
Peers


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Mar 13 3:5 AM
rahagar
4d
$BBBY Up day or another bounce off TL support looks good for a long swing. http://stks.co/s1fRb
Mar 11 12:38 AM
Capital Market Laboratories
4d
$BBBY Revenue and Earnings Trends #CML http://stks.co/j1wiG
Mar 10 8:48 PM
Capital Market Laboratories
4d
$BBBY Cash from Operations Trend #CML http://stks.co/c1ryX
Mar 10 8:13 PM
Trading Quotient Capital
5d
Mar 10 1:30 PM
TalkMarkets
5d
Time For Some Spring Cleaning $WRI $OHI $NHI $VTR $CUBE $CDR $TRI $BBBY http://stks.co/p1fVq
Mar 10 10:39 AM
Ophir Gottlieb
5d
$BBBY Revenue per Employee Trend #CML http://stks.co/j1wLR
Mar 10 6:30 AM
Ophir Gottlieb
5d
$BBBY Revenue and Earnings Trends #CML http://stks.co/f1wJM
Mar 10 5:30 AM
TalkMarkets Recap
5d
Time For Some Spring Cleaning $WRI $OHI $NHI $VTR $CUBE $CDR $TRI $BBBY http://stks.co/s1ezJ
Mar 10 4:39 AM
Capital Market Laboratories
5d
$BBBY Assets and Stock Buy-backs Trends #CML http://stks.co/e1rby
Mar 10 2:12 AM
TalkMarkets
5d
Time For Some Spring Cleaning $WRI $OHI $NHI $VTR $CUBE $CDR $TRI $BBBY http://stks.co/b1rO2
Mar 9 10:1 PM
Ophir Gottlieb
5d
$BBBY Earnings Trend #CML http://stks.co/i1w9R
Mar 9 9:30 PM
Mar 9 8:55 PM
Analyst Ratings Network
6d
Brokerage Give Consensus Hold Rating to Bed Bath & Beyond $BBBY http://stks.co/c1rIP
Mar 9 1:7 PM
Capital Market Laboratories
6d
$BBBY Advertising Margin Trend #CML http://stks.co/r1emV
Mar 9 7:45 AM
Capital Market Laboratories
8d
$BBBY Stock Buy-backs Trend #CML http://stks.co/i1vWa
Mar 7 5:45 PM
Derald Muniz
8d
Submarine Basket: $AXP $BBBY $BWA $EXPE $LL $PNRA $RENT $WYNN
Mar 7 4:46 PM
1
Capital Market Laboratories
8d
$BBBY Assets and Return on Assets Trends #CML http://stks.co/p1egx
Mar 7 11:3 AM
Capital Market Laboratories
8d
$BBBY Earnings and Revenue per Employee Trends #CML http://stks.co/f1vVf
Mar 7 4:51 AM
Mar 6 9:26 PM
Clark Joseph
9d
9 Well-Established Companies That Just Refuse to Pay Dividends $BBBY $BIIB $DG $EBAY $EA $ESRX $GOOG $UAL $URBN http://stks.co/r1eCp
Mar 6 3:37 PM
Ophir Gottlieb
9d
$BBBY Earnings and Advertising Margin Trends #CML http://stks.co/j1vDE
Mar 6 2:7 PM
Ophir Gottlieb
9d
$BBBY Revenue and EPS Trends #CML http://stks.co/p1eJI
Mar 6 12:37 PM
Capital Market Laboratories
9d
$BBBY Revenue Trend #CML http://stks.co/f1uyy
Mar 5 10:33 PM
Jeff Yaede
10d
$BBBY descending triangle, will it be trend continuation or trend reversal?
Mar 5 7:7 PM
Capital Market Laboratories
10d
$BBBY Earnings and Gross Margin Trends #CML http://stks.co/e1pzp
Mar 5 10:32 AM
Capital Market Laboratories
10d
$BBBY Revenue and Operating Margin Trends #CML http://stks.co/g1uJO
Mar 5 8:11 AM
Capital Market Laboratories
10d
$BBBY Revenue and Valuation Trends #CML http://stks.co/g1uIT
Mar 5 7:0 AM
Capital Market Laboratories
10d
$BBBY Assets Trend #CML http://stks.co/e1pwL
Mar 5 6:25 AM
Capital Market Laboratories
10d
$BBBY Earnings and Operating Margin Trends #CML http://stks.co/a1puB
Mar 5 6:1 AM
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Closing Stock Price

USD 75.05

As of Date

March 13, 2015

One Year Performance

9.51%

One Month Performance

-3.67%

Industry Group

Specialty Stores

52 wk. Range

USD 54.955 - USD 79.64

Market Cap (Millions)

USD 13,929.4

Total Shares Outstanding (Millions)

185.60
Latest Filing Dates

Annual

February 28, 2014

Semi Annual

N/A

Quarterly

November 30, 2014

Next Release Date

April 8, 2015

Filing Currency

USD

Listed Exchange

NASDAQ
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