Bed Bath & Beyond (BBBY:NAS) Fundamental Valuation Report

Fundamental Valuation Report

Bed Bath & Beyond(BBBY:NAS)

Consumer Cyclical:Specialty Retail

This Report was generated using the valuation tools available on For a free 30 day trial click here.

Close Price/Date
$15.08 (USD) 13/05/2019

Weighted Valuation
$18.00 (USD)

Overall Rating
Undervalued by 19.4%

Valuation Models Analyst Consensus: $18.00 (USD)
(in order of importance)
Valuation Methods This company is:
Cash Flow: Undervalued on a Cash Flow Valuation
Comparable Company: Undervalued on a Comparable Valuation
Asset: Undervalued on an Asset Valuation

Company Overview (BBBY:NAS USD)

Price 15.08
Range 14.66 – 16.17
52 week 10.62 – 21.23
Open 16.07
Vol / Avg. 9.49M/4.64M
Mkt cap 1.99B
P/E 7.84
Div/yield 0.63/0.04
EPS -1.02
Shares 132.09M
Beta 1.13

Company Description

Bed Bath & Beyond is a home furnishings retailer, operating around 1,530 stores in all 50 states, Puerto Rico, Canada, and Mexico. Stores carry an assortment of branded bed and bath accessories, kitchen textiles, and cooking supplies. In addition to 994 Bed Bath & Beyond stores, the firm operates 277 Cost Plus stores, 124 Buybuy Baby stores, 81 Christmas Tree Shops and And That Stores (gifts/housewares), 55 Harmon Face Values stores (health/beauty care), linens/textile wholesaler Linen Holdings, and online retailers OneKingsLane, Personalizationmall, and Ofakind.

Valuation Details

 We have up to 6 valuation points for each company. Details are at the bottom of the report.

Discounted Cash Flow and Sensitivity Analysis for BBBY:NAS

Using a discounted cash flow model we generated an intrinsic value of $63.03 (USD) for BBBY:NAS

Sensitivity Analysis

(showing how changes in the input variables impact the DCF calculation)

BBBY:NAS Current Values Valuation If Dropped * Valuation If Raised *
Calculated Value: $63.03 1% 5% 1% 5%
WACC (or Ke) 8.65 $78.85 $51.96
Terminal Growth Rate 3.00 $53.06 $77.28
Tax Rate 0.12 $67.47 $58.59
Cash Flow 716,571,000 $59.14 $66.91
Capital Expenditures 2,236,600 $63.04 $63.02
Long Term Debt 1,491,370,000 $63.59 $62.46

* Changes are absolute: ex WACC from 8% to 7%

Comparables Model

Using similar companies and price based ratios we generated a valuation of $27.41 (USD) for BBBY:NAS. We also generated a valuation of $43.10 (USD) using other metrics and comparables.
The comparable companies were Murphy USA (MUSA:NYS), Dick’s Sporting Goods (DKS:NYS) and Williams-Sonoma (WSM:NYS).

Company BBBY:NAS End Date Value
Earnings/Share ($1.02) (USD)
Book Value/Share $19.38 (USD)
Sales/Share $89.57 (USD)
Cash Flow/Share $6.84 (USD)
EBITDA/Share $5.67 (USD)
Price Based on Comps Adjustment Factor (%)
$0.00 (USD) -65.1
$59.29 (USD) -26.8
$43.56 (USD) -29.7
$37.61 (USD) -58.1
$38.15 (USD) -43.7
BBBY:NAS Ratios Used Average Values MUSA:NYS DKS:NYS WSM:NYS
0.00 PE Ratio 13.71 15.60 11.42 14.12
0.86 PB Ratio 3.06 3.45 1.85 3.88
0.19 PS Ratio 0.49 0.20 0.43 0.83
2.44 PCF Ratio 7.12 8.20 5.13 8.03
3.55 EV to EBITDA 6.73 8.01 5.05 7.12


Using a multiples approach we generated a valuation of  $37.55 (USD) for BBBY:NAS

Company BBBY:NAS End Date Value
Earnings/Share ($1.02) (USD)
Book Value/Share $19.38 (USD)
Sales/Share $89.57 (USD)
Cash Flow/Share $6.84 (USD)
EBITDA/Share $5.67 (USD)
Price Based on Comps Adjustment Factor
$0.00 (USD) 0
$43.41 (USD) 0
$44.81 (USD) 0
$37.02 (USD) 0
$24.94 (USD) 0
Ratios Ratio Average
PE Ratio 8.20
PB Ratio 2.24
PS Ratio 0.50
PCF Ratio 5.41
EV to EBITDA 4.40

Adjusted Book Value versus Historical Price to Book

The average the Price to Book ratio for  BBBY:NAS for the last 10 years was  2.35

We ran the Adjusted Book Value for  BBBY:NAS and generated a book value of  $19.36 (USD)
By multiplying these we get an adjusted valuation of  $45.57 (USD)

Analyst Data

In the Stockcalc database there are 2 analysts that provide a valuation for BBBY:NAS. The 2 analysts have a concensus valuation for BBBY:NAS for 2020 of $18.00 (USD).

BBBY:NAS Bed Bath & Beyond

Analyst Recommendation
Buy Hold Sell Rating
(of 5)
Guidance As Of
0 3 1 2.5000 Underperform 2019-5-10

Current Price: 15.08 USD

Analyst Consensus
USD Millions 2020 2021 2022
Mean EPS 2.00 2.40 2.84
# EPS Analysts 4 3 1
Mean Revenue 11,560.70 11,400.30 11,345.10
# Revenue Analysts 3 2 1
Mean Target Price 18.00
Mean Cash Flow 4.95 6.31 5.99
Mean EBITDA 727.80 728.60 695.70
Mean Net Income 250.10 263.20 261.70
Mean Debt Outstanding 833.00 867.40 521.90
Mean Tax Rate
Mean Growth Rate -14.41
Mean Capital Expenditure 365.80 317.50 283.60

Explanation of Valuation Models

We have up to 6 valuation points for each company in the database.
The Discounted Cash Flow (DCF) valuation is a cash flow model where cash flow projections are discounted back to the present to calculate value per share. DCF is a common valuation technique especially for companies undergoing irregular cash flows such as resource companies (mining, forestry, oil and gas) going though price cycles or smaller companies about to generate cash flow (junior exploration companies, junior pharma, technology firms…).
The Price Comparables valuation is the result of valuing the company we are looking at on the basis of ratios from selected comparable companies: Price to Earnings, Price to Book, Price to Sales, Price to Cash Flow, Enterprise Value (EV) to EBITDA. Each of these ratios for the selected comparable companies are averaged and multiplied by the values for the company we are interested in to calculate a value per share for our selected company.
We have included the Other Comparables as a way to value companies that cannot be valued using Earnings based ratios. This technique is very useful for companies still experiencing negative cash flows such as mining exploration firms. We use Cash/Share, Book Value/Share, MarketCap, 1 Year Return, NetPPE as the ratios here. Each of these ratios for the selected comparable companies are averaged and multiplied by the values for the company we are interested in to calculate a value per share for our selected company.
Multiples are similar to Price comparables where we look at current or historic ratios for the company in question to assess what it should be worth today based on those historic ratios. We use the same 5 ratios as in the price comparables and value the company with its historic averages.
With Adjusted Book Value (ABV) we calculate the book value per share for the company based on its balance sheet and multiply that book value per share by its historical price to book ratio to calculate a value per share.
If we have Analyst coverage for the company we use the consensus target price here.

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