If you look at their financials, from 2015 to 2017, EBITDA has continued to fall from $1.79B to $1.42B. Top line growth has occurred, yet net income has also declined. The cash flow statements tells us the company has remained stable on cash levels the last two years, but it may take something more to push this company back to where it once was.
Typically, a company's
financial statements are the reports that show the
financial position of the company. There are three main documents that fall into the category of financial statements. These documents include Bed Bath income statement, its balance sheet, and the statement of cash flows. Potential Bed Bath investors and stakeholders use financial statements to determine how well the company is positioned to perform in the future. Although Bed Bath investors may use each financial statement separately, they are all related. The changes in Bed Bath's assets and liabilities, for example, are also reflected in the revenues and expenses that we see on Bed Bath's income statement, which results in the company's gains or losses. Cash flows can provide more information regarding cash listed on a balance sheet, but not equivalent to net income shown on the income statement. Please read more on our
technical analysis and
fundamental analysis pages.
The goal of Bed Bath
fundamental analysis is to do accurate financial forecasts. There are several possible objectives to fundamental analysis, such as projecting of Bed Bath performance into the future periods or doing a reasonable stock valuation. The intrinsic value of Bed Bath shares is the value that is considered the true value of the share. If
the intrinsic value of Bed is higher than its market price, buying is generally recommended. If it is equal to the market price, it is recommended to hold; and if it is less than the market price, then one should sell all shares Bed Bath. Please read more on our
fundamental analysis page.
Watch out for price decline
Please consider monitoring Bed Bath on a daily basis if you are holding a position in it. Bed Bath is trading at a penny-stock level, and the possibility of delisting is much higher compared to other delisted stocks. However, just because the stock is trading under one dollar, does not mean it will be marked for deletion.
Most exchanges require public instruments, such as Bed Bath stock to be traded above the $1 level to remain listed. If Bed Bath stock price falls below $1 for 30 consecutive trading days, the exchange can delist it. Once the company reaches this point, they will be sent an initial price violation notice directly from an exchange.
How important is Bed Bath's Liquidity
Bed Bath
financial leverage refers to using borrowed capital as a funding source to finance Bed Bath Beyond ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Bed Bath financial leverage is typically calculated by taking the company's all interest-bearing debt and dividing it by total capital. So the higher the debt-to-capital ratio (i.e., financial leverage), the riskier the company. Financial leverage can amplify the potential profits to Bed Bath's owners, but it also increases the potential losses and risk of financial distress, including bankruptcy, if the firm cannot cover its debt costs. The degree of Bed Bath's financial leverage can be measured in several ways, including by ratios such as the debt-to-equity ratio (total debt / total equity), equity multiplier (total assets / total equity), or the debt ratio (total debt / total assets). Please check the
breakdown between Bed Bath's total debt and its cash.
Breaking down Bed Bath Further
Recently, there was news that the company was looked to invest in Boxed.com, which is a product shipping business for food and other items. Food delivery to homes is increasing in popularity but competition is intense. It may take more than an investment in another company to sustain Bed Bath and Beyond.
On the surface, the company still seems to be rolling and doing well enough, but we all have seen this story played out. One avenue the company must pursue is updating and driving more traffic to online sales. Online shopping is only going to increase as shipping times become less and costs are lowered. Not only that, Amazon has a subscription where you pay an annual or monthly cost and get 2-day shipping. Depending on how much you shop online, that can pay for itself quickly.
If you are paying close enough attention, watch for items such as inventory levels or news of being acquired or acquiring. Consolidation in retail may not be all that bad as it can benefit many. Value is still to be had in this market sector but diving deep into financials and future endeavors is a must.
With year end over, keep an eye out for annual reports and review those with great detail. 2018 seems to be another bull year so far, but that doesn’t mean all industries will benefit. Bed Bath and Beyond is under pressure and major changes are the only way to bring it back to where it once stood.
Building efficient market-beating portfolios requires time, education, and a lot of computing power!
The Portfolio Architect is an AI-driven system that provides multiple benefits to our users by leveraging cutting-edge machine learning algorithms, statistical analysis, and predictive modeling to automate the process of asset selection and portfolio construction, saving time and reducing human error for individual and institutional investors.
Try AI Portfolio ArchitectEditorial Staff
Nathan Young is a Senior Member of Macroaxis Editorial Board - US Equity Analysis. With years of experience in the financial sector, Nathan brings a diverse base of knowledge. Specifically, he has in-depth understanding of application of technical and fundamental analysis across different equity instruments. Utilizing SEC filings and technical indicators, Nathan provides a reputable analysis of companies trading in the United States.
View Profile This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Nathan Young do not own shares of Bed Bath Beyond. Please refer to our
Terms of Use for any information regarding our disclosure principles.
Would you like to provide feedback on the content of this article?
You can get in touch with us directly or send us a quick note via email to
editors@macroaxis.com