Bed Bath & Beyond Inc. (NASDAQ: BBBY)

Bed Bath & Beyond, who reported their quarterly earnings after the bell closed on September 19th, 2017 have seen their shares fall  33% since January of 2017. And now, after the earnings were released shares look to be taking a huge hit in the after hours trading session due to missed earnings expectations.

The company reported an adjusted net income of +0.75 cents per share. However this was sharply lower than what analysts had been expecting which was +$0.95 per share. Revenues came in at about $2.94 billion dollars which was much lower than the $3.01 billion dollar estimate.

One interesting note is that as recent as September 14th of this year, UBS Securities had taken a neutral stance on their opinion of the share price. Perhaps they saw chinks in the armor showing up during their fundamental analysis and weren’t ready to put a buy recommendation on the shares.

BBBY Price Action

Shares have traded in a 52-week Range of a low at $26.54 to a high of $48.83. During the regular trading session on Tuesday, shares closed at $27.03 which was down $0.27 on the day.

However, after the close of the after-hours trading session shares closed at $23.58 which was down -12.76% or down -$3.45 as of 8 p.m. Eastern Daylight Time.

One positive about the company’s financials is that they pay a fairly hefty dividend of 2.09% annually. This should keep some investors in the stock at least  for the generous dividend.

Fundamental Analyst’s Comments/Statements

-It’s current Price/Book of 1.89 is about median in its peer group.

-We classify BBBY-MX as Harvesting because of the market’s relatively low growth expectations despite its relatively high returns.

-BBBY has relatively high profit margins while operating with median asset turns.
Change in the company’s annual revenues seems to be coming at the expense of earnings.

-BBBY return on assets currently and over the past five years suggest that its relatively high operating returns are sustainable.

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

-While BBBY revenue growth in recent years has been above the peer median, the stock’s P/E ratio is less than the peer median suggesting that the company’s earnings may be peaking and the market expects a decline in its growth expectations.

-The company’s level of capital investment seems appropriate to support the company’s growth.

BBBY has additional debt capacity. -Capitalcube.com

Bed Bath & Beyond Charts

The above price chart shows the 5 minute action during the regular trading session on the left and the after-hours trading session on the right in the shaded area. It is easy to see exactly when the earnings were announced and the share price dropped enormously. Shares didn’t even attempt a rally and basically flatlined afterward.

The above price chart shows Bed Bath & Beyond on a daily basis going back a few months. It is easy to see in the 3 highlighted over areas where price was rejected at the 50 period moving average. When shares open up on Wednesday they will be decisively well below this level. It may take a few quarters of good earnings before the price tests the 50 period moving average once again.