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Big Lots Inc. Analysis

Big Lots Inc. Analysis

19 January 2022

Big Lots is an American retailer that sells furniture, homewares, seasonal products, beauty goods, pe productst, groceries, and electronics.

As at 15 March, 2021 the company had 1,410 stores in 47 states and an e-commerce platform. Big Lots Inc. was founded in 1967 and is headquartered in Columbus, Ohio.

This is a small cap company, helped by the covid as people stayed at home and updated those categories of goods that are the main ones in Big Lots. In 2021, profit almost tripled, revenue increased by 20%, but the company managed to work out the last quarter of last year at a loss.


P/E 5.7 (current average for competitors 25.6)

P/B 1.3 (industry average 1)

P/S 0.2 (industry average 7)

Debt of $1.8 billion with current operating cash flow of $207 million

Dividends 2.8% per annum

Share Price: $42

The discounted cash flow model shows a fair price of $80.

Simply Wall Street values the company at $63.

Big Lots multipliers are very good, one of the best in the industry. The company is cheap. Last year the price accelerated above $70, but due to poor reporting, it fell to the levels of the end of 2020.

Shares are trading below the 20, 50 and 200 day averages. There is a high probability that the rate will drop a little more to $40, and from there it will begin to grow to $48.

Conclusion: the revenue or profit of this company are unlikely to change much, it is quite stable. Moreover, the management succeeded in taking advantage of the situation and paying off a large debt. The covid years helped earn Big Lots more than usual, but it seems that after a surge, revenue and profits will return to pre-covid values. At the same time, dividends are almost 3%, they are stable and are unlikely to be reduced in the coming years.

Get advice on the company’s shares:

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