Ask Matt: Is Best Buy a best buy?

Q: Is Best Buy stock a best buy?

A: Commonly held wisdom says retailer Best Buy would be a casualty of online rivals. But the company is saying, "You're wrong."

Shares of the consumer electronics retailer jumped more than 15% Tuesday after a surprisingly solid performance during the just-reported quarter ended July. The bottom line tells the story best. Analysts expected the company to reported adjusted quarterly profit to fall 20% during the period. But it jumped 11% instead to 49 cents a share, says S&P Capital IQ. Revenue during the quarter fell 4% to $8.5 billion, but even that was 3% better than expected. Sales at stores open at least a year rose a strong 3.8%.

Best Buy has become somewhat of a classic value stock. The company sports a relatively low price-to-earnings ratio of 13 based on its earnings the past four quarters, well below the market's valuation of about 17.5. Meanwhile, shares are still flat over the past five years, while the Standard & Poor's 500 is up nearly 80%. Wall Street analysts seem to think the profit turnaround is around the corner. Adjusted profit is expected to fall just 1.5% this fiscal year but grow nearly 10% in fiscal 2017. Analysts say the stock is worth $41.06 a share in 18 months, which would be a best buy next to Tuesday's price of roughly $34 a share.

Paste BN markets reporter Matt Krantz answers a different reader question every weekday. To submit a question, e-mail Matt at mkrantz@usatoday.com or on Twitter @mattkrantz.