What to Expect from Big Lots Stock After Earnings Tomorrow

BIG has quintupled off its March lows near $10

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Discount retailer Big Lots, Inc. (NYSE:BIG) operates more than 1,400 Big Lots retail stores in 47 U.S. states. The company’s products include food, beverages, clothing, toys, furniture, and general houseware. Surprisingly, Big Lots stock has been one of the biggest winners since the stock market crash in March 2020.

Big Lots stock has more than quintupled off its 15-year March lows around $10. While carving out that channel of higher highs, the shares' 80-day moving average has contained pullbacks in the fall. Year-to-date, BIG is up 82.6%. 

BIG Stock Chart

With an earnings call looming on Dec. 4 before the open, let's examine Big Lots' recent earnings history. BIG has outperformed expectations on three of its four most recent reports. In the final quarter of 2019, Big Lots beat street expectations for earnings by $0.02. In the first quarter of 2020, Big Lots missed its expectations by a margin of $0.13. Big Lots beat expectations by a significant margin of $0.86 for the second quarter of 2020. In its most recent quarterly report, the topped expectations by $0.05.

Big Lots stock has forward dividend of $1.20 and a dividend yield 2.18%. Big Lots has consistently paid dividend to investors since 2003. The last dividend paid by Big Lots was for $0.30 per share.

From a fundamental point of view, Big Lots is in fairly good standing as a potential company worth investor interest. Big Lots stock currently trades at a price-earnings ratio of 18.33. At $33.84 per share, BIG's book value (total equity divided by total shares outstanding) isn’t too far off the current Big Lots stock price.

Big Lots' balance sheet is reasonably manageable. Additionally, the company has continued to grow its revenue throughout the pandemic, albeit at a slow rate. Sustained growth, given the circumstances, is quite an achievement. The biggest fundamental issue for Big Lots seems to be lack of consistency in net profits, which is unusual for an established company. Taking a step back, though, the company has been able to grow its net profits, on average. Big Lots' net income is up about $100 million since 2017, which should be enough reason for investors to overlook the company's short term inconsistencies.

Even after posting a significant recovery from the March crash, Big Lots stock still present decent value. However, Big Lots will likely serve dividend investors the most as a long-term investment.

Not a stock investor at the moment? Consider an options play! Big Lots stock is currently sporting a rank of 86 out of 100 on the Schaeffer's Volatility Scorecard (SVS). A high SVS reading indicates that BIG has consistently delivered bigger returns than its options implied volatility (IV) levels have predicted, meaning it may be a strong candidate for premium-buying strategies at this time.

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