Stock of the day: JB Hi-Fi

(AI video summary)

This video was created on 7 May 2025 for IG audiences by ausbiz.

ASX code: JBH, TPW

Retail heavyweights deliver trading updates

JB Hi-Fi reported third-quarter (Q3) sales growth of 6.5%, with comparable sales growth of 6% in Australia. Its New Zealand operations saw a 17.5% rise in total sales, while The Good Guys division achieved 4.6% growth.

Meanwhile, Temple & Webster announced a 23% revenue increase over two months. Chief executive officer (CEO) Mark Coulter noted the United States (US)-China tariff situation has benefited the business, with shipping rates down 20%.

The tortoise versus the hare

Since January 2020, JB Hi-Fi has increased approximately 160% in value, demonstrating consistent growth despite market fluctuations.

Temple & Webster shows a more volatile pattern but delivered superior returns of over 400% since early 2020. This higher volatility reflects its position as a high-growth online retailer.

Valuation and technical analysis 

JB Hi-Fi trades at a forward price-to-earnings (P/E) ratio of approximately 23, above its historical average of 14.5.

In contrast, Temple & Webster trades at a much higher P/E ratio of around 131, reflecting expectations for hypergrowth.

Technical analysis identifies $92 as a key support level for JB Hi-Fi. Both stocks were approaching all-time highs before these updates, suggesting strong momentum despite broader market challenges.

Investors might consider waiting for pullbacks before entering positions, particularly with JB Hi-Fi trading above its five-year average valuation.

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