Is the turnaround effort from Best Buy Co Inc. (BBY) finally getting traction? The last couple of quarters have shown promise, but this Thursday’s Best Buy earnings news could really convince a hesitant market that BBY stock is worth owning again.

The numbers released in the Best Buy earnings report will be telling, of course, but as is always the case, there’s more to the story.

The electronics retailer is projected to log its third straight increase in quarterly income, but revenue and same-store sales comparisons continue to deteriorate.

Sooner or later, one of those trends is going to break.

Best Buy Earnings Forecast

As of the latest look, analysts collectively expect Best Buy to post Q3 income of 24 cents per share of BBY stock. That’s a 33% improvements on the year ago earnings figure of 18 cents per share. Revenue, however, is projected to shrink 3.1% on a year-over-year basis, from $9.36 billion in the third quarter of 2013 to $9.08 billion this time around. Zacks reports a likely 2.1% decline in same-store sales.

For the record, Best Buy has topped earnings estimates in each of its past seven quarters, and has grown its bottom line (on a year-over-year) in its two most recently-reported quarters. The bottom-line growth suggests CEO Hubert Joly’s turnaround plan is at least getting some traction at a point when the retailer still needs to create some inspiration within the investment world.

However, the company is shrinking its way to success — slashing costs more than growing the business. The last time the Best Buy earnings report showed actual sales growth was in 2012.

That’s not necessarily a dire sign. Sometimes the first order of business in a growth plan is to just stop the bleeding. Eventually though, Best Buy shareholders are going to need to see evidence of sustainable progress. Thursday’s Best Buy earnings results may well serve as that proof, particularly if the electronics retailer appears able to meet or exceed Q4-2014 and fiscal 2015 sales and earnings forecasts.

To that end, although the company doesn’t offer guidance, the average analyst estimates for the fourth quarter of this year (currently underway) call for a profit of $1.31 per share of BBY stock and revenue of $14.23 billion. Next year should be one of firmer proof of a turnaround. Not only is full-year income expected to rise 12.9% — from $2.32 per share this year to $2.62 next year — revenues are projected to grow 0.1%, from $41.25 billion to $41.28 billion. It’s not a huge improvement, but all big trends start out as small ones.

Again, Best Buy doesn’t provide explicit guidance, so investors will need to interpret and make a judgment call based on what Joly and other members of management say in the conference call. Joly hasn’t been afraid to offer clear opinions about the business, though.

What to Watch For

While there are no clear numbers to work with to make a judgment call on BBY stock, there are some clear themes and issues that can and will impact the stock’s value through the end of next year. Investors should keep these three matters at the top of their minds as the Best Buy earnings call proceeds:

• Best Buy’s product prices are now more competitive with prices available at Amazon (AMZN), up to and including price-matching. This should prove to be a boost to the top line but crimp the bottom line, although the recovery trend to date has shown widening margins on slumping sales. Point being, there’s room on the income statement to go toe-to-toe Amazon.
• Put the term “4K television” in your lexicon. Though 4K televisions are still too costly to draw big demand, as the price goes down over the next couple of years, interest in them will grow. It matters to Best Buy because televisions are such a significant part of the company’s revenue mix.
• Consumer demand for electronics has been on the tepid side this year, and that may not change anytime soon. Best Buy can solve that problem by ensuring it positions itself as the place to shop for people who are in the market to buy electronics. That’s no small order, though.

Just keep in mind that Joly may deliberately be downplaying the company’s opportunities in order to ensure “beats” for the foreseeable future.

The Best Buy earnings results should be posted around 7:00 am EST on Thursday, with the conference call beginning at 8:00 am EST.

More From InvestorPlace

• ‘Tis the Season for These Retail Stocks
• 3 Defensive ETFs Poised for Profits
• 3 Stocks Still Benefiting From Military Spending

As of this writing, James Brumley did not hold a position in any of the aforementioned securities.