Best Buy Co Inc (NYSE:BBY) has staged one of the most impressive comebacks in retail history over the past several years. The company has gone from left-for-dead retailer being eaten alive by Amazon.com, Inc. (NASDAQ:AMZN), to a red-hot retailer with comparable sales growth consistently north of 5%.

Meanwhile, Best Buy stock has gone from $10 to $70.

On paper, that turnaround continued in late May with the company’s impressive first-quarter earnings report. BBY beat on both the top and bottom lines, while reporting comparable sales growth of 7.1%, head-and-heels above the 2.9% expected by analysts.

But Best Buy stock dropped in response to those results.

Why? Heading into the print, Best Buy stock was priced for perfection. And the quarter wasn’t perfect. E-commerce growth slowed. Margins compressed. And the guide didn’t get a meaningful lift despite the strong first quarter numbers.

What’s the smart move now? Don’t buy Best Buy stock just yet. The company is doing everything right to capitalize on secular growth trends in consumer technology. But the stock is over-priced considering margin headwinds.

Here’s a deeper look:

Good Quarter, But Not Good Enough

On the surface, Best Buy had a really good quarter. The company followed up a robust holiday quarter with an equally robust start to 2018. Comparable sales growth was a robust 7.1%, led by double-digit gains in appliances and computers/mobile phones. Total revenue growth was nearly 7%, with gains coming from the domestic and international operating segments.

Despite that strong growth, not everything was perfect about Best Buy’s quarter.

E-commerce growth was just 12%. Last quarter, it was 18%. Last year, it was 22%. In the year ago quarter, it was above 22%. In other words, e-commerce sales growth is slowing at a consistent and concerning rate.

Granted, management blames the slower growth on a tough lap (the year ago quarter had new product launches from the Switch and Samsung S8) and a blurred line between online sales and in-store sales (half of digital orders are shipped from or picked up in store). That does help explain the slowdown, but digital sales growth is still nonetheless slowing.

Meanwhile, margins continue to drop. Operating margins fell 20 basis points year-over-year to 3.3%. This continues a multi-quarter streak of margin declines, and that has a lot to do with lower margins in the slow-growth phone business.

Also, the guide didn’t get any sort of meaningful lift that was necessary to support the stock’s 15% year-to-date run heading into the report. A flat guide simply wasn’t enough to justify shares heading higher.

All together, Best Buy’s quarter was good. But not that good.

Best Buy Stock Is Too Pricey

Clearly, Best Buy is capitalizing on currently red-hot consumer technology growth trends. Owing to the company’s broad exposure to all things consumer technology, Best Buy has ample exposure to rising consumer interest in next-gen gaming and IoT technology. Therefore, as AR/VR technologies go mainstream, and as every device becomes a smart device, consumers will do more and more shopping at Best Buy.

This guarantees Best Buy a healthy top-line growth trajectory over the next several years. Moreover, margins should be able to moderate around 4.5% as phone sales take a backseat to appliance and smart device sales.

Overall, revenue growth over the next 5 years should hover around 2-3%, while operating margins should be able to normalize in the 4.5% to 5% range. Buybacks and a lower tax rate will also add firepower to earnings growth. Under those assumptions, I think Best Buy can net roughly $6.50 in earnings per share in 5 years.

A market-average 16-times forward earnings multiple on $6.50 implies a four-year forward price target of $104. Discounted back by 10% per year, that equates to a present value of just over $70.

But Best Buy stock doesn’t normally trade at 16-times forward earnings. It normally trades at 14-times forward earnings, which would imply a four-year forward price target of $91 and a present value of $62.

Bottom Line on BBY Stock

In the lower $70’s, Best Buy stock is, at best, fairly valued considering healthy growth prospects in a strengthening global consumer technology market..

As such, I’m not a buyer on this dip. I would like to see Best Buy stock dip below $70 before I start taking bites.

As of this writing, Luke Lango was long AMZN.