Since a big post-earnings rally in May 2017, it seemed like nothing could break Best Buy Co Inc (NYSE:BBY) stock out of its $50 to $60 trading range.

Best Buy stock dropped big in July on news that Amazon.com, Inc.  (NASDAQ:AMZN) would be rolling out its own Geek Squad tailored specifically to smart home installations.

Best Buy stock rebounded from that sell-off, only to drop big again in late August after second-quarter earnings hinted at elevated competition, causing gross margin weakness.

Again, Best Buy stock rebounded from that sell-off, only to drop big yet again in late September after management delivered unimpressive long-term operational growth targets at the company’s Investor Day.

And yet again, Best Buy stock rebounded from that sell-off, only to drop again in mid-October after holiday guidance disappointed investors.

Now, BBY stock is rebounding from that sell-off. But this run-up feels different. It’s bigger in magnitude, has lasted longer, and seems to have more to do with broad market excitement than anything else. Plus, BBY stock is up at new 52-week highs around $64.50.

So what now? Will this rally fade? Or is BBY set for further gains?

While broad retail strength and tax reform tailwinds could continue to push BBY stock higher in the near-term, I think this stock is starting to look overvalued at these levels.

Here’s why.

Best Buy Stock Has Good (But Not Great) Growth Prospects

Once thought of as a dead retailer, Best Buy has rebounded strongly.

Now, the company is benefiting from multiple growth tailwinds. There is huge growth in smart home tech adoption, and that likely won’t slow anytime soon. There is also an explosion in the number of Internet-of-Things (IoT) devices out there, and because all these devices are so “new,” they require in-store assistance — which is Best Buy’s bread and butter. The video game market is on fire, thanks to the Switch. Bluetooth headphone sales are surging because Apple Inc. (NASDAQ:AAPL) ditched the headphone jack. Plus, Best Buy is making a push into the appliance market at the perfect time when market share is up for grabs due to potential bankruptcies — see Sears Holdings Corp (NASDAQ:SHLD).

Some of these tailwinds, smart home tech adoption and more appliances sales, will exist into the foreseeable future. Other tailwinds will wind down next year — think video game and Bluetooth headphone sales.

But this year serves as evidence that BBY stock is a pure-play on emerging consumer tech trends. The company has successfully fought off Amazon encroachment, and will survive as the go-to consumer tech retailer into the foreseeable future.

Consequently, growth will be good. But not great. Best Buy already has a large sales base, so even strongly positive comps drive only low- to mid-single-digit revenue growth.

At best, management thinks earnings will hit $5 per share by fiscal 2021. That represents roughly 7.7% growth per year from fiscal 2018 earnings, which are supposed to be $4 per share. That makes sense as long as low- to mid-single-digit revenue growth persists alongside some margin expansion.

At this point, the question becomes: What sort of multiple is the market willing to pay for 7.7% earnings growth prospects?

The S&P 500 is trading at 20x this year’s earnings for 10.5% earnings growth prospects over the next several years. That represents a 90% premium to growth. A big reason why that premium is so large is tax reform, as it now looks more likely than ever that the corporate tax rate will come down from 35% to 20%.

Best Buy is a full taxpayer with an effective tax rate that hovers in the 30-35% range. Thus, BBY stock should trade a similar premium to the market. A 90% premium on 7.7% growth prospects implies a “fair” price-to-earnings multiple of just under 15. Call it 15.

A 15x multiple on this year’s $4 earnings estimate implies a fair value of about $60.

Bottom Line on Best Buy Stock

Retail stocks are rallying strong because it looks like retailers are in the midst of their best holiday season in recent memory. This is a rising tide that will lift all retail boats. And that includes Best Buy stock.

Moreover, big tax-paying stocks are also rallying because it looks more likely than ever that corporate tax reform is coming. This, too, is a rising tide that will lift all full taxpaying boats. Best Buy stock included.

Having said that, Best Buy stock appears to be overvalued here. I’ve loved this name for a long time, but I think the stock might be a bit ahead of itself here at $65.

As of this writing, Luke Lango was long AMZN.