Starbucks Stock Analysis (NASDAQ:SBUX)

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$56.81 $0.96 (1.72%) SBUX stock closing price Mar 24, 2017 (Closing)
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Starbucks
Updated on : Mar 24, 2017
previous close
SBUX 56.8 (0%)
S&P 500 2344 (0%)
Closing Price On: Mar 24, 2017
stock rating
RATING: ★★★★★★★★★★ (0/5)
Industry :
Retail-Food and Restaurants
Sector :
Retail-Wholesale
5 Quarter Revenue
Revenue Growth
2017-Q1
$billion
%
YOY GROWTH
Compared to the industry
Operating Profit
Operating Margin:
19.6%
Sector Average:
7.3%
5 Quarter Net Profit
Net Margins
2017-Q1
%
LTM Margin
Compared to the industry
Debt/Equity Ratio
Debt:
3.19B
Debt/Equity Ratio:
 0.55
Compared to the industry
Cash Flow
Operating cash flow:
$1.5B
Net Income:
$751.8M
Dividend Yield
SBUX dividend yield:
1.5%
PROS      CONS
Recent Growth
Operating Margins
Net Margins
Cash Flow
ROIC
ROE
High Debt Burden
PE Valuation
PS Valuation
Rating: ★★★★★★★★★★ (0/5)
Relative Valuation
SBUX PS :
3.9
Industry PS :
0.7
Sector:   Retail-Wholesale.   *PE adjusted for one time items.
Other Metrics
Return on Invested Capital:
38.8%
Return on Equity:
50.6%
Free Cash Flow Margin:
20.7%
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Starbucks Analysis Video

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View Starbucks stock analysis video. This is our SBUX analyst opinion covering the buy and sell arguments for SBUX stock.

Starbucks Corporation Stock Rating (3.6/5)

Our Starbucks stock opinion is based on fundamentals of the company. This Starbucks stock analysis is based on latest Q1 earnings for 2017. The stock price analysis takes into account a company's valuation metrics.

Should you buy SBUX stock?

  • Starbucks's revenue growth came in at 6.7% in 2017 Q1.
  • Starbucks's average operating margin of 19.6% was exceptional.
  • Net margins came in at average 13.3% for Starbucks over the last twelve months.
  • The company has an operating cash flow which is 2 times the net income.
  • Starbucks's return on invested capital of 38.8% is good.
  • The LTM ROE of 50.6% for Starbucks is attractive.
  • The company has a good Free Cash Flow (FCF) margin of 20.7%.

Should you sell SBUX stock?

  • With a debt/equity ratio of  0.55, Starbucks is highly leveraged in comparison to Retail-Wholesale peers.
  • SBUX stock is trading at a PE ratio of 29, which is worse than the industry average multiple of 18.4.
  • The company is trading at a price to sales multiple of 3.9, which is higher in comparison to the Retail-Food and Restaurants industry average of 0.7, making SBUX stock expensive.

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