Starbucks Stock Analysis (NASDAQ:SBUX)

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$55.85 $0.04 (0.07%) SBUX stock closing price Mar 23, 2017 (Closing)
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Starbucks
Updated on : Mar 23, 2017
previous close
SBUX 55.9 (0%)
S&P 500 2346 (0%)
Closing Price On: Mar 23, 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:
1.52%
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 :
3.8
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 sales grew by 6.7% year on year in 2017 Q1.
  • The TTM operating margin was good at 19.6% for Starbucks.
  • 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 has an attractive ROIC (Return on Invested Capital) of 38.8%
  • The LTM ROE of 50.6% for Starbucks is attractive.
  • The company has a healthy free cash flow 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.
  • Trading at a PE ratio of 28.5, SBUX stock is overvalued in comparison to industry average multiple of 18.7.
  • The company is trading at a price to sales multiple of 3.8, which is overvalued in comparison to the Retail-Food and Restaurants industry average multiple of 0.7.

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