Starbucks Stock Analysis (NASDAQ:SBUX)

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$57.66 $0.23 (0.4%) SBUX stock closing price Jan 20, 2017 (Closing)
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Starbucks
Updated on : Jan 20, 2017
previous close
SBUX 57.7 (0%)
S&P 500 2271.3 (0%)
Closing Price On: Jan 20, 2017
stock rating
RATING: ★★★★★★★★★★ (0/5)
Industry :
Retail-Food and Restaurants
Sector :
Retail-Wholesale
5 Quarter Revenue
Revenue Growth
2016-Q4
$billion
%
YOY GROWTH
Compared to the industry
Long Term Growth
5 Year CAGR:
12.7%
Operating Profit
Operating Margin:
19.6%
Sector Average:
5.4%
5 Quarter Net Profit
Net Margins
2016-Q4
%
LTM Margin
Compared to the industry
Debt/Equity Ratio
Debt:
3.6B
Debt/Equity Ratio:
 0.61
Compared to the industry
Cash Flow
Operating cash flow:
$1.31B
Net Income:
$801M
Dividend Yield
SBUX dividend yield:
1.39%
PROS      CONS
Recent Growth
Long Term Growth
Operating Margins
Net Margins
Cash Flow
ROIC
High Debt Burden
PE Valuation
PS Valuation
Rating: ★★★★★★★★★★ (0/5)
Relative Valuation
SBUX PS :
4
Industry PS :
0.8
Sector:   Retail-Wholesale.   *PE adjusted for one time items.
Other Metrics
Return on Invested Capital:
38.2%
Return on Equity:
49.4%
Free Cash Flow Margin:
15.7%
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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 (3.5/5)

Our Starbucks stock opinion is based on fundamentals of the company. This Starbucks stock analysis is based on latest Q4 earnings for 2016. The stock price analysis takes into account a company's valuation metrics.

Should you buy SBUX stock?

  • Starbucks's revenue growth came in at 16.2% in 2016 Q4.
  • Long term revenue growth has been strong with a 5 year compounded annual growth of .
  • Starbucks had a healthy average operating margin of 19.6% over the last 4 quarters.
  • LTM Net margins were good at 13.2% for Starbucks.
  • The company has an operating cash flow which is 1.6 times the net income. We see this as a positive signal.
  • Starbucks's return on invested capital of 38.2% is good.
  • Starbucks has a good Return On Equity (ROE) of 49.4%.
  • Starbucks has a healthy FCF (Free Cash Flow) margin of 15.7%.

Should you sell SBUX stock?

  • Starbucks has a debt/equity ratio of  0.61, which is worse than the average in the Retail-Wholesale sector.
  • The SBUX stock currently trades at a PE of 30.3, which is expensive, compared to the industry average of 19.5.
  • The company is trading at a price to sales multiple of 4, which is higher in comparison to the Retail-Food and Restaurants industry average of 0.8, making SBUX stock expensive.

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