Starbucks Stock Analysis (NASDAQ:SBUX)

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$60.06 $1.24 (2.02%) SBUX stock closing price Apr 28, 2017 (Closing)
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Starbucks
Updated on : Apr 28, 2017
previous close
SBUX 60.1 (0%)
S&P 500 2384.2 (0%)
Closing Price On: Apr 28, 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:
5.5%
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:
1.42%
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 :
4.1
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 (3.4/5)

Our Starbucks stock opinion is based on fundamentals of the company. This Starbucks stock analysis is based on latest Q2 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.
  • Starbucks had a healthy average operating margin of 19.6% over the last 4 quarters.
  • LTM Net margins were good at 13.3% for Starbucks.
  • The operating cash flow looks good at 2 times the net income.
  • Starbucks's return on invested capital of 38.8% is good.
  • Return On Equity (ROE) which is a measure of the company's profitability, looks great for Starbucks at 50.6%.
  • Starbucks has a healthy FCF (Free Cash Flow) margin of 20.7%.

Should you sell SBUX stock?

  • Starbucks has a debt/equity ratio of  0.55, which is worse than the average in the Retail-Wholesale sector.
  • Trading at a PE ratio of 30.6, SBUX stock is overvalued in comparison to industry average multiple of 19.9.
  • The company is trading at a price to sales multiple of 4.1, which is higher in comparison to the Retail-Food and Restaurants industry average of 0.7, making SBUX stock expensive.

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