Starbucks Stock Analysis, Valuation (NASDAQ:SBUX)

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$57.68 $0.19 (0.33%) SBUX stock closing price May 24, 2018 (Closing)
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Starbucks
Updated on : May 24, 2018
previous close
SBUX 57.7 (0%)
S&P 500 2727.8 (0%)
Closing Price On: May 24, 2018
stock rating
RATING: ★★★★★★★★★★ (0/5)
Industry :
Retail-Food and Restaurants
Sector :
Retail-Wholesale
5 Quarter Revenue
Revenue Growth
2018-Q2
$billion
%
YOY GROWTH
Compared to the industry
Operating Profit
Operating Margin:
16.9%
Sector Average:
5.4%
5 Quarter Net Profit
Net Margins
2018-Q2
%
LTM Margin
Compared to the industry
Debt/Equity Ratio
Debt:
6.53B
Debt/Equity Ratio:
 1.39
Compared to the industry
Cash Flow
Operating cash flow:
$454.5M
Net Income:
$660.1M
Dividend Yield
SBUX dividend yield:
1.91%
PROS      CONS
Recent Growth
Operating Margins
Net Margins
ROIC
ROE
High Debt Burden
Cash Flow
FCF Margin
PS Valuation
Rating: ★★★★★★★★★★ (0/5)
Relative Valuation
SBUX PS :
3.5
Industry PS :
0.8
Sector:   Retail-Wholesale.   *PE adjusted for one time items.
Other Metrics
Return on Invested Capital:
34.7%
Return on Equity:
80.1%
Free Cash Flow Margin:
-6.8%
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Starbucks Stock Analysis

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Watch the robo advisor video of Starbucks stock analysis on Amigobulls. This is our analyst opinion covering the buy and sell arguments for SBUX stock.

Note: Amigobulls stock rating is our opinion based on the historical performance of the company's fundamentals. It is not indicative of the future performance of the stock.

Starbucks Corporation Stock Rating 3.1/5

Amigobulls SBUX stock analysis uses latest quarter 2018 Q2 financial data like Starbucks revenue growth, profit margins and cash flows. Starbucks valuation analysis is based on relative valuation multiples like PE ratio and price to sales ratio. Our Starbucks stock rating is based on company's fundamentals like balance sheet risk and cash flow position.

Should you buy SBUX stock?

  • Starbucks sales grew by 13.9% year on year in 2018 Q2.
  • Starbucks had a healthy average operating margin of 16.9% over the last 4 quarters.
  • LTM Net margins were good at 18.7% for Starbucks.
  • Starbucks generates a high return on invested capital of 34.7%.
  • Starbucks has a good Return On Equity (ROE) of 80.1%.

Should you sell SBUX stock?

  • Starbucks is debt laden and has a high debt/equity ratio of  1.39.
  • Cash flow from operations is low at 0.7 times the net income.
  • SBUX stock is trading at a PS multiple of 3.5, which is a negative when compared to the Retail-Food and Restaurants industry average multiple of 0.8.
  • Starbucks has a negative FCF (Free Cash Flow) margin of -6.8%.

Comments on this video and Starbucks stock

Investors can use Amigobulls Starbucks stock analysis as a tool to arrive at accurate conclusions regarding financial health of the company and its valuation. Fundamental analysis of a company is the most often used approach to find the intrinsic value of a stock.

Starbucks revenue growth and profit or net income are the main underlying forces which could detremine the direction of the share price. Technical analysis comes in handy to check whether the market sentiment is in line with the fundamental picture of the company.