Starbucks Stock Analysis, Valuation (NASDAQ:SBUX)

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$55.01 $0.14 (0.25%) SBUX stock closing price Sep 21, 2017 (Closing)
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Starbucks
Updated on : Sep 20, 2017
previous close
SBUX 55.2 (0%)
S&P 500 2508.2 (0%)
Closing Price On: Sep 20, 2017
stock rating
RATING: ★★★★★★★★★★ (0/5)
Industry :
Retail-Food and Restaurants
Sector :
Retail-Wholesale
5 Quarter Revenue
Revenue Growth
2017-Q3
$billion
%
YOY GROWTH
Compared to the industry
Operating Profit
Operating Margin:
19.4%
Sector Average:
5.6%
5 Quarter Net Profit
Net Margins
2017-Q3
%
LTM Margin
Compared to the industry
Debt/Equity Ratio
Debt:
3.94B
Debt/Equity Ratio:
 0.67
Compared to the industry
Cash Flow
Operating cash flow:
$1.15B
Net Income:
$691.6M
Dividend Yield
SBUX dividend yield:
1.72%
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 :
3.6
Industry PS :
0.7
Sector:   Retail-Wholesale.   *PE adjusted for one time items.
Other Metrics
Return on Invested Capital:
37.4%
Return on Equity:
50.2%
Free Cash Flow Margin:
13.5%
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Starbucks Stock Analysis

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View Starbucks stock analysis video. This is our 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 2017 Q3 earnings. The stock price analysis takes into account the company's valuation metrics.

Should you buy SBUX stock?

  • Starbucks's revenue growth came in at 8.1% in 2017 Q3.
  • The TTM operating margin was good at 19.4% for Starbucks.
  • LTM Net margins were good at 12.9% for Starbucks.
  • The operating cash flow looks good at 1.7 times the net income.
  • Starbucks generates a high return on invested capital of 37.4%.
  • Return On Equity (ROE) which is a measure of the company's profitability, looks great for Starbucks at 50.2%.
  • Starbucks has a healthy FCF (Free Cash Flow) margin of 13.5%.

Should you sell SBUX stock?

  • Starbucks has a debt/equity ratio of  0.67, which is worse than the average in the Retail-Wholesale sector.
  • SBUX stock is trading at a PE ratio of 26.5, which is worse than the industry average multiple of 17.6.
  • The company is trading at a price to sales multiple of 3.6, which is higher in comparison to the Retail-Food and Restaurants industry average of 0.7, making SBUX stock expensive.

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