Starbucks Stock Analysis, Valuation (NASDAQ:SBUX)
Starbucks Stock Analysis
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.