Starbucks Stock Analysis, Valuation (NASDAQ:SBUX)

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$57.11 $0.09 (0.16%) SBUX stock closing price Jun 15, 2018 (Closing)

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?

  • The Year Over Year (YoY) revenue growth for Starbucks was 13.9% in 2018-03.
  • The TTM operating margin was good at 16.86 for Starbucks.
  • Net margins stood at a healthy 18.7% (average) for Starbucks in the Trailing Twelve Months.
  • Starbucks's return on invested capital of 34.7 is good.
  • The LTM ROE of 80.1 for Starbucks is attractive.

Should you sell SBUX stock?

  • With a debt/equity ratio of 1.38, Starbucks is highly leveraged in comparison to -sectordesc- peers.
  • The company has an operating cash flow which is 0.6885 times the net income. This is not a healthy sign.
  • The company is trading at a price to sales multiple of 3.4, which is higher in comparison to the Retail-Wholesale sector average of 0.8, making SBUX stock expensive.
  • The company has a negative 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.