NasdaqGS:LK

Stock Analysis Report

Executive Summary

Luckin Coffee Inc. engages in the retail sale of freshly brewed drinks, and pre-made food and beverage items in the People's Republic of China.


Snowflake Analysis

High growth potential with adequate balance sheet.

Share Price & News

How has Luckin Coffee's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: LK's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

7.9%

LK

0.09%

US Hospitality

0.06%

US Market


1 Year Return

n/a

LK

6.0%

US Hospitality

19.3%

US Market

Return vs Industry: Insufficient data to determine how LK performed against the US Hospitality industry.

Return vs Market: Insufficient data to determine how LK performed against the US Market.


Shareholder returns

LKIndustryMarket
7 Day7.9%0.09%0.06%
30 Day-6.2%-1.3%1.7%
90 Day37.5%6.6%9.0%
1 Yearn/a8.7%6.0%21.8%19.3%
3 Yearn/a36.2%27.1%49.5%39.9%
5 Yearn/a48.1%32.4%73.1%54.1%

Price Volatility Vs. Market

How volatile is Luckin Coffee's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Luckin Coffee undervalued compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: LK ($41.04) is trading below our estimate of fair value ($95.89)

Significantly Below Fair Value: LK is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: LK is unprofitable, so we can't compare its PE Ratio to the Hospitality industry average.

PE vs Market: LK is unprofitable, so we can't compare its PE Ratio to the US market.


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate LK's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: LK is overvalued based on its PB Ratio (10.8x) compared to the US Hospitality industry average (2.2x).


Next Steps

Future Growth

How is Luckin Coffee forecast to perform in the next 1 to 3 years based on estimates from 9 analysts?

108.5%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: LK is forecast to become profitable over the next 3 years, which is considered faster growth than the savings rate (1.7%).

Earnings vs Market: LK is forecast to become profitable over the next 3 years, which is considered above average market growth.

High Growth Earnings: LK's is expected to become profitable in the next 3 years.

Revenue vs Market: LK's revenue (82.1% per year) is forecast to grow faster than the US market (7.6% per year).

High Growth Revenue: LK's revenue (82.1% per year) is forecast to grow faster than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: LK's Return on Equity is forecast to be low in 3 years time (19.5%).


Next Steps

Past Performance

How has Luckin Coffee performed over the past 5 years?

-55.9%

Last years earnings growth


Earnings and Revenue History

Quality Earnings: LK is currently unprofitable.

Growing Profit Margin: LK is currently unprofitable.


Past Earnings Growth Analysis

Earnings Trend: Insufficient data to determine if LK's year-on-year earnings growth rate was positive over the past 5 years.

Accelerating Growth: Unable to compare LK's earnings growth over the past year to its 5-year average as it is currently unprofitable

Earnings vs Industry: LK is unprofitable, making it difficult to compare its past year earnings growth to the Hospitality industry (-9.4%).


Return on Equity

High ROE: LK has a negative Return on Equity (-37.83%), as it is currently unprofitable.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Luckin Coffee's financial position?


Financial Position Analysis

Short Term Liabilities: LK's short term assets (CN¥6.4B) exceed its short term liabilities (CN¥1.5B).

Long Term Liabilities: LK's short term assets (CN¥6.4B) exceed its long term liabilities (CN¥93.0M).


Debt to Equity History and Analysis

Debt Level: LK's debt to equity ratio (3.7%) is considered satisfactory.

Reducing Debt: Insufficient data to determine if LK's debt to equity ratio has reduced over the past 5 years.


Balance Sheet

Inventory Level: LK has a low level of unsold assets or inventory.

Debt Coverage by Assets: LK's debt is covered by short term assets (assets are 26.8x debt).


Cash Runway Analysis

For companies that have on average been loss making in the past we assess whether they have at least 1 year of cash runway.

Stable Cash Runway: LK has sufficient cash runway for more than a year based on its current free cash flow.

Forecast Cash Runway: Insufficient data to determine if LK has enough cash runway if its free cash flow continues to grow or shrink based on historical rates.


Next Steps

Dividend

What is Luckin Coffee's current dividend yield, its reliability and sustainability?


Dividend Yield vs Market

companyn/amarketbottom25%1.4%markettop25%3.7%industryaverage3.1%forecastin3Years0%

Current dividend yield vs market & industry

Notable Dividend: Unable to evaluate LK's dividend yield against the bottom 25% of dividend payers, as the company has not reported any payouts.

High Dividend: Unable to evaluate LK's dividend yield against the top 25% of dividend payers, as the company has not reported any payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if LK's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if LK's dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of LK's dividend in 3 years as they are not forecast to pay a notable one for the US market.


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

1.8yrs

Average management tenure


CEO

Jenny Qian (42yo)

2.3yrs

Tenure

0

Ms. Zhiya Qian, also known as Jenny, has been a Director of Luckin Coffee Inc. since August 2017 and its Chief Executive Officer since November 2017. Ms. Qian served as a Director and the Chief Operating O ...


Leadership Team

NamePositionTenureCompensationOwnership
Zhiya Qian
CEO & Director2.3yrsno datano data
Reinout Schakel
CFO & Chief Strategy Officer1.1yrsno datano data
Jian Liu
COO & Director1yrsno datano data
Jinyi Guo
Senior VP of Product & Supply Chain and Director1.7yrsno datano data
Wenbao Cao
Senior VP of Store Operations & Customer Service1.7yrsno datano data

1.8yrs

Average Tenure

37yo

Average Age

Experienced Management: LK's management team is not considered experienced ( 1.8 years average tenure), which suggests a new team.


Board Members

NamePositionTenureCompensationOwnership
Zhiya Qian
CEO & Director2.3yrsno datano data
Jian Liu
COO & Director1yrsno datano data
Jinyi Guo
Senior VP of Product & Supply Chain and Director1.7yrsno datano data
Hui Li
Director1.7yrsno datano data
Sean S. Shao
Independent Director0.8yrsno datano data
Erhai Liu
Director1.3yrsno datano data
Zhengyao Lu
Chairman1.7yrsno datano data
Thomas Meier
Independent Director0.8yrsno datano data

1.5yrs

Average Tenure

49yo

Average Age

Experienced Board: LK's board of directors are not considered experienced ( 1.5 years average tenure), which suggests a new board.


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Ownership Breakdown

Dilution of Shares: LK only recently listed within the past 12 months, with total shares outstanding growing by 51114% in the past year..


Top Shareholders

Company Information

Luckin Coffee Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Luckin Coffee Inc.
  • Ticker: LK
  • Exchange: NasdaqGS
  • Founded: 2017
  • Industry: Restaurants
  • Sector: Consumer Services
  • Market Cap: US$10.389b
  • Shares outstanding: 253.15m
  • Website: https://www.luckincoffee.com

Number of Employees


Location

  • Luckin Coffee Inc.
  • Block A, Tefang Portman Tower
  • 17th Floor
  • Xiamen
  • Fujian Province
  • 361008
  • China

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
LKNasdaqGS (Nasdaq Global Select)YesSPONSORED ADSUSUSDMay 2019

Biography

Luckin Coffee Inc. engages in the retail sale of freshly brewed drinks, and pre-made food and beverage items in the People's Republic of China. It offers freshly brewed drinks, including freshly brewed coffee and non-coffee drinks; and food and beverage items, such as light meals. The company operates pick-up stores, relax stores, and delivery kitchens under the Luckin brand, as well as Luckin mobile app, Weixin mini-program, and other third-party platforms that cover the customer purchase process. As of March 31, 2019, it operated 2,370 stores, including 2,163 pick-up stores, 109 relax stores, and 98 delivery kitchens in 28 cities in the People's Republic of China. The company was founded in 2017 and is based in Xiamen, the People's Republic of China. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/21 02:49
End of Day Share Price2020/02/20 00:00
Earnings2019/09/30
Annual Earnings2018/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.