| Snowflake Score | |
|---|---|
| Valuation | 4/6 |
| Future Growth | 2/6 |
| Past Performance | 3/6 |
| Financial Health | 2/6 |
| Dividends | 5/6 |
SBUX Stock Overview
Starbucks Corporation, together with its subsidiaries, operates as a roaster, marketer, and retailer of specialty coffee worldwide.
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Risk Analysis
Starbucks Corporation Competitors
Price History & Performance
| Historical stock prices | |
|---|---|
| Current Share Price | US$84.17 |
| 52 Week High | US$117.80 |
| 52 Week Low | US$68.39 |
| Beta | 0.94 |
| 1 Month Change | -3.69% |
| 3 Month Change | 7.76% |
| 1 Year Change | -26.24% |
| 3 Year Change | -4.75% |
| 5 Year Change | 56.71% |
| Change since IPO | 24,955.07% |
Recent News & Updates
Starbucks: Winter Is Coming
Summary SBUX's financial performance over the next three quarters will be critical to its stock valuations, given the historic winter with potentially sky-high electricity bills. Combined with the record high oil/gas and elevated food prices thus far, we expect to see a moderate pull-back in consumer discretionary spending through Q1'23. It also remains to be seen how the new CEO would perform over the tough quarters ahead, since we already see signs of sales deceleration post reopening cadence. Nothing burns like the cold. We shall see. Investment Thesis Despite Starbucks' (SBUX) optimistic guidance from its Investor Day presentation in early September, it remains to be seen if the company could survive the coming winter. The Feds have proved to be very concerned about the relatively elevated August CPI levels of 8.3%, leading to a 75 basis point hike on 21 September 2022. The future seems murky as well, with the persistent hawkish tone in the Feds commentaries potentially leading to another 75 basis points hike in November 2022. S&P Capital IQ Though SBUX may have reported decent FQ3'22 earnings with robust consumer spending trends, we may see a quick turnabout soon, since food and gas prices remain inflated for now compared to pre-pandemic levels. Its revenue growth is already showing signs of deceleration QoQ and YoY, pointing to the expected normalization from the hyper-growth experienced during the reopening cadence in 2021. Furthermore, SBUX may finally experience a short-term pullback in consumer discretionary spending over the next three quarters, significantly worsened by the elevated electricity bills over the coming winter. It would be interesting ( to say the least ) how this giant plans to survive the stormy weather, with the new CEO at its helm and the supposed "final exit" of its long-term CEO. We shall see. SBUX's Financial Health Remains Relatively Stable Thus Far S&P Capital IQ In its recent Investor Day presentation, SBUX guided massive expansion plans ahead, with capital expenditures of up to $3B for the next three years, including $450M for existing store upgrades. In addition, the company plans to build up to 2K new locations within the US, with a total of 9K stores in China and 2K in Japan by 2025. Therefore, we expect to see a moderate increase in its debt leveraging ahead from the $13.93B reported in the last quarter. Nonetheless, investors have nothing to worry about, since only $1.75B will be maturing by the end of 2023. Thereby, moderately ensuring SBUX's liquidity ahead. S&P Capital IQ Furthermore, SBUX seemed well poised for its aggressive expansion, given the robust Free Cash Flow ((FCF)) generation of $3.04B and an FCF margin of 9.5% in the LTM. Though these numbers are still shy of their pre-pandemic levels by -6.17% and -2.7 percentage points, respectively, we must also highlight the company's relatively stronger cash and equivalents of $3.18B on its balance sheet in the latest quarter. S&P Capital IQ For now, SBUX investors seem upbeat as well, due to the company's planned $20B of capital return over the next three years, in the form of dividend hikes and share buybacks. The management has guided an average of 2% dividend yield at the same time, representing notable improvements from the previous 4Y average of 1.88%. Combined with the consistent dividend hikes of 36.11% and $6.03B in share buybacks contributing to the moderation in its share count by -5.73% since FY2019, it is no wonder that the stock has performed decently, with a 5Y Total Price Return of 78% and 10Y Return of 313.1%. Mr. Market's Faith Has Been Restored - For Now S&P Capital IQ Over the next four years, SBUX is expected to report revenue and net income growth at an exemplary CAGR of 12.62% and 5.13%, in comparison to the 2Y pandemic CAGR of 5.73% and 8.03%, respectively. It is also evident that Mr. Market is relatively confident about the company's forward profitability, given the growth in its adj. net income margins from 9.4% in FY2019, to 10.1% in FY2021, and finally to 11.68% by FY2025. In the meantime, SBUX is expected to report revenues of $32.15B and net incomes of $3.33B for FY2022, representing an increase of 10.63% though a decline of -20.52% YoY, respectively. This indicates FQ4'22 revenues of $8.32B and net incomes of $926.7M, representing YoY growth of 2.2% though a decline of -47.47%, respectively. Otherwise, an excellent increase of 2.95% YoY in its net income after adjusting for the sale of its assets then. Impressive indeed, given the tougher YoY comparison due to the hyper revenue growth of 31.3% and net income of 229.21% experienced in FQ4'21. It is also remarkable that SBUX has optimistically guided a remarkable annual growth in its adjusted EPS by up to 20% through FY2025, despite the short-term worsening macroeconomics due to the rising inflation and the Fed's continuous hike in interest rates through CY2023. Furthermore, the company sees an impressive annual global comparable sales growth of up to 9% at the same time, contributing to its global revenue growth of up to 12% over the next three years.
Is It Too Late To Consider Buying Starbucks Corporation (NASDAQ:SBUX)?
Let's talk about the popular Starbucks Corporation ( NASDAQ:SBUX ). The company's shares saw a decent share price...
Starbucks: The New EV Stop
Summary Yesterday, Starbucks announced its new CEO, Laxman Narasimhan. In the latest quarterly report, Starbucks grew net revenues by 9% to a record $8.2 billion, and comparable store sales were up 3% globally. The company is facing headwinds related to rising costs due to inflation and unionization of its employees. Global coffee revenue is expected to grow annually by 7.64%. Price Target: $120.
Shareholder Returns
| SBUX | US Hospitality | US Market | |
|---|---|---|---|
| 7D | -7.8% | -10.0% | -5.2% |
| 1Y | -26.2% | -33.9% | -23.0% |
Return vs Industry: SBUX exceeded the US Hospitality industry which returned -33.9% over the past year.
Return vs Market: SBUX underperformed the US Market which returned -23.1% over the past year.
Price Volatility
| SBUX volatility | |
|---|---|
| SBUX Average Weekly Movement | 4.2% |
| Hospitality Industry Average Movement | 7.3% |
| Market Average Movement | 6.9% |
| 10% most volatile stocks in US Market | 15.8% |
| 10% least volatile stocks in US Market | 2.8% |
Stable Share Price: SBUX is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 4% a week.
Volatility Over Time: SBUX's weekly volatility (4%) has been stable over the past year.
About the Company
| Founded | Employees | CEO | Website |
|---|---|---|---|
| 1971 | 383,000 | Howard Schultz | https://www.starbucks.com |
Starbucks Corporation, together with its subsidiaries, operates as a roaster, marketer, and retailer of specialty coffee worldwide. The company operates through three segments: North America, International, and Channel Development. Its stores offer coffee and tea beverages, roasted whole beans and ground coffees, single serve products, and ready-to-drink beverages; and various food products, such as pastries, breakfast sandwiches, and lunch items.
Starbucks Corporation Fundamentals Summary
| SBUX fundamental statistics | |
|---|---|
| Market Cap | US$96.58b |
| Earnings (TTM) | US$4.17b |
| Revenue (TTM) | US$31.98b |
23.2x
P/E Ratio3.0x
P/S RatioIs SBUX overvalued?
See Fair Value and valuation analysisEarnings & Revenue
| SBUX income statement (TTM) | |
|---|---|
| Revenue | US$31.98b |
| Cost of Revenue | US$23.34b |
| Gross Profit | US$8.64b |
| Other Expenses | US$4.47b |
| Earnings | US$4.17b |
Last Reported Earnings
Jul 03, 2022
Next Earnings Date
Nov 03, 2022
| Earnings per share (EPS) | 3.63 |
| Gross Margin | 27.01% |
| Net Profit Margin | 13.03% |
| Debt/Equity Ratio | -174.7% |
How did SBUX perform over the long term?
See historical performance and comparison