How Surging Revenue and Store Expansion at Luckin Coffee (LKNC.Y) Have Reshaped Its Investment Story

• Luckin Coffee announced its third quarter 2025 results, reporting a 50.2% year-over-year increase in net revenues and record average monthly transacting customers, while expanding its store network to over 29,000 locations as of quarter-end.
• This expansion enabled Luckin to reach new customer records and reflects a focus on scale, product innovation, and a value proposition centered on affordability and convenience.
• We'll explore how Luckin Coffee's accelerating store expansion and customer growth influence the company's investment narrative and future outlook.

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Luckin Coffee Investment Narrative Recap

To be a Luckin Coffee shareholder today, you need conviction in the company's ability to translate rapid store expansion and surging customer growth into sustainable earnings, despite increasing operational and competitive pressures. The latest earnings update, featuring record revenues, customer numbers, and over 29,000 stores, underscores these key growth catalysts, but the report of declining operating margins means the most immediate catalyst (customer and store growth) is still tempered by ongoing profitability risks; the new data does not materially change this balance right now.

Among recent developments, Luckin’s addition of 3,008 net new stores in one quarter is particularly relevant, as it powerfully amplifies both the potential for revenue growth and the risk of overexpansion. This scale puts Luckin in a strong market position, but the rapid rollout heightens the possibility that per-store productivity could come under pressure if demand or execution falters.

However, investors should keep in mind the significant downside risk if store-level sales performance fails to keep pace with this aggressive opening schedule and...

Read the full narrative on Luckin Coffee (it's free!)

Luckin Coffee's outlook anticipates CN¥73.6 billion in revenue and CN¥6.9 billion in earnings by 2028. This is based on a projected annual revenue growth rate of 21.5% and a CN¥3.0 billion increase in earnings from the current CN¥3.9 billion.

Uncover how Luckin Coffee's forecasts yield a $48.24 fair value, a 21% upside to its current price.

Exploring Other Perspectives

Nine Simply Wall St Community fair value estimates on Luckin Coffee range widely from CN¥32.39 to CN¥71.48 per share. With many expecting customer growth to power results, be aware how mixed expansion and margin signals can shape your outlook.

Explore 9 other fair value estimates on Luckin Coffee - why the stock might be worth 19% less than the current price!

Build Your Own Luckin Coffee Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Luckin Coffee research is our analysis highlighting 3 key rewards that could impact your investment decision.
• Our free Luckin Coffee research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Luckin Coffee's overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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