Starbucks (SBUX) Analysis

This report is auto-generated by an AI stock research platform for informational purposes only. The content is for general information and research reference, and does not constitute financial advice. Data may lag or be incomplete. Always conduct your own research and consult qualified professionals before making any financial decisions. # [Qiltrack AI] Starbucks Corp (SBUX) 3-Minute Overview ### 🎯 Layer 1: 30-Second Key Takeaways > **💡 One-Sentence Summary** > > Simply put, Starbucks is a global coffee chain trying to prove it can restart growth and margin recovery—but right now the market is still charging it a premium despite messy earnings. > **📍 Basic Profile** > > Market Cap **$103.0 billion** · Hotels, Restaurants & Leisure · NASDAQ NMS - GLOBAL MARKET · Price **$90.37** > **⚡ 3 Things You Should Know** > > 1. 💰 Premium brand, thin current profits: Starbucks still has huge brand power, but its **TTM net margin is only 3.63%** and operating margin is **7.18%**, which is weak for a company investors usually treat like a high-quality consumer compounder. In other words, the brand is strong, but the earnings engine is not firing cleanly right now. > > 2. 📉 Turnaround is the whole story: Revenue has still grown over time, but **3-year revenue growth is only 4.86%** and **3-year EPS growth is -16.85%**. Basically, this is no longer a simple “steady winner” story—the stock now depends heavily on management’s ability to fix traffic, margins, and execution. > > 3. ⚠️ Valuation still asks for trust: Even after recent volatility, Starbucks trades at about **75x TTM earnings**, while it has **missed earnings estimates for the last 4 quarters**. That usually means the market is looking past current weakness and betting the turnaround works; if progress stays slow, the stock could feel expensive. > **🎯 Quick Health Check** > > | Dimension | Rating | Details | > |-----------|--------|---------| > | Profitability | Weak👎 | Net margin 3.63%, well below what you'd want for a premium consumer brand | > | Growth Rate | Slow🐢 | Revenue growth 4.86% (3Y), EPS growth negative over 3 years | > | Financial Health | Moderate💛 | Current ratio 1.05, but debt-to-equity 8.07 is very high | > | Valuation | Expensive | PE 75.21 times | --- ### 📋 Layer 2: 2-Minute Deep Dive #### 📊 How Does This Company Make Money? **Business Model in One Sentence:** Starbucks sells coffee, beverages, food, and branded store experiences to consumers, making money through company-operated stores, licensed stores, and repeat spending from its loyalty ecosystem. **Revenue Breakdown:** | Business | Share | Trend | Comment | |----------|-------|-------|---------| | Company-operated stores | [Data unavailable] | → | Core revenue driver, but also where labor and traffic pressure hit margins most directly | | Licensed stores / other channels | [Data unavailable] | ↑ | Usually lighter-capital and steadier, helps extend brand reach | | Consumer products / loyalty ecosystem | [Data unavailable] | ↑ | Rewards and repeat purchases matter because they support frequency and pricing power | **Profitability Metrics:** | Metric | Value | Ranking | Interpretation | |--------|-------|---------|----------------| | Gross Margin | 22.17% | Below Average | For a brand this strong, this is not especially impressive; cost structure is eating into the story | | Net Margin | 3.63% | Below Average | Very thin for a company with Starbucks’ reputation, which tells you the turnaround is still unfinished | | ROE | 115.68% | Excellent>20% | Looks spectacular on paper, but likely boosted by a very thin equity base and high leverage, so don't read it as pure operating strength | --- #### 📈 How's the Growth? **Growth Assessment:** Slowing | Metric | Latest | vs Last Year | Trend | |--------|--------|--------------|-------| | Revenue Growth | 4.86% (3Y CAGR) | [Data unavailable] | Slowing | | Profit Growth | -16.85% (3Y CAGR EPS proxy) | [Data unavailable] | Slowing | **Growth Quality:** > Worth noting: this does **not** look like clean, high-quality growth right now. Revenue is still expanding over a multi-year period, but earnings are shrinking, which usually means costs, mix, promotions, or execution issues are offsetting sales gains. Basically, if sales go up but EPS goes down, the market starts asking whether growth is being “bought” rather than earned. --- #### 💰 Financial Health Check **One Sentence:** Think of it like someone with a very recognizable business and solid cash coming in, but also a pretty aggressive balance-sheet setup and not much short-term cushion. | Metric | Value | Safe Zone | Assessment | |--------|-------|-----------|------------| | Debt Ratio | [Data unavailable] | <60% safe | [Data unavailable] | | Current Ratio | 1.05 | >1.5 healthy | ⚠️Tight | | Cash Flow | Cash flow/share TTM $4.84 | >0 | ✅Positive | **Additional balance-sheet context:** Debt-to-equity is **8.07** and long-term debt-to-equity is **7.77**, both very high. Interest coverage at **14.81x** says Starbucks can currently service that debt, but the leverage still reduces room for error if operating performance stays soft. --- #### 🏷️ Is It Expensive Now? **Price Position (based on 52-week range):** - 52-Week Low: $75.50 - 52-Week High: $104.82 - Current: $90.37, In the middle | Position Range | Cheap Zone | Fair Zone | Pricey Zone | |----------------|------------|-----------|-------------| | Criteria | 0-33% | 33-66% | 66-100% | | **Current** | | ●(50.7% position) | | **Valuation Comparison:** | Comparison | Current | Reference | Assessment | |------------|---------|-----------|------------| | vs Own History | PE 75.21 times | 5-year avg [Data unavailable] | [Data unavailable] | | vs Peers | PE 75.21 times | Industry avg [Data unavailable] | Likely elevated, but exact peer benchmark unavailable | **What the Current Valuation is Betting On:** > The stock price seems to be betting that Starbucks can restore stronger margins, stabilize store performance, and get back to being a dependable earnings grower. In other words, investors are not paying for today's profit profile—they're paying for a cleaner 1-2 year recovery story. --- #### 📰 Any Recent News? | Date | Event | Impact | |------|-------|--------| | 2026-04-03 | Commentary around CEO turnaround plan and valuation focus | Neutral to Positive — market attention is centered on whether management can execute the recovery | | 2026-04-01 | AGM governance shift approved; management reiterated confidence in turnaround | Positive — governance simplification is fine, but the real issue is still operating improvement | | 2026-03-14 | New rewards program and analyst downgrade highlighted tougher competition | Mixed — loyalty initiatives can help traffic, but analysts want clearer proof the turnaround is working | | 2026-03-05 | Guggenheim kept Neutral, raised price target to $95 | Neutral — not bearish, but hardly a full-throated endorsement | --- ### 📊 Layer 3: Want More? 3-Minute Complete Analysis #### I. Detailed Financial Data **Profitability Trends:** | Metric | This Year | Last Year | Year Before | 3-Year Trend | |--------|-----------|-----------|-------------|--------------| | Gross Margin | 22.17% | [Data unavailable] | [Data unavailable] | [Data unavailable] | | Net Margin | 3.63% | [Data unavailable] | [Data unavailable] | [Data unavailable] | | ROE | 115.68% | [Data unavailable] | [Data unavailable] | [Data unavailable] | **Growth Trends:** | Metric | This Year | Last Year | Year Before | 3-Year Trend | |--------|-----------|-----------|-------------|--------------| | Revenue Growth | 4.86% (3Y CAGR) | [Data unavailable] | [Data unavailable] | ↑ but slowing | | Profit Growth | -16.85% (3Y EPS CAGR proxy) | [Data unavailable] | [Data unavailable] | ↓ | | EPS Growth | -16.85% (3Y) | [Data unavailable] | [Data unavailable] | ↓ | --- #### II. Earnings Track Record **Last 4 Quarters vs Expectations:** | Quarter | EPS Expected | EPS Actual | Surprise | |---------|--------------|------------|----------| | 2025-12-31 | $0.60 | $0.56 | -6.32% Miss 😟 | | 2025-09-30 | $0.57 | $0.52 | -9.46% Miss 😟 | | 2025-06-30 | $0.66 | $0.61 | -7.80% Miss 😟 | | 2025-03-31 | $0.50 | $0.41 | -17.34% Miss 😟 | **Earnings Trend Interpretation:** Four straight misses usually mean the recovery is taking longer than Wall Street expected. What's interesting is that this often matters more than the absolute EPS number—because repeated misses chip away at confidence, and premium-multiple stocks depend heavily on confidence. --- #### III. What the Market Thinks **Analyst Ratings:** | Rating | Count | Percentage | |--------|-------|------------| | Strong Buy/Buy | 22 firms | 45.8% | | Hold | 20 firms | 41.7% | | Sell | 6 firms | 12.5% | **Target Price:** [Data unavailable] ~ [Data unavailable] (Median [Data unavailable]) **vs Current Price:** [Data unavailable] **Insider Activity:** Net buying in past 3 months, but mostly **transaction code "A" acquisitions/awards**, not clear open-market conviction buys > This matters because insider accumulation sounds bullish at first glance, but award-related acquisitions are much less informative than executives spending their own cash in the market. --- #### IV. Key Risk Alerts **3 Risks to Watch:** 1. **Turnaround Execution Risk:** Earnings have missed estimates for 4 straight quarters → If management can't rebuild margins and traffic soon, the valuation could compress 2. **Leverage / Balance Sheet Risk:** Debt-to-equity of 8.07 is very high → If operating conditions worsen, financial flexibility could tighten faster than investors expect 3. **Competitive / Consumer Demand Risk:** Coffee, quick-service, and loyalty competition remain intense → If promotions rise or customer traffic weakens, Starbucks may have to trade margin for volume --- ### 🎬 Summary & Next Steps > **📝 Three-Sentence Summary** > > **What it is:** Starbucks is still one of the world's best-known consumer brands, built on coffee, convenience, and a sticky loyalty ecosystem. > > **Key strength:** Its brand scale, repeat customer behavior, and positive cash generation give it a real base for a recovery if management executes well. > > **Key risk:** The big issue is that the stock still looks expensive relative to current earnings quality, and four straight EPS misses suggest the turnaround is not proven yet. --- > **🔍 Want to Learn More?** > > • Want to know if this company has a strong moat? → Try【Buffett Mode】for deeper analysis > > • Want to check for hidden landmines? → Try【Muddy Mode】for risk screening > > • Is this a growth stock? Want to calculate if it's worth the bet? → Try【Musk Mode】for analysis