Should you buy Starbucks stock? (August 2023)
- 8 months ago
Starbucks stock analysis. Ticker: SBUX.
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Starbucks stock is now valued at 3.6 times revenue, 30 times earnings and 43 times free cash flow. And the stock also pays a dividend of 2.1%.
30 times earnings might seem expensive, but Starbucks has been a reliable performer. Revenue has grown at roughly 9% per year over the last 10 years with earnings per share increasing by roughly 12% a year.
That said, net income is yet to regain its 2019 peak and gross margins have fallen from almost 30% in 2017 to 27% today.
With a market cap of 125 billion and over 37,000 stores worldwide, it’s understandable to wonder how much more Starbucks can grow. But the company has at least 4 options for growth:
Despite already having 16,000 stores in the US, Starbucks still has room to open new stores in smaller cities as well as smaller format stores in bigger cities. And in a recent presentation, Starbucks said it expects to deliver 7-9% annual revenue growth and 15-20% earnings growth over the next few years.
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Join 9000+ investors: https://www.overlookedalpha.com
Starbucks stock is now valued at 3.6 times revenue, 30 times earnings and 43 times free cash flow. And the stock also pays a dividend of 2.1%.
30 times earnings might seem expensive, but Starbucks has been a reliable performer. Revenue has grown at roughly 9% per year over the last 10 years with earnings per share increasing by roughly 12% a year.
That said, net income is yet to regain its 2019 peak and gross margins have fallen from almost 30% in 2017 to 27% today.
With a market cap of 125 billion and over 37,000 stores worldwide, it’s understandable to wonder how much more Starbucks can grow. But the company has at least 4 options for growth:
Despite already having 16,000 stores in the US, Starbucks still has room to open new stores in smaller cities as well as smaller format stores in bigger cities. And in a recent presentation, Starbucks said it expects to deliver 7-9% annual revenue growth and 15-20% earnings growth over the next few years.
#stocks #investing #stockstobuy #overlookedalpha