Starbucks Steeped in Froth

"We were very pleased with 6% comps, and if anyone on the call is disappointed, you're off base," Schultz said.

So, when will Starbucks slow down? Alex Motola, a portfolio manager with Thornburg Core Growth Fund, wouldn't speak specifically about Starbucks, but he says most big growth stocks that start with a great concept and wide recognition end up growing at a high rate for much longer than many people expect.

"That can be a great period for stock-price appreciation," says Motola. "The stock gets added to major indices. It becomes a fashionable stock on Wall Street, and finally, it reaches a period where you're paying a big multiple for the company based on historical growth that they're probably not going to be able to continue delivering. That can persist much longer than you would expect, but usually some fundamental change eventually happens that annihilates the stock, and its valuation comes way down."

That's what happened to McDonald's (MCD Quote) in the late 1990s, when its stock dropped from its all-time high near $50. Now, it's trading at around $35 at a multiple of about 14 times its earnings estimates through 2007. The fast-food giant is now focused on sprucing up its existing store base rather than growing at its levels of yesteryear.

Starbucks says its current base of 11,225 stores can grow to at least 30,000 stores worldwide.

"We haven't revisited that number recently, and we need to do that," Starbucks Chief Financial Officer Michael Casey said in an interview. "I don't think there's any doubt that we'll re-evaluate that number and set it higher."

The company plans to open 1,800 stores this year, and Casey says that number will increase in the future. If one assumes Starbucks could open an average of 2,000 stores per year for the next decade, it will take nine years for it to reach its current estimate for market saturation.