Starbucks (SBUX) Is Today's Post-Market Loser Stock
Trade-Ideas LLC identified
(
) as a post-market laggard candidate. In addition to specific proprietary factors, Trade-Ideas identified Starbucks as such a stock due to the following factors:
- SBUX has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $534.8 million.
- SBUX is down 5.9% today from today's close.
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More details on SBUX:
Starbucks Corporation operates as a roaster, marketer, and retailer of specialty coffee worldwide. The company operates in four segments: Americas; Europe, Middle East, and Africa; China/Asia Pacific; and Channel Development. The stock currently has a dividend yield of 1.4%. SBUX has a PE ratio of 34. Currently there are 13 analysts that rate Starbucks a buy, no analysts rate it a sell, and 5 rate it a hold.
The average volume for Starbucks has been 8.6 million shares per day over the past 30 days. Starbucks has a market cap of $83.1 billion and is part of the services sector and leisure industry. The stock has a beta of 0.74 and a short float of 1.3% with 1.50 days to cover. Shares are down 4.2% year-to-date as of the close of trading on Wednesday.
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Analysis:
rates Starbucks as a
. The company's strengths can be seen in multiple areas, such as its growth in earnings per share, revenue growth, largely solid financial position with reasonable debt levels by most measures, notable return on equity and increase in net income. We feel its strengths outweigh the fact that the company is trading at a premium valuation based on our review of its current price compared to such things as earnings and book value.
Highlights from the ratings report include:
- Despite its growing revenue, the company underperformed as compared with the industry average of 10.7%. Since the same quarter one year prior, revenues slightly increased by 9.4%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- STARBUCKS CORP has improved earnings per share by 18.2% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, STARBUCKS CORP increased its bottom line by earning $1.82 versus $1.36 in the prior year. This year, the market expects an improvement in earnings ($1.89 versus $1.82).
- The current debt-to-equity ratio, 0.59, is low and is below the industry average, implying that there has been successful management of debt levels. Even though the company has a strong debt-to-equity ratio, the quick ratio of 0.50 is very weak and demonstrates a lack of ability to pay short-term obligations.
- Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. In comparison to other companies in the Hotels, Restaurants & Leisure industry and the overall market on the basis of return on equity, STARBUCKS CORP has underperformed in comparison with the industry average, but has greatly exceeded that of the S&P 500.
- The company, on the basis of net income growth from the same quarter one year ago, has significantly underperformed compared to the Hotels, Restaurants & Leisure industry average, but is greater than that of the S&P 500. The net income increased by 16.2% when compared to the same quarter one year prior, going from $494.90 million to $575.00 million.
- You can view the full Starbucks Ratings Report.
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