You'd think there's a

Starbucks

(SBUX) - Get Report

on every big city block and in every mall in America, making the coffee house the most ubiquitous -- and seemingly overextended -- retail name since now-struggling

Gap Stores

(GPS) - Get Report

. But on Wall Street, there are few doubts that Starbucks will remain a growth stock.

The coffee-stand company's earnings multiple swelled to 35 times next year's estimates on Friday after it reported a 10% rise in May same-store sales. The shares were recently gaining 3% to $24.28.

That's nearly twice the

S&P 500's

price-to-earnings ratio of 19, based on calendar 2003 earnings estimates. Still, analysts point to earnings that grew in excess of 30% over the last eight quarters, and say that the boutique retailer's multiple still has room to expand.

Applause

"This is a highly profitable company, whose comparable-store sales will lead to multiple expansion," said Kristine Koerber, an analyst at W.R. Hambrecht, which doesn't do banking with the company.

On a simplistic level, one must perceive some Gap parallel in Starbucks, given the pace of an expansion that has led to two of the most ubiquitous retail names in the country over the last decade. But though the Gap's expansion and share price ran into a wall last year when the company's buyers lost their Middle America golden touch, Starbucks' shares are enjoying a kind of renaissance and right now trade not far below a five-year high.

What differentiates the clothes retailer from the coffee maker, says Kurt Barnard, publisher of

Barnard's Retail Trend Report

, is that Gap embodied a "free-wheeling" and "devil-may-care image" that eventually wore off. By contrast, he thinks it is hard to envision a future without coffee.

Meantime, over the next three to five years, analysts think that Starbucks will maintain a 20% to 25% earnings growth rate. By contrast, S&P 500 earnings are forecast to rise 7% in that period.

The Seattle coffee giant is hardly the only specialty retailer to be awarded a fat multiple from the market and lush praise by analysts.

Krispy Kreme

(KKD)

-- which has a price-to-earnings multiple of 45.4, using 2003 earnings, and

Panera Breads

(PNRA)

, which trades at 34 times earnings, are both largely immune to criticism on Wall Street. Not coincidentally, both companies reported very strong quarterly earnings this week.

Not Unreasonable

"This is not an unreasonable multiple for a high-growth company," said Kathleen Heaney, an analyst at Brean Murray, referring to Krispy Kreme's valuation. Her firm doesn't do banking with the doughnut shop. In the next three to five years, the sweets maker is expected to grow earnings at a 35% annual clip.

Analysts depict Krispy Kreme as a stock that is growing into its valuation this year. "When it was trading at 80 times earnings last year, it was more difficult to justify," said Andrew Wolf, an analyst at BB&T, which has a banking relationship with the company. "Now it is attractively valued."

Though Wolf claims there isn't a lot of risk in owning Krispy Kreme, given its plans to roll out scores of new stores in the next few years, he acknowledges that market saturation is a potential problem.

Analysts concede that a big market trauma could take a disproportionate toll on shares priced as richly as these, and they note that if growth doesn't in fact materialize, punishment will probably be swift.

"If earning's growth slows, it could really cut back on the multiples of these companies," said Heaney. "Or, if they expand too quickly, or people stop buying doughnuts, it could also be a problem."

Competition, which was responsible for loss of market share for Gap, is also an issue. "The risk is others will jump in and milk the same coffee," said Barnard, of the

Retail Trend Report

. "That's why Starbucks is expanding so rapidly, to prevent locations from falling into the hands of competitors."