Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.
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 $381.2 million.
- SBUX is down 3.2% 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. Its stores offer coffee and tea beverages, packaged roasted whole bean and ground coffees, single serve products, and juices and bottled water. The stock currently has a dividend yield of 1.4%. SBUX has a PE ratio of 497.3. Currently there are 17 analysts that rate Starbucks a buy, no analysts rate it a sell, and 6 rate it a hold.
The average volume for Starbucks has been 6.1 million shares per day over the past 30 days. Starbucks has a market cap of $53.8 billion and is part of the services sector and leisure industry. The stock has a beta of 0.83 and a short float of 1.2% with 1.64 days to cover. Shares are down 10.2% year-to-date as of the close of trading on Wednesday.
rates Starbucks as a
. The company's strengths can be seen in multiple areas, such as its revenue growth, increase in net income, largely solid financial position with reasonable debt levels by most measures, solid stock price performance and growth in earnings per share. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.
Highlights from the ratings report include:
- The revenue growth came in higher than the industry average of 3.8%. Since the same quarter one year prior, revenues rose by 11.8%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The net income growth from the same quarter one year ago has significantly exceeded that of the Hotels, Restaurants & Leisure industry average, but is less than that of the S&P 500. The net income increased by 25.1% when compared to the same quarter one year prior, rising from $432.20 million to $540.70 million.
- The current debt-to-equity ratio, 0.42, is low and is below the industry average, implying that there has been successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.78 is somewhat weak and could be cause for future problems.
- The stock has risen over the past year as investors have generally rewarded the company for its earnings growth and other positive factors like the ones we have cited in this report. The stock's price rise over the last year has driven it to a level which is somewhat expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
- STARBUCKS CORP has improved earnings per share by 24.6% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, STARBUCKS CORP swung to a loss, reporting -$0.01 versus $1.79 in the prior year. This year, the market expects an improvement in earnings ($2.67 versus -$0.01).
- You can view the full Starbucks Ratings Report.