Starbucks Corp

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SBUX : NASDAQ : Services
$58.43 up 0.67 | 1.2%
Today's Range: 57.76 - 58.5
Avg. Daily Volume: 8859800.0
01/24/17 - 3:59 PM ET

Financial Analysis


STARBUCKS CORP's gross profit margin for the fourth quarter of its fiscal year 2016 has increased when compared to the same period a year ago. The company managed to grow both sales and net income at a faster pace than the average competitor in its industry this quarter as compared to the same quarter a year ago. STARBUCKS CORP has weak liquidity. Currently, the Quick Ratio is 0.67 which shows a lack of ability to cover short-term cash needs. The company's liquidity has increased from the same period last year, indicating improving cash flow.

At the same time, stockholders' equity ("net worth") has remained virtually unchanged only increasing by 1.13% from the same quarter last year. Overall, the key liquidity measurements indicate that the company is in a position in which financial difficulties could develop in the future.

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Income Statement Q4 FY16 Q4 FY15
Net Sales ($mil)5711.24914.8
EBITDA ($mil)1371.41122.2
EBIT ($mil)1121.5887.9
Net Income ($mil)800.9652.5


Balance Sheet Q4 FY16 Q4 FY15
Cash & Equiv. ($mil)2263.21611.4
Total Assets ($mil)14329.512446.1
Total Debt ($mil)3602.22347.5
Equity ($mil)5884.05818.0


Profitability Q4 FY16 Q4 FY15
Gross Profit Margin31.0429.01
EBITDA Margin24.0122.83
Operating Margin19.6418.07
Sales Turnover1.491.54
Return on Assets19.6622.15
Return on Equity47.8847.39
Debt Q4 FY16 Q4 FY15
Current Ratio1.051.19
Debt/Capital0.380.29
Interest Expense24.718.2
Interest Coverage45.448.79


Share Data Q4 FY16 Q4 FY15
Shares outstanding (mil)1460.51485.1
Div / share0.20.16
EPS0.540.43
Book value / share4.033.92
Institutional Own % n/a n/a
Avg Daily Volume8814090.08100894.0

Valuation


BUY. The current P/E ratio indicates a discount compared to an average of 30.60 for the Hotels, Restaurants & Leisure industry and a premium compared to the S&P 500 average of 25.41. For additional comparison, its price-to-book ratio of 14.37 indicates a significant premium versus the S&P 500 average of 2.83 and a significant premium versus the industry average of 7.45. The price-to-sales ratio is well above both the S&P 500 average and the industry average, indicating a premium.


Price/Earnings
1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
SBUX 30.47 Peers 30.60   SBUX 18.48 Peers 15.94

Average. An average P/E ratio can signify an industry neutral price for a stock and an average growth expectation.

SBUX is trading at a valuation on par with its peers.

 

Premium. The P/CF ratio, a stock’s price divided by the company's cash flow from operations, is useful for comparing companies with different capital requirements or financing structures.

SBUX is trading at a premium to its peers.

 
Price/Projected
Earnings
1 2 3 4 5
premium   discount
  Price to
Earnings/Growth
1 2 3 4 5
premium   discount
SBUX 23.48 Peers 31.23   SBUX 2.52 Peers 1.80

Discount. A lower price-to-projected earnings ratio than its peers can signify a less expensive stock or lower future growth expectations.

SBUX is trading at a discount to its peers.

 

Premium. The PEG ratio is the stock’s P/E divided by the consensus estimate of long-term earnings growth. Faster growth can justify higher price multiples.

SBUX trades at a significant premium to its peers.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
SBUX 14.37 Peers 7.45   SBUX 4.39 Peers 71.03

Premium. A higher price-to-book ratio makes a stock less attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet.

SBUX is trading at a significant premium to its peers.

 

Lower. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios.

However, SBUX is expected to significantly trail its peers on the basis of its earnings growth rate.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
SBUX 3.97 Peers 2.93   SBUX 11.23 Peers 4.86

Premium. In the absence of P/E and P/B multiples, the price-to-sales ratio can display the value investors are placing on each dollar of sales.

SBUX is trading at a significant premium to its industry.

 

Higher. A sales growth rate that exceeds the industry implies that a company is gaining market share.

SBUX has a sales growth rate that significantly exceeds its peers.

 

 

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