Starbucks Corp

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SBUX : NASDAQ : Services
$57.31 up 0.22 | 0.39%
Today's Range: 56.90 - 57.45
Avg. Daily Volume: 8,907,800
08/25/16 - 12:40 PM ET

Financial Analysis


STARBUCKS CORP's gross profit margin for the third quarter of its fiscal year 2016 is essentially unchanged when compared to the same period a year ago. The company has grown its sales and net income during the past quarter when compared with the same quarter a year ago, and although its growth in net income has outpaced the industry average, its revenue growth has not. STARBUCKS CORP has weak liquidity. Currently, the Quick Ratio is 0.72 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.

During the same period, stockholders' equity ("net worth") has remained virtually unchanged only decreasing by 2.30% 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 Q3 FY16 Q3 FY15
Net Sales ($mil)5237.94881.1
EBITDA ($mil)1187.21114.9
EBIT ($mil)939.6878.4
Net Income ($mil)754.2626.6


Balance Sheet Q3 FY16 Q3 FY15
Cash & Equiv. ($mil)2316.32175.2
Total Assets ($mil)13833.212868.8
Total Debt ($mil)3602.22897.2
Equity ($mil)5721.85856.5


Profitability Q3 FY16 Q3 FY15
Gross Profit Margin28.8428.75
EBITDA Margin22.6622.84
Operating Margin17.9418.0
Sales Turnover1.481.43
Return on Assets19.2920.92
Return on Equity46.6545.97
Debt Q3 FY16 Q3 FY15
Current Ratio1.141.18
Debt/Capital0.390.33
Interest Expense21.819.1
Interest Coverage43.145.99


Share Data Q3 FY16 Q3 FY15
Shares outstanding (mil)1466.41490.8
Div / share0.20.16
EPS0.510.41
Book value / share3.93.93
Institutional Own % n/a n/a
Avg Daily Volume8813684.08404516.0

Valuation


BUY. The current P/E ratio indicates a discount compared to an average of 31.03 for the Hotels, Restaurants & Leisure industry and a premium compared to the S&P 500 average of 25.30. To use another comparison, its price-to-book ratio of 14.23 indicates a significant premium versus the S&P 500 average of 2.83 and a significant discount versus the industry average of 40.41. The price-to-sales ratio is well above both the S&P 500 average and the industry average, indicating a premium. Upon assessment of these and other key valuation criteria, STARBUCKS CORP proves to trade at a discount to investment alternatives within the industry.


Price/Earnings
1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
SBUX 31.02 Peers 31.03   SBUX 19.23 Peers 14.46

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 significant 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 25.47 Peers 25.37   SBUX 8.08 Peers 2.85

Premium. A higher price-to-projected earnings ratio than its peers can signify a more expensive stock or higher future growth expectations.

SBUX is trading at a premium 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 14.23 Peers 40.41   SBUX 0.84 Peers 31.54

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

SBUX is trading at a significant discount 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 2.88   SBUX 11.34 Peers 5.70

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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