Starbucks Corp

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SBUX : NASDAQ : Services
$56.81 | %
Today's Range: 55.9 - 57.38
Avg. Daily Volume: 9568000.0
03/24/17 - 4:00 PM ET

Financial Analysis


STARBUCKS CORP's gross profit margin for the first quarter of its fiscal year 2017 is essentially unchanged 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 0.69 which shows a lack of ability to cover short-term cash needs. The liquidity decreased from the same period a year ago, despite already having weak liquidity to begin with. This would indicate deteriorating cash flow.

During the same period, stockholders' equity ("net worth") has remained virtually unchanged only decreasing by 3.09% 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 Q1 FY17 Q1 FY16
Net Sales ($mil)5732.95373.5
EBITDA ($mil)1297.91229.4
EBIT ($mil)1048.2993.9
Net Income ($mil)751.8687.6


Balance Sheet Q1 FY17 Q1 FY16
Cash & Equiv. ($mil)2175.42379.9
Total Assets ($mil)14017.312943.5
Total Debt ($mil)3185.72347.7
Equity ($mil)5796.65981.5


Profitability Q1 FY17 Q1 FY16
Gross Profit Margin28.8628.56
EBITDA Margin22.6322.87
Operating Margin18.2818.5
Sales Turnover1.551.52
Return on Assets20.5519.01
Return on Equity49.7141.15
Debt Q1 FY17 Q1 FY16
Current Ratio1.051.07
Debt/Capital0.350.28
Interest Expense23.816.5
Interest Coverage44.0460.24


Share Data Q1 FY17 Q1 FY16
Shares outstanding (mil)1457.21485.6
Div / share0.250.2
EPS0.510.46
Book value / share3.984.03
Institutional Own % n/a n/a
Avg Daily Volume9239958.09246541.0

Valuation


BUY. STARBUCKS CORP's P/E ratio indicates a discount compared to an average of 37.76 for the Hotels, Restaurants & Leisure industry and a value on par with the S&P 500 average of 26.73. For additional comparison, its price-to-book ratio of 13.78 indicates a significant premium versus the S&P 500 average of 2.98 and a significant premium versus the industry average of 9.39. The current price-to-sales ratio is well above the S&P 500 average and above 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 28.10 Peers 37.76   SBUX 17.92 Peers 16.77

Discount. A lower P/E ratio than its peers can signify a less expensive stock or lower growth expectations.

SBUX is trading at a significant discount to its peers.

 

Average. 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 valuation on par 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 22.37 Peers 23.54   SBUX 2.32 Peers 3.36

Average. An average price-to-projected earnings ratio can signify an industry neutral stock price and average future growth expectations.

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

 

Discount. 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 discount to its peers.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
SBUX 13.78 Peers 9.39   SBUX 19.63 Peers 75.07

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 3.68 Peers 3.22   SBUX 9.84 Peers 3.06

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 premium to its industry on this measurement.

 

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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