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Luckin Coffee (LKNCY)
OTHER OTC:LKNCY
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Luckin Coffee
(OTC:LKNCY)
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Rating:81Outperform
Price Target:―
Luckin Coffee's overall stock score reflects its robust financial performance, marked by impressive revenue and profit growth and a strong balance sheet. The company benefits from positive momentum in stock prices and favorable technical indicators, although the valuation is on the higher side, indicating investor expectations for future growth. The earnings call further supports a positive outlook with strong guidance and strategic initiatives, despite some potential cost and competitive challenges.
Positive Factors
Revenue Growth
Strong revenue growth indicates robust market demand and effective business strategies, supporting long-term financial stability and expansion.
Store Expansion
The significant expansion of store locations enhances market presence and accessibility, driving future revenue growth and competitive positioning.
Cash Flow Generation
Strong cash flow generation supports reinvestment, debt servicing, and strategic initiatives, ensuring financial flexibility and growth potential.
Negative Factors
Rising Coffee Bean Costs
Increased raw material costs could pressure profit margins, necessitating careful cost management to maintain profitability.
Increased Expenses
Rising operational expenses may strain profit margins and require efficiency improvements to sustain financial performance.
Competitive Pressure
Emerging competitors in the beverage market may challenge market share, necessitating strategic investments in brand and marketing.
Luckin Coffee (LKNCY) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$10.69B
Dividend YieldN/A
Average Volume (3M)1.60M
Price to Earnings (P/E)22.2
Beta (1Y)0.20
Revenue Growth41.95%
EPS Growth88.82%
CountryUS
Employees33,795
SectorConsumer Cyclical
Sector Strength84
IndustryRestaurants
Share Statistics
EPS (TTM)0.07
Shares Outstanding266,231,500
10 Day Avg. Volume2,022,540
30 Day Avg. Volume1,601,292
Financial Highlights & Ratios
PEG Ratio0.95
Price to Book (P/B)0.57
Price to Sales (P/S)0.22
P/FCF Ratio3.87
Enterprise Value/Market Cap1.12
Enterprise Value/Revenue0.32
Enterprise Value/Gross Profit0.77
Enterprise Value/Ebitda2.16
Forecast
1Y Price Target
$48.48Price Target Upside25.60% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering2
Luckin Coffee Business Overview & Revenue Model
Company DescriptionLuckin Coffee Inc. (LKNCY) is a Chinese coffee company and coffeehouse chain known for its innovative technology-driven retail model. Founded in 2017 and headquartered in Xiamen, China, Luckin Coffee focuses on offering high-quality coffee and other beverages, including tea and snacks, at competitive prices. The company has rapidly expanded its presence across China, operating a network of self-operated stores, pick-up stations, and partnerships with third-party delivery services. Luckin Coffee leverages a mobile app-based platform to facilitate seamless ordering, payment, and customer engagement, positioning itself as a tech-forward alternative to traditional coffee shops.
How the Company Makes MoneyLuckin Coffee generates revenue primarily through the sale of coffee and other beverages. The company's revenue model is centered around its mobile app, which streamlines the customer experience by allowing users to order and pay for products in advance, reducing wait times and enhancing convenience. A significant portion of its income comes from its extensive network of self-operated stores and pick-up locations, where customers can quickly collect their orders. Additionally, Luckin Coffee has formed partnerships with third-party delivery services to extend its reach and cater to the growing demand for food delivery in urban areas. The company's focus on cost control, competitive pricing, and aggressive expansion strategy has contributed to its ability to capture a substantial share of the Chinese coffee market. Furthermore, Luckin Coffee occasionally engages in marketing promotions and discounts to attract new customers and increase sales volume, which also contributes to its revenue streams.
Luckin Coffee Earnings Call Summary
Earnings Call Date:Jul 30, 2025
(Q2-2025)
| Next Earnings Date:Oct 29, 2025
Earnings Call Sentiment Positive
The earnings call highlighted strong revenue growth, significant store expansion, and increased customer engagement, with notable achievements in operational metrics and international expansion. However, rising delivery expenses and uncertainty in delivery platform subsidies present challenges.Q2-2025 Updates
Positive Updates
Significant Revenue Growth
Total net revenues reached RMB 12.4 billion, representing a 47% year-over-year increase.
Record Store Expansion
Added 2,085 net new stores domestically, bringing the total store count to 26,117, maintaining market leadership in China.
Strong Operational Metrics
Operating profit increased by 62% year-over-year to RMB 1.7 billion, with operating margins expanding to 13.8%.
Increased Customer Engagement
Monthly average transacting customers grew 32% year-over-year to nearly 91.7 million, reaching a new all-time high.
International Expansion Milestone
Soft opening of 2 stores in New York, marking a significant milestone in Luckin's international expansion strategy.
Product Innovation
Launched over 20 freshly brewed beverages, including the popular Orange Americano, which surpassed 350 million cumulative cups sold.
Improved Supply Chain Efficiency
Broke ground on Luckin's fourth roasting facility, increasing total annual coffee roasting capacity to 155,000 tons.
Negative Updates
Rising Delivery Expenses
Delivery expenses increased by 175% year-over-year to RMB 1.7 billion, raising delivery expenses as a percentage of total net revenue to 14% from 7%.
Uncertainty in Delivery Platform Subsidies
The duration and scale of food delivery platforms' subsidies remain uncertain, impacting market dynamics.
Company Guidance
During Luckin Coffee's second quarter 2025 earnings call, significant growth metrics were highlighted, underscoring the company's robust performance. Total net revenues reached RMB 12.4 billion, marking a 47% year-over-year increase, fueled by a 46% rise in GMV to RMB 14.2 billion. The company reported a 13.4% same-store sales growth for self-operated stores and an impressive 62% year-over-year increase in operating profit to RMB 1.7 billion, with operating margins expanding to 13.8%. The aggressive store expansion strategy resulted in a net addition of 2,085 domestic stores, bringing the total to 26,117, including 16,903 self-operated and 9,214 partnership stores. Internationally, 24 new stores were added, totaling 89. On the customer front, Luckin Coffee saw a 32% year-over-year growth in monthly average transacting customers, reaching nearly 91.7 million, while the cumulative transaction customer base surpassed 380 million. The quarter also witnessed a healthy cash flow, with net operating cash inflow exceeding RMB 2.5 billion and a strong cash reserve of RMB 8.2 billion as of June 30, 2025.Luckin Coffee Financial Statement Overview
Summary
Luckin Coffee displays strong financial health with solid revenue and profit growth, a stable and conservative balance sheet, and robust cash flow generation. The company's performance reflects effective management and strategic positioning in the restaurant industry. While the debt level is managed prudently, continued focus on maintaining growth and managing leverage will be crucial for sustaining this trajectory.Income Statement
Luckin Coffee has demonstrated robust revenue growth, with a significant increase from CNY 24.9 billion in 2023 to CNY 34.5 billion in 2024, marking a 38.5% growth rate. The company maintains strong profitability with a gross profit margin of 59.1% and a net profit margin of 8.5% for 2024. The EBIT margin stands at 10.3%, and the EBITDA margin is 13.3%, indicating efficient operations and cost management. Overall, Luckin Coffee shows impressive growth and stable profitability.85
Very Positive
Balance Sheet
The balance sheet reveals a solid equity base with a stockholders' equity of CNY 13.1 billion, up from CNY 8.1 billion in 2023. The debt-to-equity ratio is 0.46, indicating a conservative use of debt financing. The equity ratio is 56.5%, reflecting a strong capital structure. Return on equity is a healthy 22.5%, up from 35.0% in the previous year, showcasing effective use of shareholders' capital. The company appears financially stable with a prudent leverage strategy.78
Positive
Cash Flow
Luckin Coffee's free cash flow has seen significant growth, from CNY 143.7 million in 2023 to CNY 1.9 billion in 2024, representing a remarkable increase. The operating cash flow to net income ratio is 1.44, highlighting strong cash generation relative to net earnings. The free cash flow to net income ratio of 0.66 indicates good conversion of profits into free cash flow. This strong cash flow position supports potential reinvestment and debt servicing.82
Very Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 37.06B | 34.96B | 24.90B | 13.53B | 7.86B | 3.81B |
| Gross Profit | 15.65B | 19.44B | 13.40B | 7.86B | 4.25B | 1.47B |
| EBITDA | 5.56B | 7.32B | 5.11B | 2.44B | 1.67B | -5.33B |
| Net Income | 3.54B | 2.97B | 2.85B | 496.82M | 571.05M | -5.28B |
Balance Sheet | ||||||
| Total Assets | 23.71B | 23.10B | 18.29B | 10.48B | 12.31B | 9.32B |
| Cash, Cash Equivalents and Short-Term Investments | 5.93B | 5.74B | 3.49B | 3.53B | 6.48B | 5.06B |
| Total Debt | 5.70B | 6.01B | 4.97B | 1.91B | 4.10B | 3.00B |
| Total Liabilities | 11.53B | 10.05B | 10.16B | 5.43B | 8.68B | 6.60B |
| Stockholders Equity | 12.18B | 13.05B | 8.14B | 5.05B | 3.63B | 2.66B |
Cash Flow | ||||||
| Free Cash Flow | 3.09B | 1.93B | 143.73M | -781.20M | -49.77M | -3.20B |
| Operating Cash Flow | 5.39B | 4.23B | 2.90B | 19.82M | 123.45M | -2.38B |
| Investing Cash Flow | -2.63B | -3.21B | -3.45B | -798.05M | 337.00K | -1.71B |
| Financing Cash Flow | 0.00 | 333.60M | 0.00 | -2.28B | 1.51B | 4.03B |
Luckin Coffee Technical Analysis
Positive
38.60
Price Trends
37.67
Positive
36.20
Positive
32.68
Positive
Market Momentum
0.20
Positive
54.84
Neutral
31.18
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For LKNCY, the sentiment is Positive. The current price of 38.6 is above the 20-day moving average (MA) of 37.72, above the 50-day MA of 37.67, and above the 200-day MA of 32.68, indicating a bullish trend. The MACD of 0.20 indicates Positive momentum. The RSI at 54.84 is Neutral, neither overbought nor oversold. The STOCH value of 31.18 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for LKNCY.
Luckin Coffee Risk Analysis
Luckin Coffee disclosed 108 risk factors in its most recent earnings report. Luckin Coffee reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Luckin Coffee Peers Comparison
Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
81 Outperform | $10.69B | 22.18 | 30.41% | ― | 41.95% | 88.82% | |
68 Neutral | 8.90B | 113.31 | 9.00% | ― | 29.80% | 85.84% | |
67 Neutral | 7.35B | 52.74 | 18.74% | ― | 28.21% | 227.11% | |
63 Neutral | 1.77B | 9.70 | 170.14% | 8.52% | 1.31% | -1.46% | |
56 Neutral | 95.79B | 36.45 | -34.25% | 2.91% | 0.60% | -35.19% | |
42 Neutral | 983.52M | -9.71 | -23.16% | ― | 5.74% | -1.95% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% |
* Consumer Cyclical Sector Average
Performance Comparison
LKNCY
Luckin Coffee
38.60
14.36
59.24%
SBUX
Starbucks
83.83
-11.22
-11.80%
BROS
Dutch Bros Inc
53.36
20.69
63.33%
FWRG
First Watch Restaurant Group
15.67
-0.02
-0.13%
SG
Sweetgreen
8.17
-26.78
-76.62%
CAVA
CAVA Group, Inc.
62.61
-64.51
-50.75%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.