Starbucks (SBUX) AI Stock Analysis

• Market Cap: $97.11B
• Dividend Yield: 2.86%
• Average Volume (3M): 10.56M
• Price to Earnings (P/E): 36.9
• Beta (1Y): 1.18
• Revenue Growth: 0.60%
• EPS Growth: -35.19%
• Country: US
• Employees: 361,000
• Sector: Consumer Cyclical
• Sector Strength: 83
• Industry: Restaurants
• EPS (TTM): 0.50
• Shares Outstanding: 1,136,700,000
• 10 Day Avg. Volume: 8,635,902
• 30 Day Avg. Volume: 10,564,121
• PEG Ratio: -3.66
• Price to Book (P/B): -14.88
• Price to Sales (P/S): 3.06
• P/FCF Ratio: 33.42
• Enterprise Value/Market Cap: 1.32
• Enterprise Value/Revenue: 3.53
• Enterprise Value/Gross Profit: 14.15
• Enterprise Value/Ebitda: 20.27
• 1Y Price Target: $100.57
• Price Target Upside: 17.72% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 25

• Rating: 66 Neutral
• Price Target: $98.00 ▲(14.71% Upside)

Starbucks' overall score reflects strong revenue growth and strategic initiatives, but financial risks from high leverage and declining margins weigh on the outlook. Technical indicators and valuation suggest caution, while corporate events and strategic investments offer potential for future improvement.

Positive Factors

Innovation and Growth

Expecting stronger comps to emerge, supported by the rollout of the Green Apron service model and enhanced innovation pipeline.

Operational Improvements

Signs of turnaround progress continue to build, including U.S. comp transactions improving for a third consecutive quarter and momentum continuing.

Turnaround Strategies

Analyst has high conviction that turnaround strategies under new leadership will be effective in transforming Starbucks into a better company.

Negative Factors

Earnings Pressure

Shares trade above historical multiples, and the projected earnings per share are about 10% below consensus.

Labor Costs

Lowering 2026-28 EPS following accelerated labor investment announcements.

Market Competition

Proprietary survey data suggests deteriorating value perceptions and narrowing quality perceptions for Starbucks relative to peers, leading to a reduced frequency of customer visits.

Starbucks Business Overview & Revenue Model

Company Description

Starbucks Corporation is a global coffeehouse chain based in Seattle, Washington, known for its specialty coffee beverages, teas, and fresh food offerings. Founded in 1971, Starbucks operates thousands of retail locations worldwide, including company-operated and licensed stores. The company focuses not only on coffee but also on creating a unique customer experience, offering a range of products including pastries, sandwiches, and merchandise related to coffee brewing and preparation. Starbucks is a leader in the specialty coffee market and has expanded its offerings to include cold beverages, seasonal items, and diverse food options.

How the Company Makes Money

Starbucks generates revenue primarily through the sale of beverages and food items in its retail locations, which include both company-operated and licensed stores. The company’s revenue model is diversified, with key revenue streams including: 1) Retail Sales: The core revenue comes from selling coffee, tea, and food products at its stores. 2) Consumer Packaged Goods: Starbucks sells packaged coffee and tea products through grocery stores and other retailers, expanding its brand reach beyond its cafes. 3) Licensing: Starbucks earns royalties and fees from licensed stores that operate under its brand, allowing for a broader market presence without the overhead costs of company-operated locations. 4) Digital and Mobile Sales: Starbucks has invested in its digital platform, including a mobile app that facilitates orders, payments, and loyalty rewards, driving repeat business and customer engagement. 5) Strategic Partnerships: Collaborations with companies like Nestlé for the distribution of its coffee products and with delivery services enhance its revenue channels. The combination of these streams, along with a strong focus on customer loyalty programs, contributes significantly to Starbucks' financial performance.

Starbucks Financial Statement Overview

Summary

Starbucks exhibits robust revenue growth and effective cash flow generation, supporting its operational and strategic initiatives. However, high leverage and declining net margins highlight potential financial risks. The company must focus on improving profitability and reducing financial leverage to enhance long-term stability.

Income Statement

Starbucks demonstrates strong revenue growth with a 12.7% increase in total revenue from 2022 to TTM (Trailing-Twelve-Months). The gross profit margin is robust at 36.5% for the TTM, indicating efficient cost management. However, the net profit margin has slightly decreased to 8.6% in TTM, reflecting potential challenges in controlling non-operating expenses. The EBIT margin is solid at 12.5%, but slightly down from previous periods, suggesting a need to enhance operational efficiency. Overall, the income statement shows a healthy top-line growth but slight pressure on profitability margins.

Balance Sheet

Starbucks’ balance sheet reflects high leverage with a negative stockholders' equity of $7.6 billion in TTM, indicating a debt-heavy capital structure. The debt-to-equity ratio is not calculable due to negative equity, emphasizing the financial risk. Despite this, the company maintains a stable asset base of $31.6 billion, demonstrating resilience. The equity ratio is negative, highlighting potential vulnerability. While Starbucks manages its assets well, the high leverage poses a significant risk to financial stability.

Cash Flow

Starbucks shows strong cash flow generation with operating cash flow of $5.28 billion in TTM and a healthy free cash flow of $3.06 billion. The free cash flow to net income ratio is high, indicating efficient cash conversion. However, a decline in operating cash flow compared to the previous year suggests the need for improved cash management. Despite minor fluctuations, the company's cash flow remains strong, supporting its operational needs and capital expenditure.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	36.35B	36.18B	35.98B	32.25B	29.06B	23.52B
Gross Profit	9.07B	9.71B	9.85B	8.37B	8.39B	5.06B
EBITDA	6.33B	7.12B	7.40B	6.24B	7.35B	3.10B
Net Income	3.13B	3.76B	4.12B	3.28B	4.20B	928.30M
Balance Sheet
Total Assets	31.63B	31.34B	29.45B	27.98B	31.39B	29.37B
Cash, Cash Equivalents and Short-Term Investments	3.01B	3.54B	3.95B	3.18B	6.62B	4.63B
Total Debt	26.01B	25.80B	24.60B	23.80B	23.61B	25.26B
Total Liabilities	39.25B	38.78B	37.43B	36.68B	36.71B	37.17B
Stockholders Equity	-7.62B	-7.45B	-7.99B	-8.71B	-5.32B	-7.81B
Cash Flow
Free Cash Flow	2.77B	3.32B	3.68B	2.56B	4.52B	114.20M
Operating Cash Flow	5.57B	6.10B	6.01B	4.40B	5.99B	1.60B
Investing Cash Flow	-2.93B	-2.70B	-2.27B	-2.15B	-319.50M	-1.71B
Financing Cash Flow	-2.72B	-3.72B	-2.99B	-5.64B	-3.65B	1.71B

Starbucks Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 85.43
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SBUX, the sentiment is Negative. The current price of 85.43 is below the 20-day moving average (MA) of 89.39, below the 50-day MA of 91.14, and below the 200-day MA of 93.21, indicating a bearish trend. The MACD of -1.19 indicates Positive momentum. The RSI at 38.28 is Neutral, neither overbought nor oversold. The STOCH value of 26.03 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for SBUX.

Starbucks Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TXRH	74 Outperform	$11.22B	25.75	32.28%	1.57%	14.59%	18.98%
YUMC	74 Outperform	$16.57B	18.57	15.84%	1.96%	3.53%	16.64%
BROS	71 Outperform	$10.85B	140.11	9.99%	―	29.80%	85.84%
MCD	70 Outperform	$224.34B	26.93	-216.57%	2.25%	1.17%	2.09%
SBUX	66 Neutral	$97.11B	36.95	-47.07%	2.86%	0.60%	-35.19%
YUM	64 Neutral	$40.13B	28.56	-19.43%	1.94%	11.30%	-7.82%
Sector *	61 Neutral	$17.92B	12.81	-3.11%	2.97%	1.30%	-14.28%

Starbucks Corporate Events

Starbucks Approves Performance-Based Stock Units for Executives

On June 29, 2025, Starbucks‘ Board of Directors approved performance-based restricted stock units for its executive officers as part of the ‘Back to Starbucks’ strategy. This initiative aims to motivate leaders to achieve transformation goals, including reducing operating expenses and enhancing in-store experiences, with potential shareholder value creation. The awards, valued at $6,000,000, are contingent on meeting specific targets by fiscal year 2027, with payouts linked to operational achievements and shareholder returns.

Starbucks Updates Bylaws for Enhanced Transparency

On June 25, 2025, Starbucks Corporation’s board of directors amended the company’s bylaws to align with the SEC’s universal proxy rules and updated procedures for shareholder director nominations and business proposals. These changes are expected to enhance transparency and modernize shareholder engagement, potentially impacting the company’s governance and stakeholder interactions.

Starbucks Expands Board with New Appointments

On June 25, 2025, Starbucks announced the expansion of its Board of Directors from nine to eleven members, appointing Marissa Mayer and Dambisa F. Moyo as new directors. This strategic move is expected to enhance Starbucks’ focus on technology, transformation, and global affairs, aligning with its ‘Back to Starbucks’ strategy to leverage digital tools and strengthen its market position.

Starbucks Enters New Five-Year Credit Agreement

On June 13, 2025, Starbucks Corporation entered into a new Five-Year Credit Agreement with several financial institutions, including Bank of America and Wells Fargo, among others. This new agreement led to the termination of a previous credit agreement from September 16, 2021, reflecting Starbucks’ strategic financial adjustments to support its operations and growth.

Starbucks Appoints Mike Grams as COO

On June 4, 2025, Starbucks Corporation announced the appointment of Mike Grams as the new Chief Operating Officer, reinstating the position within its executive leadership team. This strategic move aims to enhance leadership accountability and operational efficiency by consolidating global coffeehouse development and supply chain under Grams’ oversight. Additionally, the company is undergoing organizational changes to strengthen its focus on sustainability and brand integration, with key leadership roles being restructured to accelerate progress towards its business goals. The departure of Brad Lerman, the Chief Legal Officer, was also announced, with a search for his successor underway.