Starbucks Corp (SBUX) stock analysis

P/E above its 5-year median

Starbucks's P/E of 63.2 is above its own 5-year median of 31.3.

P/E above the industry

Starbucks's P/E of 63.2 is above the Eating and Drinking Places median of 28.5.

EV/EBITDA above its 5-year median

Starbucks's EV/EBITDA of 29.1 is above its 5-year median of 18.9.

P/S above the industry

Starbucks's price-to-sales of 3.27 is above the Eating and Drinking Places median of 0.73 (book value is negative, so we use sales).

Trading above fair value

The share price of $109.89 is above our fair value estimate of $50.56.

Margin of safety under 20%

The price is 117% above fair value, so there is no margin of safety.

Revenue growing under 10% a year

Revenue grew 4.9% a year over the last three fiscal years, short of the 10% we look for.

EPS growing under 10% a year

Diluted EPS grew -16.8% a year over the last three fiscal years.

Earnings growth not accelerating

Net income grew -24.7% over the last twelve months, against a 5-year average of 14.9% a year.

Growing slower than the industry

Revenue grew 4.5% over the last twelve months; the Eating and Drinking Places median is 5.9%.

Guidance raised

Starbucks raised its Year Ended Sep 27, 2026 Diluted net earnings per share (GAAP) outlook on Jul 29, 2026.

Gross margin trend

This company does not report gross profit.

Return on equity

Needs positive equity and five years of results.

Return on capital over 10%

Return on invested capital was 53.9%, above the 10% that usually covers the cost of capital.

Return on equity against the industry

Needs positive equity.

Earnings grew over 5 years

Net income grew 14.9% a year on average over the last five fiscal years.

Net margin below its 5-year average

Net margin was 5.2% over the last twelve months, against a 5-year average of 10.3%.

Net margin above the industry

Starbucks's net margin of 5.2% is above the Eating and Drinking Places median of 1.9%.

Debt level

Needs debt and equity figures.

Debt trend

Needs a balance sheet from five years ago with positive equity.

Debt covered by cash flow

Operating cash flow over the last twelve months equals 37.5% of total debt.

Interest well covered

Operating income covers interest expense 5.4 times.

Short-term assets don't cover short-term debts

Current assets are 0.76 times current liabilities.

Low bankruptcy risk

The Altman Z-score is 3.27; above 3 is the safe zone and below 1.8 the distress zone.

Pays a dividend

Starbucks paid dividends worth 2.3% of the share price over the last twelve months.

Yield below Treasuries

The 2.3% yield is below the 4.4% on a 1-year Treasury.

Yield below the top quarter

The top quarter of US dividend payers yield 3.8% or more; Starbucks yields 2.3%.

Dividend was cut

The dividend per share fell by more than 10% at least once in the last 10 fiscal years.

Not covered by earnings

Dividends take 142% of net income, leaving little room.

Covered by free cash flow

Dividends take 77.2% of free cash flow.