Should you buy Starbucks stock? (August 2024)

Published first at Starbucks stock analysis. Ticker: $SBUX Starbucks stock is down 22% this year taking the company’s market cap to 85.5 billion dollars. With 4.1 billion of cash and investments and 15.6 billion of debt, the enterprise value is 97 billion. Revenue over the last 12 months comes to 36.5 billion with just over 4 billion of net income and 3.8 billion of free cash flow. So the stock is currently valued at 21 times earnings and 25 times free cash flow. That valuation doesn’t look particularly appealing when looking at the company’s recent performance. Total returns in the stock are now negative 14% over the past 5 years. In the latest quarter, US same store sales fell 2%. The same metric in China was negative 14%. From a top down perspective it looks like Starbucks has lost its way. The company’s goal to be a “third place” between home and work seems to have faded. Locations are less comfortable, and customers are spending less time there: the mobile app and the drive thru now account for more than 70% of Starbucks’ sales. #investing #stockanalysis #3mb