Starbucks Corp (SBUX, Financial), a giant in the global coffee industry, has recently seen a significant uptick in its stock performance. Over the past week, the company's shares have surged by 24.40%, and over the last three months, the stock has gained an impressive 24.01%. Currently, Starbucks boasts a market capitalization of $106.01 billion, with a share price of $93.55. According to GuruFocus's valuation metrics, the stock is currently modestly undervalued with a GF Value of $104.94, despite being significantly undervalued three months ago when the GF Value was at $116.12.
Overview of Starbucks Corporation
Starbucks Corporation, operating under the ticker SBUX, is a prominent player in the restaurant industry. The company manages over 38,000 stores across more than 80 countries. Starbucks operates through three main segments: North America, international markets, and channel development, which includes grocery and ready-to-drink beverages. The company's revenue streams are diversified, including earnings from company-operated stores, royalties, and sales of various coffee-related products and equipment to license partners.
Starbucks' Profitability Insights
Starbucks' financial health is robust, with a Profitability Rank of 9/10. The company's operating margin stands at 15.05%, which is better than 90.29% of its peers in the industry. Its Return on Equity (ROE) is exceptionally high at 10,000.00%, surpassing 99.7% of competitors. Additionally, Starbucks shows strong Return on Assets (ROA) and Return on Invested Capital (ROIC) at 13.86% and 15.56% respectively, indicating efficient management of assets and investments.
Growth Trajectory of Starbucks
Starbucks has maintained a solid Growth Rank of 8/10. The company has demonstrated a consistent increase in revenue, with a 3-year revenue growth rate per share of 16.20% and a 5-year rate of 11.50%. Its earnings per share (EPS) growth over the past three years has been particularly strong at 53.60%. Looking ahead, Starbucks is projected to grow its total revenue by 5.51% over the next 3 to 5 years, which, while modest, still positions it ahead of 27.91% of its industry peers.
Notable Shareholders in Starbucks
Several prominent investors hold significant stakes in Starbucks. Ken Fisher (Trades, Portfolio) currently holds 11,699,045 shares, representing 1.03% of the company's shares. Diamond Hill Capital (Trades, Portfolio) and Ray Dalio (Trades, Portfolio) are also notable shareholders, holding 3,133,081 and 1,948,837 shares respectively, further underscoring investor confidence in Starbucks' financial health and growth prospects.
Competitive Landscape
Starbucks faces competition from several key players in the restaurant industry. Chipotle Mexican Grill Inc (CMG, Financial) with a market cap of $67.32 billion, Yum Brands Inc (YUM, Financial) valued at $38.41 billion, and Darden Restaurants Inc (DRI, Financial) with a market cap of $16.99 billion are among its top competitors. Despite the stiff competition, Starbucks' global brand recognition and diversified business model allow it to maintain a leading position in the market.
Conclusion
In conclusion, Starbucks Corp's recent stock performance can be attributed to its strong financial health, consistent growth in key metrics, and strategic market positioning. With a solid track record of profitability and growth, coupled with significant investor interest, Starbucks remains a compelling choice for investors looking for stability and potential growth in the restaurant sector.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
