Starbucks Corporation Intrinsic Value Calculation – Starbucks Stock Drops as Holiday Quarter Forecast Appears Weak
December 6, 2023
🌧️Trending News
Starbucks Corporation ($NASDAQ:SBUX), the world’s largest coffee company, has seen its stock price drop recently as the company forecasted a weak holiday quarter. The decline comes as investors express concerns that Starbucks may not be able to hit projections for the season. This is not the first time that the company has seen a drop in its stock price, as the company has had rough periods in the past few years. This latest drop came as a result of a weak holiday quarter forecast. Although the company is still profitable, investors are worried that it may not meet its projections in the upcoming months.
Despite this recent decline, Starbucks has invested heavily in digital initiatives that have helped bolster sales in recent years. The company has also continued to focus on expanding its presence in international markets, which could help bolster revenues in the long term. As such, Starbucks’ future prospects remain strong despite the current slump in its stock price.
Price History
On Tuesday, Starbucks Corporation experienced a dip in its stock price after the company forecasted a weak holiday quarter. Starbucks opened at 97.4 and closed at 95.5, representing a 2.1% decline from the previous day’s closing price of 97.6. Investors were worried that the company would not be able to deliver the same strong performance as it had in previous quarters due to a number of external factors, such as increasing competition in the coffee market and slowing economic growth in its key markets. Despite the stock decline, many analysts remain confident in Starbucks’ long-term prospects and are optimistic that its strategies for delivery and mobile ordering will help it stay competitive. Live Quote…
About the Company
Income Snapshot
Below shows the total revenue, net income and net margin for Starbucks Corporation. More…
| Total Revenues | Net Income | Net Margin |
| 35.98k | 4.12k | 11.3% |
Cash Flow Snapshot
Below shows the cash from operations, investing and financing for Starbucks Corporation. More…
| Operations | Investing | Financing |
| 6.01k | -2.27k | -2.99k |
Balance Sheet Snapshot
Below shows the total assets, liabilities and book value per share for Starbucks Corporation. More…
| Total Assets | Total Liabilities | Book Value Per Share |
| 29.45k | 37.43k | -7 |
Key Ratios Snapshot
Some of the financial key ratios for Starbucks Corporation are shown below. More…
| 3Y Rev Growth | 3Y Operating Profit Growth | Operating Margin |
| 15.2% | 53.6% | 16.5% |
| FCF Margin | ROE | ROA |
| 10.2% | -45.5% | 12.6% |
Analysis – Starbucks Corporation Intrinsic Value Calculation
At GoodWhale, we have carefully analyzed the fundamentals of STARBUCKS CORPORATION and are pleased to provide our analysis. By using our proprietary Valuation Line, we have determined that the intrinsic value of each STARBUCKS CORPORATION share is approximately $119.4. However, currently the stock is trading at $95.5, meaning it is undervalued by around 20.0%. More…
Peers
In the fast-paced world of coffee, there are always new challengers trying to take down the reigning champion, Starbucks Corp. In recent years, McDonald’s Corp, Domino’s Pizza Inc, and Chipotle Mexican Grill Inc have all made moves to try and capture a larger share of the market. While each company has its own unique approach, they all share one common goal: to unseat Starbucks as the king of coffee.
– McDonald’s Corp ($NYSE:MCD)
McDonald’s Corp is a fast food restaurant chain. The company was founded in 1940 as a barbecue restaurant operated by Richard and Maurice McDonald. In 1948, they introduced the Speedee Service System, which was a precursor to the fast food restaurant. The company began franchising in 1955 and now operates over 36,000 restaurants in more than 100 countries. McDonald’s Corp has a market cap of 181.34B as of 2022, a Return on Equity of -90.17%. The company has been struggling in recent years with declining same store sales and increased competition from other fast food chains.
– Domino’s Pizza Inc ($NYSE:DPZ)
Domino’s Pizza Inc is a publicly traded company with a market cap of 11.37B as of 2022. The company has a Return on Equity of -11.44%. Domino’s Pizza Inc is a pizza delivery company. The company was founded in 1960 and is headquartered in Ann Arbor, Michigan.
– Chipotle Mexican Grill Inc ($NYSE:CMG)
Chipotle Mexican Grill Inc is a American chain of fast casual restaurants in the United States, United Kingdom, Canada, Germany, and France. As of December 31, 2020, there were 2,742 Chipotle restaurants in operation.
The company has a market cap of 42.81B as of 2022 and a Return on Equity of 27.52%. Chipotle Mexican Grill Inc is a company that focuses on providing its customers with a fast casual dining experience. The company has been able to grow its market cap and ROE through its expansion into new markets and by providing a quality product and dining experience to its customers.
Summary
Recent analysis on Starbucks’ stock has investors concerned that the company’s holiday quarter may not be as strong as expected. The stock dropped recently as a result. Analysts anticipate that Starbucks’ 4th quarter sales could be hurt due to its ongoing store remodeling program, investments in technology, and the rising costs of labor. Despite these issues, analysts remain confident that Starbucks has a strong core business and their long-term prospects remain positive.
In addition, they believe that initiatives such as delivery and loyalty programs will help the company drive future growth. Investors should be cautious when making decisions about the stock as uncertainty still remains.
