Are you one of these investors to ask themselves: Is Starbucks a good stock to buy? Well, right now the iconic coffee brand’s stock is deep in the red over the previous 12 months. But the stock seems to slowly recover since its yearly low of $70.06 In May. Let’s consider if investors should buy Starbucks stock now by studying some current data. If you are interested in learning some facts and stats about Starbucks, please check here.
Starbucks Revenue 2022
According to Starbucks Investor Relations “Consolidated net revenues up 9% to a quarterly record $8.2 billion, including a 2% adverse impact from foreign currency translation.
Starbucks Revenue History
According to the data offered by macrotrends the coffee company has shown a very positive revenue history.
“Starbucks revenue for the quarter ending June 30, 2022 was $8.150B, a 8.72% increase year-over-year.
Starbucks revenue for the twelve months ending June 30, 2022 was $31.983B, a 17.94% increase year-over-year.
Starbucks annual revenue for 2021 was $29.061B, a 23.57% increase from 2020.
Starbucks annual revenue for 2020 was $23.518B, a 11.28% decline from 2019.
Starbucks annual revenue for 2019 was $26.509B, a 7.24% increase from 2018.”
Starbucks Operating Margin – Is Starbucks a Good Stock to Buy
GAAP operating margin of 15.9% decreased 400 basis points from 19.9% in the prior year, primarily driven by inflationary pressures, investments in labor including enhanced store partner wages as well as sales deleverage related to COVID-19 restrictions in China, partially offset by pricing in North America and leverage across markets outside of China.
Keeping operating margins high seems to be challenging in these inflation driven economic times.
Q3 2022 GAAP EPS $0.79; Non-GAAP EPS of $0.84, Driven by U.S. Performance and Global Demand Outside of China.
Let’s compare these numbers with pre Covid data: In Q3 2018 GAAP EPS of $0.61; Non-GAAP EPS of $0.62, Up 13% Year-Over-Year.
If we look back even a little further, here is what the Starbucks Q3 2015 Data looked like: Q3 2015 GAAP EPS $0.41; Non-GAAP $0.42.
In comparison the Earnings per share have developed very positive over the previous years.
Starbucks Digital Strategy – Is Starbucks a Good Stock to Buy?
At Starbucks mobile orders, drive-thru, and delivery added up to 72% of U.S. revenue in Q3. This means that digital orders became imperative at the pandemic’s onset, and management quickly emphasized the feature. There is no doubt that this will be a long term advantage for the coffee company. Furthermore, Excluding drive-thru, the other digital options do not require a Starbucks employee to take an order and process a payment. As customers use these ordering options more often, it could reduce the strain on Starbucks locations’ employee shortages, which have become a struggle since the outbreak of COVID-19. In addition, this will reduce costs, improve speed and customer satisfaction.
That creates the potential for Starbucks to become an even more profitable business in the long run after fully recovering from the covid challenges. In addition, this is one reason why we could say yes to our question: Is Starbucks a Good Stock to Buy.
Is Starbucks a Good Stock to Buy?
Let’s look at some more data. According to CNN Money “the current consensus among 33 polled investment analysts is to hold stock in Starbucks Corp. This rating has held steady since September, when it was unchanged from a hold rating. So let’s compare the stock price in September 2021 with the current Starbucks stock price.
On the 21st of September 2022 the Starbucks Stock price was $88.60 compared to 21st of September 2022 $112. This means that in a year the Starbucks Stock has lost $23.40 per share. Would you be happy if you had followed the stock analyst’s advice to hold the stock?
Why Investors Dislike The Starbucks Stocks
In March 2022 Jefferies analyst Andy Barish “pointed to three things that are holding back shares of Starbucks.”The factors weighing on the stock include:
(1) unionization activities at Starbucks stores;
(2) backlash around pricing increases in China/Omicron restrictions; and
(3) still some overhang from the fiscal year 2022 guidance reductions on the 2/1/22 1Q earnings call.”
In March of 2022 the Starbucks stock price was approximately between $83 and $91.5. At the same time Starbucks had announced that founder Howard Schultz would take over as interim CEO.
Starbucks Price per Earnings Ratio – Is Starbucks a Good Stock to Buy?
Starbucks PE Ratio: 24.95 for Sept. 21, 2022. Si is this cheap or expensive? Let’s compare what other stocks you could buy instead. Apple PE Ratio: 25.36 for Sept. 21, 2022. This means you could buy an apple stock for the same price per earnings ratio. Here are a few more companies to compare:
- McDonald’s PE Ratio: 30.91 for Sept. 21
- The Wendy’s Co: 24.09
- Costco Wholesale PE Ratio: 38.82 for Sept. 21, 2022
- Tesla 108.80 for Sept. 21, 2022
A Word from healthylifestyleflorida.com – Is Starbucks a Good Stock to Buy
In my opinion Starbucks data is very positive and would justify a much higher stock price. You could argues that the stock is still to expensive and you should wait a little longer. But at the end of the day the answer to the question: “Is Starbucks a Good Stock to Buy” is not only based on data. Beside the fact that it could be still too expensive, it also seems that investors currently don’t have enough trust in the company. If you do, this might be a good time to buy the stock!