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S

SBUX

Equity

Starbucks Corp·XNAS

Starbucks Corporation, together with its subsidiaries, operates as a roaster, marketer, and retailer of coffee internationally.

Price

$97.87

Today

+0.35%

Decision

Reduce

Score

40/100

Decision context

Recommendation

REDUCE

74% conviction

Score 40 · Reduce

A cautious picture — if you own it, consider taking some off.

Estimated value range

The stock trades 63.5% above our estimate.

Current price

$97.87

Estimated value range

$28.70 – $48.83

Gap vs AlphaDog estimate

−63.5%

Estimate $35.69Analyst targets (not AlphaDog) · mean $110.97 · $82.00–$143.00Method: peer multiples and cash-flow model

Valuation model implies significant downside (>20%) — may reflect peer selection or cyclical factors. Treat with caution.

Trading above the estimated range reinforces the cautious recommendation.

Market context

Price

$97.87+0.35% today(+$0.34)

Price when available

Pick how far back the chart looks

Returns when this report was written (not live)

1 month

+0.9%

3 months

-7.0%

6 months

-2.5%

1 year

+17.7%

At a glance

A large company is in a pullback at premium pricing.

Company size
$111.57BLarge company
Recent trend
+17.7% over 1 yearSoft
What you pay for $1 of earnings
56.6× last year’s earningsPricey

Top holders

  • Capital Research Global Investors9.62% · 2026-06-30
  • Capital World Investors8.02% · 2026-06-30
  • Blackrock Inc.7.30% · 2026-06-30
  • Vanguard Capital Management LLC6.53% · 2026-06-30
  • State Street Corporation4.32% · 2026-06-30

Earnings on 2026-10-29 · 9 days away (estimated)

Financial trajectory

Revenue & profit

Visualizing multi-period financial trajectory across 5 years

Rev (FY 2025):$37.18B+2.8% (YoY)
Net Margin (FY 2025):5%
Free Cash Flow (FY 2025):$2.44B-26.4% (YoY)
Net Debt / Cash:Net Debt $23.14B
Revenue Gross Profit Net Income Net Margin (%)
Fiscal year annual reporting (FY)

Executive summary & thesis

Neutral growth (58.6/100), but base target implies 63.5% downside — P/E 56.6x.

View source

Things to keep in mind

  • 1Base target implies 63.5% downsideView source
  • 2P/E 56.6xView source
  • 3Net margin 5.2%View source

What to watch next

What changed recently

No material changes found in the last 30 days.

Why this rating

Score 40 · Reduce

Data through

Stale Statements

Jun 30, 2026

A newer quarter has been reported and is not in these statements. The rating is capped at Hold until the statements catch up.

Factor profile

Turnaround profile

Quality39
Growth59
Value26
Safety43
Momentum30
What would change our mind
74% conviction

Reduce

Our fair price

$35.69

If business struggles

$28.70

If things go well

$48.83

Re-evaluate if

  • Net margin falls below 4.1% (was 5.2%)

Trim / reconsider if

  • ROA falls below 5.2% (was 8.0%)
Think of these dollars as a map of our value estimate for Reduce — helpful context, not a reason to override the view.

A calmer look

What the optimistic case might still be missing about Starbucks Corp

Signal: Moderate

The prevailing Bear consensus and the scoring engine's 'Reduce' verdict (40/100 composite score) over-index on a backward-looking 56.6x trailing P/E that reflects depressed 5.2% net margins rather than normalized earnings power.

While the Judge penalized SBUX for sequential revenue contraction from $9.92B (ended 2025-12-31) to $9.32B (ended 2026-06-30), all cited quarterly financials are explicitly stale—over 90 days old as of October 2026—making top-line extrapolation hazardous. Crucially, during that same stale period ended 2026-06-30, quarterly EPS actually expanded to $0.91, signaling that cost structure improvements were already offsetting top-line softness. Furthermore, the Bear case completely ignores SBUX's robust $3.18 per share in trailing free cash flow and solid 8.0% ROA, which provide a durable floor that a 5/9 Piotroski F-score and -2.59 Beneish M-score confirm is free of accounting manipulation. However, the Bull case is equally flawed by touting a 17.7% 1-year return when the stock currently trades below both its MA50 and MA200 after a -7.0% 3-month drop. Ultimately, the consensus 'Reduce' verdict relies too heavily on stale Q2 2026 revenue numbers while ignoring the massive operating leverage latent in a $111.57B market cap franchise if net margins revert even modestly above 5.2%.

May be overlooked

  • Both sides ignore the glaring absence of reported Price-to-Book (P/B N/A) and Debt-to-Equity (D/E N/A) ratios, which typically signals negative book equity from aggressive share buybacks and masks true balance sheet leverage despite a grey-zone 2.74 Altman Z-score.

  • The Bear consensus fixates on the 56.6x P/E ratio without reconciling it against the much more reasonable 23.1x EV/EBITDA multiple and $3.18 per share in trailing free cash flow, which show cash generation is far healthier than GAAP net margin (5.2%) implies.

  • The scoring engine flags 'none identified' for red flags despite an Altman Z-score of 2.74 sitting in the grey zone and unquantified Debt/Equity (N/A), leaving credit and refinancing risks completely unexamined in the debate.

Expectations look stretched

  • The Bull case celebrates sequential EPS expansion to $0.91 in the period ended 2026-06-30, ignoring that this data is stale (over 90 days old) and was achieved via cost-cutting amidst shrinking revenue ($9.32B vs $9.92B two quarters prior) rather than organic growth.

  • Bulls extrapolate a 17.7% 1-year price return and 60th percentile momentum rank, entirely disregarding the severe medium-term breakdown where SBUX lost -7.0% over 3 months and trades below both its 50-day and 200-day moving averages.

  • The Bear consensus is overly optimistic that a -$627k 3-month net insider outflow (3 sales, 0 buys) represents a meaningful negative signal against a massive $111.57B market capitalization, where such sales represent less than 0.0006% of equity value.

Verify before you lean in

  • Cash after investing

    See whether Starbucks Corp still makes cash after it spends to grow.

  • Margin path

    See whether Starbucks Corp gross-margin gains are showing up in overall profits.

What would ease this concern

  • Net margin expands above 5.2% for two consecutive quarters
  • Revenue growth continues without margin deterioration

Go deeper

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