Starbucks Corporation SBUX
Verdict: Sell. Fair value $70.77 against a price of $90.62 on 6 Jan 2026, 22% below the price.
In plain words
The case for: Narrow competitive moat provides durability. Market leadership enables pricing power. Industry tailwinds with growing market.
The case against: Intense competitive pressure could compress margins. Net Income plummeted by 50.5% from $3.76B in 2024 to $1.86B in 2025, while revenue grew by 2.8%.... The company has missed analyst earnings estimates for the last three reported quarters. The overall....
Main risks
- Negative Stockholder's Equity (-$8.1B) indicates liabilities exceed assets, creating a highly fragile balance sheet and making metrics like ROE meaningless.
- Collapsing Profitability: Net Income has fallen over 50% from $4.12B (2023) to $1.86B (TTM) despite revenue growth, with Net Margin halving from >11% to 5.0%.
- Decelerating Growth and Poor Execution: Revenue growth has slowed to 2.8% from 11.6% two years prior, and the company has missed earnings estimates for three consecutive quarters.
- Net Income plummeted by 50.5% from $3.76B in 2024 to $1.86B in 2025, while revenue grew by 2.8%...
- The company has missed analyst earnings estimates for the last three reported quarters. The overall...
- Intense competitive environment