SBUX AI Stock Analysis – Buy, Hold, or Avoid?

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Starbucks Corporation (SBUX)

$106.58+0.84 (+0.79%) today

Open
$105.57
High
$107.16
Low
$104.34
Volume
6.29M
Mkt Cap
$121.47B
52W High
$108.04
AI Verdict
Confidence 87%
SBUXStarbucks Corporation
AlphaCrew AI
HOLD
Overall
Summary

Starbucks (SBUX) is fundamentally resilient with a strong global brand and digital growth, but faces significant margin compression, high valuation, and execution risks. Technicals are bullish in the short term, yet the elevated P/E and margin headwinds temper long-term upside. Investors should hold and monitor for sustainable margin recovery and improved earnings momentum before adding or trimming positions.

By Timeframe
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Short
HOLD
Medium
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Agent Signals
131
Fund
Tech
Val
Sent
Risk

Fundamentals

Essentia
Essentia
Fundamental Analysis
MIXED

Starbucks remains a global leader in the premium coffee market, demonstrating robust top-line resilience but experiencing significant margin compression over the past several quarters. While revenue continues to grow, profitability is being challenged by rising costs and fluctuating customer demand, leading to a mixed earnings performance and a notably high valuation multiple.

Financial Highlights

Q1 2025Q2 2025Q3 2025Q4 2025Q1 2026$0$2.5B$5.0B$7.5B$10.0BRevenue & Net Income ($)0%2%4%6%8%Net Margin (%)
  • Revenue
  • Net Income
  • Net Margin (%)

Revenue

$9.53B

8.79% YoY

Q1 2026

Net Income

$510.90M

32.98% YoY

Q1 2026

Net Margin

5.36%

Q1 2026

Growth Metrics

Revenue Growth YoY

8.79%

Latest Quarter: Q1 2026

Net Income Growth YoY

32.98%

Latest Quarter: Q1 2026

Revenue Per Share Growth YoY

8.46%

Latest Quarter: Q1 2026

EPS Growth YoY

32.35%

Latest Quarter: Q1 2026

Book Value Per Share Growth YoY

-10.73%

Latest Quarter: Q1 2026

 Q1 2026Q4 2025Q3 2025Q2 2025Q1 2025Q4 2024Q3 2024Q2 2024
Revenue9.5B9.9B9.6B9.5B8.8B9.4B9.1B9.1B
Revenue Growth YoY+8.79%+5.43%+5.46%+3.75%+2.32%-0.29%-3.20%-0.59%
Net Income510.9M293.3M133.1M558.3M384.2M780.8M909.2M1.1B
Net Income Growth YoY+32.98%-62.44%-85.36%-47.07%-50.26%-23.78%-25.43%-7.61%
EPS$0.45$0.26$0.12$0.49$0.34$0.69$0.80$0.93
EPS Growth YoY+32.35%-62.32%-85.00%-47.31%-50.00%-23.33%-25.23%-7.00%

Profitability Metrics

Gross Margin

20.08%

TTM

Operating Margin

8.16%

TTM

Net Margin

5.36%

TTM

Return on Equity

-18.33%

TTM

Return on Assets

5.14%

TTM

 Q1 2026Q4 2025Q3 2025Q2 2025Q1 2025Q4 2024Q3 2024Q2 2024
Gross Margin20.08%15.63%23.11%22.80%21.09%24.49%26.25%27.91%
Operating Margin8.16%9.18%9.91%9.89%6.86%11.94%14.40%16.65%
Net Margin5.36%2.96%1.39%5.90%4.39%8.31%10.02%11.57%
Return on Equity (ROE)-6.04%-3.50%-1.64%-7.26%-5.04%-10.45%-12.21%-13.28%
Return on Assets (ROA)1.76%0.95%0.47%1.86%1.37%2.75%3.26%3.93%

Technical Analysis

Candela
Candela
Technical Analysis
BULLISH

SBUX is demonstrating a strong bullish technical setup, currently trading just below its 52-week high with a solid uptrend confirmed by moving averages and a Stage 2 advancing phase. Momentum is neutral but supportive, with RSI in a moderate zone and ADX indicating a developing trend. The stock is showing institutional accumulation, making it favorable for buyers seeking trend continuation.

RSI
Hold
Neutral66

No extreme reading

03070100
Trend
Buy
Strong Uptrend

Price in uptrend

+17.8% from 200 SMA
ADX
Buy
Strong Trend26

Strong trend active

Strong
MA Cross
Buy
Above 50/200

50 above 200 - bullish

50
200

Key Technical Values

Price
$106.58
50 SMA
$98.01
150 SMA
$91.52
200 SMA
$90.50
52W High
$108.04
52W Low
$77.99

Price with Moving Averages

50-day, 150-day and 200-day simple moving averages

Price
50 SMA
150 SMA
200 SMA

Relative Strength Index

Momentum oscillator measuring speed and magnitude of price changes

RSI (14)

≤30 Oversold
≥70 Overbought
66Neutral

Earnings

Essentia
Essentia
Fundamental Analysis
MIXED

Starbucks remains a global leader in the premium coffee market, demonstrating robust top-line resilience but experiencing significant margin compression over the past several quarters. While revenue continues to grow, profitability is being challenged by rising costs and fluctuating customer demand, leading to a mixed earnings performance and a notably high valuation multiple.

Latest Earnings

Q1 2026 Earnings (Mar 29, 2026)

Earnings Per Share (EPS)

Beat

Actual

$0.50

Estimated

$0.43

Surprise

+$0.07

Surprise %

+17.56%

Revenue

Beat

Actual

$9.53B

Estimated

$9.17B

Surprise

+$362.61M

Surprise %

+3.95%

Historical Earnings

 Q1 2026Q4 2025Q3 2025Q2 2025Q1 2025Q4 2024Q3 2024Q2 2024
Earnings Per Share
EPS (Actual)$0.50$0.56$0.52$0.50$0.41$0.69$0.80$0.93
EPS (Estimated)$0.43$0.59$0.56$0.65$0.49$0.68$1.03$0.93
EPS Surprise+$0.07-$0.03-$0.04-$0.15-$0.08+$0.01-$0.23+$0.00
% Diff+17.6%-4.4%-6.5%-22.7%-15.6%+1.5%-22.3%+0.0%
Revenue
Revenue (Actual)$9.53B$9.92B$9.57B$9.46B$8.76B$9.4B$9.07B$9.11B
Revenue (Estimated)$9.17B$9.65B$9.33B$9.29B$8.83B$9.32B$9.2B$9.25B
Revenue Surprise+$362.61M+$260.9M+$241.63M+$161.14M-$68.2M+$82.26M-$124.5M-$135.04M
% Diff+4.0%+2.7%+2.6%+1.7%-0.8%+0.9%-1.4%-1.5%

Valuation

Valorem
Valorem
Valuation Analysis
OVERVALUED

Starbucks currently trades at a significant premium relative to its restaurant sector peers, reflecting high expectations for growth and brand strength despite recent earnings and margin pressures. Analyst sentiment is generally positive with most recommending Buy or Moderate Buy, but valuation multiples suggest the stock is priced for strong long-term growth. The company faces challenges in margins and operational metrics but compensates with robust revenue growth and global brand resilience.

Valuation Metrics

Price to Earnings

81.20

TTM

Price to Sales

3.16

TTM

Price to Book

-14.35

TTM

Enterprise Value to EBITDA

26.90

TTM

Enterprise Value to Revenue

3.75

TTM

 Q1 2026Q4 2025Q3 2025Q2 2025Q1 2025Q4 2024Q3 2024Q2 2024
Price to Earnings48.3583.00183.5246.6372.5132.9130.4920.71
Price to Sales10.379.8310.2111.0112.7210.9412.229.59
Price to Book-11.67-11.61-12.07-13.55-14.62-13.76-14.88-11.00
Enterprise Value to EBITDA102.7293.6285.8790.72126.5879.0276.8856.06
Enterprise Value to Revenue12.7612.8712.6613.5215.3813.3014.7012.01

Sentiment & Analyst Ratings

Pulse
Pulse
Sentiment Analysis
MIXED

Starbucks (SBUX) sentiment is cautiously optimistic as recent strong Q2 fiscal 2026 results and strategic initiatives bolster confidence among analysts and investors. Despite high valuation concerns, momentum from sales recovery and international growth efforts supports a positive outlook in both news coverage and social media discussions.

Analyst Recommendations

As of May 1, 2026
Strong SellSellHoldBuyStrong Buy
Hold
3.4 / 5.0
Based on 39 analyst ratings
Strong Sell
2
Sell
2
Hold
18
Buy
12
Strong Buy
5

Risk Assessment

Sentinel
Sentinel
Risk Assessment
MODERATE

Starbucks faces moderate financial risk characterized by a leveraged balance sheet and liquidity metrics below ideal thresholds. The company operates in a highly competitive and dynamic market environment with rising labor costs, commodity price volatility, and geopolitical uncertainties impacting international growth. Ongoing operational restructuring and labor negotiations present execution risks but also strategic renewal opportunities.

Liquidity & Solvency

Current Ratio

0.92

Latest Quarter: Q1 2026

Quick Ratio

0.73

Latest Quarter: Q1 2026

Debt-to-Equity

-2.88

Latest Quarter: Q1 2026

Debt-to-Assets

0.80

Latest Quarter: Q1 2026

 Q1 2026Q4 2025Q3 2025Q2 2025Q1 2025Q4 2024Q3 2024Q2 2024
Liquidity Metrics
Current Ratio0.921.050.720.760.640.750.750.89
Quick Ratio0.730.860.510.550.450.570.560.65
Solvency Metrics
Debt-to-Equity-2.88-4.00-3.29-3.63-3.41-3.46-3.46-3.18
Debt-to-Assets0.801.040.830.830.820.810.820.84

Liquidity Assessment

Current Ratio: 0.92(Weak)

Quick Ratio: 0.73(Weak)

The company has relatively weak liquidity and may face challenges meeting short-term obligations.

Solvency Assessment

Debt-to-Equity: -2.88(Low)

Debt-to-Assets: 0.80(High)

The company has conservative debt levels, indicating low financial risk and strong long-term solvency.

Frequently Asked Questions about SBUX

AI Answers: Common Questions About SBUX

Get AI-powered answers to the questions investors ask most about Starbucks Corporation

SBUX is not a clear buy at current levels given its high P/E of 80.1 and EV/EBITDA above 25, both well above industry averages, and ongoing margin compression. While technicals are bullish and recent earnings were strong, the stock is priced for perfection and any misstep could trigger downside. Consider buying only on a confirmed breakout or pullback to support around $97.50.

If you are a long-term investor, there is no urgent reason to sell unless you are concerned about ongoing margin erosion and high leverage. Technicals remain bullish and sentiment is improving, but if the stock fails to break above $107.55 or margins deteriorate further, consider trimming exposure.

The biggest risks are margin compression (gross margin now just above 24%, net margin below 5%), high leverage (debt-to-assets near 0.8, current/quick ratios below 1), and execution risks in labor negotiations and international markets. A cash flow crunch or further cost inflation could pressure the stock.

Short-term, the upside target is $107.55 (52-week high), with potential extension to $110 if momentum continues; downside support is $97.50-$100. Analyst targets cluster around $110-$115, but further upside depends on margin recovery and sustained earnings beats.

SBUX is overvalued relative to peers, with a P/E of 80.1 (double sector median) and EV/EBITDA above 25, while its price-to-sales is only moderately elevated. The premium reflects brand strength and growth expectations, but is not fully justified by current earnings trends.

Fundamentals are mixed: revenue is growing steadily, but margins have compressed sharply (gross margin down from 27% to 24%, net margin below 5%), and ROE has dropped from 30%+ to mid-teens. The balance sheet is leveraged and liquidity is below ideal, so profit recovery is critical.

Technicals are bullish: price is above all major moving averages, RSI is neutral at 62.6, and a golden cross supports trend continuation. A breakout above $107.55 could trigger further upside, while support is strong near $97.50-$100.

Key catalysts include upcoming earnings reports, margin improvement initiatives, international expansion progress (especially in China), and resolution of labor negotiations. Watch for a breakout above $107.55 or any guidance changes from management.

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