Business quality: weaker than mostValuation: pricier than most
A weaker business than most consumer discretionary companies, priced above most of them.
Starbucks trades at 34.9 times the next 12 months of expected earnings, against a median of 19.5x for the 66 consumer discretionary stocks we cover. The quality score blends where it ranks on revenue growth, gross margin, operating margin and free-cash-flow margin (net margin for banks and insurers) over the last 12 months, from SEC filings.
- Revenue grew slower than the sector median: +4.5% vs +8.1%
- Less profitable (operating margin): 7.8% vs 13.8%
- Turns less of its sales into cash: 9.5% vs 10.1%