Starbucks Corp (SBUX) Financial Statements

Starbucks's financial quality, assessed through the GoodMoat framework, shows significant weaknesses. The operating margin of 7.2% and profit margin of 3.6% are low, failing to meet the typical high-margin thresholds for a quality business. Revenue growth of 5.5% YoY is modest and does not indicate strong operating leverage or accelerating growth. The free cash flow yield of 2.3% is positive but low, translating to a high P/FCF multiple, which is unfavourable when growth is in the single digits. The P/E ratio of approximately 77x is extremely high relative to the company's growth rate, indicating the stock is priced for perfection. From a balance sheet perspective, the provided data shows a Debt/Equity ratio that is not available, but a low FCF yield coupled with a high market valuation can limit financial flexibility. Overall, the company scores poorly on key Quality Indicators such as gross/operating margins, ROIC, and revenue growth strength. The Growth Assessment also shows a trajectory that is not durable or high enough to justify the current valuation multiples, with growth drivers appearing muted. The combination of low margins, moderate growth, and extreme valuation presents an unfavourable risk/reward profile from a value investing standpoint. Analysis based on data as of 2024-05-15.