Value
4.1/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 2.0 |
| P/S | 8.2 |
| EV/EBITDA | 0.0 |
| Fwd P/E | 3.4 |
| PEG | 6.5 |
| Analyst target | 4.0 |
- ▸Forward P/E: 33.0x
- ▸PEG: 1.13
SBUX · Why this verdict
Why Starbucks (SBUX) is rated BUY WAIT
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results. How we score · Editorial policy
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VerdictBUY WAIT
Overall score5.0/10
ConfidenceHIGH
MacroRISK_OFF
TrendMatrix Research · core thesis
Engine thesis — one sentence
Starbucks has broken to a golden cross technical setup with strong price momentum at 7.4 out of 10 and rising volume accumulation, but business quality is below the minimum threshold at 3.2 out of 10, the stock has missed earnings estimates in 3 of the last 4 quarters by an average of -35%, and geographic concentration in North America at 74% limits the growth story.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
The company missed earnings estimates in 3 of the last 4 quarters with a deeply negative average surprise of -35.4%, including misses of -76.8% and -54.3% in the prior two quarters, indicating fundamental execution has been significantly below expectations. Earnings | EPS surprise rises above 0% in at least 3 of the next 4 quarters, demonstrating that the new management team has reset the guidance baseline to an achievable level. | →Stable |
| CounterThe most recent quarter showed a 14.5% positive surprise, which may signal a reset in guidance that makes future beats more likely; a single positive quarter after a miss streak can mark a turning point. | ||
The stock is in a golden cross pattern — the 50-day moving average has crossed above the 200-day — with rising on-balance volume and RSI at 50, which historically marks the early stages of a sustained price recovery for large-cap consumer companies. V9 | Price rises above $115, more than 13% above the current $101.59, within 12 months as the technical breakout attracts momentum buyers. | →Stable |
| CounterA golden cross can be a lagging indicator that coincides with the end of a relief rally rather than the start of a sustained uptrend; the lack of earnings improvement would undermine any technically driven move. | ||
North America represents 74% of revenue, creating significant dependence on a single market where same-store sales trends have been negative, limiting the company's ability to diversify its way out of a domestic slowdown. Bear case | International revenue as a proportion of total grows above 30% within 2 years, reducing the North American concentration below 70%. | →Stable |
| CounterHigh domestic concentration in a market where Starbucks has decades of brand equity and deep customer loyalty may be a strength rather than a risk; attempting to dilute focus with aggressive international expansion has historically created execution problems for consumer brands. | ||
Business quality is below the minimum threshold at 3.2 out of 10, with gross margin scoring near zero and free cash flow at -87% of net income, reflecting that reported earnings are significantly higher than actual cash generation. Quality breakdown | Quality score improves above 4.0 within 12 months as operating margins recover and free cash flow approaches positive territory. | →Stable |
| CounterQuality scores below minimum often reflect heavy capital deployment cycles in consumer brands, such as store refreshes and technology investments, that are expensed rather than capitalized; these may be one-time rather than structural drags. | ||
The company missed earnings estimates in 3 of the last 4 quarters with a deeply negative average surprise of -35.4%, including misses of -76.8% and -54.3% in the prior two quarters, indicating fundamental execution has been significantly below expectations.
→StableEarnings
- Expectation
- EPS surprise rises above 0% in at least 3 of the next 4 quarters, demonstrating that the new management team has reset the guidance baseline to an achievable level.
CounterThe most recent quarter showed a 14.5% positive surprise, which may signal a reset in guidance that makes future beats more likely; a single positive quarter after a miss streak can mark a turning point.
The stock is in a golden cross pattern — the 50-day moving average has crossed above the 200-day — with rising on-balance volume and RSI at 50, which historically marks the early stages of a sustained price recovery for large-cap consumer companies.
→StableV9
- Expectation
- Price rises above $115, more than 13% above the current $101.59, within 12 months as the technical breakout attracts momentum buyers.
CounterA golden cross can be a lagging indicator that coincides with the end of a relief rally rather than the start of a sustained uptrend; the lack of earnings improvement would undermine any technically driven move.
North America represents 74% of revenue, creating significant dependence on a single market where same-store sales trends have been negative, limiting the company's ability to diversify its way out of a domestic slowdown.
→StableBear case
- Expectation
- International revenue as a proportion of total grows above 30% within 2 years, reducing the North American concentration below 70%.
CounterHigh domestic concentration in a market where Starbucks has decades of brand equity and deep customer loyalty may be a strength rather than a risk; attempting to dilute focus with aggressive international expansion has historically created execution problems for consumer brands.
Business quality is below the minimum threshold at 3.2 out of 10, with gross margin scoring near zero and free cash flow at -87% of net income, reflecting that reported earnings are significantly higher than actual cash generation.
→StableQuality breakdown
- Expectation
- Quality score improves above 4.0 within 12 months as operating margins recover and free cash flow approaches positive territory.
CounterQuality scores below minimum often reflect heavy capital deployment cycles in consumer brands, such as store refreshes and technology investments, that are expensed rather than capitalized; these may be one-time rather than structural drags.
Per-dimension breakdown
Quality
4.5/10data confidence 100%| Component | Sub-score |
|---|---|
| ROA | 5.3 |
| Gross margin | 0.5 |
| Op margin | 5.2 |
| Net margin | 2.6 |
| Current ratio | 3.0 |
| FCF quality | 10.0 |
| Moat | 3.8 |
| Piotroski F | 5.6 |
- ▸Excellent cash conversion: 155% FCF/NI
- ▸No competitive moat
Growth
6.0/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 2.1 |
| EPS growth | 10.0 |
- ▸Declining revenue: -1%
Momentum
7.0/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 4.1 |
| MACD | 10.0 |
| OBV | 10.0 |
| MA position | 9.0 |
| Volume | 2.1 |
- ▸Overbought (RSI 77)
- ▸Volume accumulation (rising OBV)
- ▸Above 200-day MA
Sentiment
6.2/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 4.9 |
| Analyst rating | 7.5 |
| Price target | 6.0 |
Insider
4.3/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 5.0 |
| notable moves | 3.0 |
- ▸Negligible insider selling — $685,935 (0.001% of mkt cap)
Peer rank
3.4/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 2.0 |
| quality rank | 5.7 |
| growth rank | 1.0 |
Technical
3.5/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 1.0 |
| support resistance | 0.7 |
| 52w position | 8.8 |
Risk (lower is worse)
5.8/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 7.9 |
| days to cover | 5.9 |
| volatility | 7.1 |
| put call | 5.1 |
| implied vol | 4.2 |
| max pain risk | 3.0 |
| beta | 7.2 |
- ▸Above max pain $55
- ▸Concentration risks: 1 HIGH, 1 MED (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
5.4/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 3.3 |
| earnings timing | 5.0 |
| surprise avg | 6.8 |
| dividend safety | 4.2 |
| news activity | 8.0 |
- ▸Earnings concerns: 2B/2M
- ▸Earnings today
How the verdict was assembled
Engine trigger
Earnings today. Wait until post-earnings.
Engine technical detail
verdict_path:
L3:NEWS_BLOCK|ENTRY_STICKY:WITHIN_BANDPassed (4)
- MOMENTUM:7.0>=5.5
- INSIDER:OK
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (3)
- ASYMMETRY:-0.3=NEGATIVE
- 8K_SERIOUS:2.05
- EARNINGS_PROXIMITY:0d<=7d
Warning (0)
none
Reward-to-Risk
-0.28
Upside
-4.1%
Downside
15.0%
Sizing output
STARTER
Setup— — No clear chart pattern; technical signals are mixed
EdgeNo clear edge — No clear edge identified
SuitabilityModerate — Balanced profile
Investment implication
A recent news event triggered an L3 news-block on the verdict path. Trigger: Earnings today. Wait until post-earnings. The 10-dimension scores remain Momentum at 7.0 (strongest), but ASYMMETRY:-0.3=NEGATIVE also fails — the news block is the proximate trigger, not the sole driver.
The strongest dimensions are Momentum at 7.0, Sentiment at 6.2, and Growth at 6.0; the weakest are Peer rank at 3.4, Technical at 3.5, and Value at 4.1. The V9 engine flagged 3 failed gates, producing an asymmetric reward-to-risk of -0.28 and an engine sizing output of STARTER.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Earnings Miss Streak Quality Concern
Trip ifEPS surprise falls below -20% in at least 2 of the next 4 quarters, indicating the miss streak has resumed rather than reversed.
- P2Technical Breakout Momentum
Trip ifPrice falls below $90, more than 11% below the current $101.59, breaking the golden cross setup and confirming a failed breakout.
- P3Quality Below Minimum Threshold
Trip ifQuality score remains below 3.5 for more than 3 consecutive quarters, indicating no margin or cash flow improvement is occurring.
- P4Geographic Concentration Risk
Trip ifNorth American revenue concentration rises above 78%, increasing by more than 4 percentage points from the current 74% level.