This analysis attributes an Overall Score to a company by analyzing several aspects that I consider to be among the most important.
In summary, a company to have an overall score close to 100% must have the following characteristics:
- Report high growth rates in the last 3 years (and in the last quarter) in terms of Revenue, Gross Profit, Operating Income and Net Income. Furthermore, it must operate with high and improving margins in recent years.
- Analysts expect Earnings Per Share (EPS) and revenues to grow in the short term (in the next quarter) and in the medium to long term (in the next 5 years). Moreover, they expect the company to be undervalued at current prices and in the last quarter their EPS expectations must have been beaten with a consequent rise in share prices.
- The stock price of the company must have outperformed the S&P 500 index and in the last 3 months the Hedge Funds and Insiders bought shares in the company.
The overall score ranges from -100% (if the characteristics listed above are all very negative) to +100% and it is unlikely that there will be a company with a +100% score because the requirements for achieving this score are very high, however a score higher than +40% can be considered good.
This analysis alone is not enough to decide whether or not to invest in a company because it does not provide indications on the timing of entry, but it is a good starting point.
Starbucks Corp (SBUX)
- Overall Score: +37%
- not excellent
- The most promising area is that related to analyst expectations
- in addition to reporting higher than expected EPS in the last quarter, analysts are forecasting continued EPS growth over the next 5 years for SBUX
- In the last 3 years SBUX has had modest growth in all items, but all margins are worsening
- Clear outperformance of SBUX compared to the S&P 500 index since the beginning of 2019
- Insiders and hedge funds are decreasing their positions in the last 3 months
Starbucks Corporation is an American coffee company and coffeehouse chain. Starbucks was founded in Seattle, Washington in 1971. As of early 2019, the company operates over 30,000 locations worldwide.
The overall score of SBUX is +37% .
In the last 6 months, SBUX has overperformed the S&P500 index by 11,8% and analysts believe the company is undervalued by 11,8% .
In the last quarter, the company reported revenues of 6823 million, up by 8,1% compared to the same quarter 12 months earlier. Revenue TTM (Trailing-12-Months) are equal to 26065,2 million, up by 36,0% in the last 3 years.
SBUX reported an operating income of 1723,1 million in the last quarter, an improvement of 65,6% compared to the same quarter 12 months earlier, also reporting an improvement of 53,1% in the operating margin. Considering the sum of the last four quarters (TTM), SBUX reports an operating income of 4576,8 Million , a growth of 16,4% compared to three years ago and a reduction of -14,4% in the operating margin.
SBUX reported a net income of 1372,8 million in the last quarter, an improvement of 63,1% compared to the same quarter 12 months earlier, also reporting an improvement of 50,9% in the net margin. The TTM net income is 3561,1 million , a growth of 29,1% compared to three years ago and has worsened by -5,1% .
In the next quarter, analysts expect growth in EPS (Earnings Per Share) of 12,9% and a growth in revenue of 5,9% . Furthermore, they expect an annual growth of SBUX EPS by 13,1% for the next 5 years.
In the last quarter, SBUX reported better EPS than analysts’ expectations and the stock price reacted by increasing by 8,9% .
Finally, in the last 3 months the Hedge Funds have decreased their positions by 1.5M shares. The Insiders have sold shares worth $8.45M .
Sources & additional info
*The comparison with the S&P 500 index is visible inside the graph.
*Data updated to the last quarterly report available
*Data in Millions of Dollars
*Data from zacks.com, tipranks.com, reuters.com, finance.yahoo.com
*Company information from wikipedia.com
This analysis gives you a general idea of whether a company is good or not, but you may also be interested in finding potential entry points, so I am waiting for you here to know about the best chart patterns of today.
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DISCLAIMER: The information in this blog post represents my own analysis/opinions and does not contain a recommendation for any particular security or investment.