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Starbucks - AI Stock Analysis

Analysis generated September 2, 2024

Starbucks Corporation, founded in 1971 and headquartered in Seattle, Washington, is a premier roaster, marketer, and retailer of specialty coffee globally. The company operates through company-operated stores, licensed stores, and other segments including consumer packaged goods. Beyond its signature Starbucks brand, the company also includes Teavana, Tazo, Seattle's Best Coffee, Evolution Fresh, and more. Starbucks has established itself as the leading coffeehouse brand by setting industry standards for product quality and customer experience.

Fundamental Analysis

The latest revenue for Starbucks in the last quarter stood at $8.56 billion, which represents a decrease of 9.15% compared to the previous quarter and a decrease of 1.80% compared to the same quarter last year. This downward trend in revenue suggests potential issues in maintaining sales momentum, which could be a concern for investors.

Net income for the last quarter was $772 million, reflecting a significant decrease of 24.60% compared to the previous quarter and a decrease of 14.96% compared to the same quarter last year. Such drops indicate challenges in profitability, possibly due to increased operating costs or lower sales.

The EBITDA for the last quarter came in at $1.5 billion, showing a reduction of 20.15% compared to the previous quarter and 10.84% compared to the same quarter last year. This decrease in EBITDA highlights ongoing concerns regarding the company's operational efficiency and profitability.

Starbucks' current P/E ratio is 26.49, which may be considered high. A high P/E ratio may imply that the stock is overvalued, potentially deterring value-focused investors.

It’s also noteworthy that there have been several insider sales in the last few months. Insider selling generally signals a bearish outlook, as company executives may anticipate a decline in stock value.

Technical Analysis

Today’s stock price for Starbucks is $94.57, which marks an increase of 25.37% compared to a month ago. This upward movement indicates a positive short-term trend. However, compared to a year ago, there has been a slight decrease of 1.06%, hinting at possible long-term concerns.

The current trend appears bullish, supported by an SMA10 of 95.07, which is higher than the previous SMA10 of 95.02. This suggests a potential upward trend in price movement. The RSI (Relative Strength Index) is at 35, indicating a neutral condition. While the recent short-term indicators are positive, long-term concerns persist.

Alternative Data Analysis

Evaluating alternative data provides additional insights. Starbucks has around 1,000 open positions, a significant 92% reduction in job postings over recent months. This decline suggests cost-cutting measures or a focus on improving margins, which may indicate underlying growth challenges.

From a customer acquisition standpoint, Starbucks’ webpage has seen an estimated 20 million visitors, but this number has dropped by 21% recently. Similarly, mobile app downloads have decreased by 29% to 13,000 daily, pointing to potential loss in customer engagement.

In terms of customer engagement on social media, Starbucks retains 18 million followers on Instagram and 11 million followers on Twitter. However, the follower count on both platforms has not increased over the past few months, indicating stagnant or declining customer interest.

Additionally, Starbucks has an AI score of 27 from AltIndex, a strong sell signal based on a comprehensive analysis of fundamental, technical, and alternative data metrics.

Conclusion

Based on the combined fundamental, technical, and alternative data analysis, Starbucks presents a mixed but largely concerning outlook. The consistent decrease in revenue, net income, and EBITDA, coupled with high insider selling and a high P/E ratio, point toward potential financial challenges. The short-term technical indicators reveal a bullish trend, but long-term concerns remain.

The decline in job postings and customer acquisition metrics further compounds the bearish sentiment, suggesting possible internal and external pressures on the company’s growth.

Considering all factors, the recommendation would be to approach Starbucks stock with caution. The AI score from AltIndex supports a strong sell signal, which aligns with the detailed analysis conducted here.

Disclaimer: This AI stock analysis, generated by an experimental AI tool, is for informational purposes only and not financial advice. Information is based on publicly available data and may not always be accurate or current.