Starbucks Corporation (SBUX) Intrinsic Value & DCF Valuation
Restaurants · NASDAQ
Current Price
$104.14
Intrinsic Value
$70.01
-48.8% margin of safety
What Is Starbucks Corporation's Intrinsic Value?
As of 2026-07-29, the base-case DCF model estimates the intrinsic value of Starbucks Corporation (SBUX) at $70.01 per share, compared with a market price of $104.14, a margin of safety of -48.8%. The base case assumes 5.9% annual free cash flow growth and a 10.0% discount rate.
Across the sensitivity grid the estimate spans $58.64 to $82.94. Intrinsic value is an estimate built on assumptions, not a fact. A higher discount rate or slower growth pushes the estimate down, while stronger cash flow growth lifts it.
How the DCF works · Recalculate with your own assumptions · What is intrinsic value?
Is Starbucks Corporation (SBUX) Undervalued?
At the current price of $104.14, SBUX trades above the base-case intrinsic value estimate by a meaningful margin. By this model the stock looks expensive, though faster growth than assumed would change the picture.
COMPETITIVE MOAT
↑Powerful Brand Recognition
Starbucks' globally recognized brand fosters strong customer loyalty. This allows for premium pricing and consistent demand for its products.
↑Extensive Store Network
A vast and strategically located store footprint creates significant convenience for customers. This density makes it difficult for competitors to replicate.
↑Loyalty Program Ecosystem
The Starbucks Rewards program drives repeat business and collects valuable customer data. This creates switching costs and informs personalized offers.
INVESTMENT RISKS
↓Intensifying Competition
The coffee market is highly competitive, with numerous local and global players vying for market share. New entrants and established rivals can challenge Starbucks' dominance.
↓Labor and Supply Chain Volatility
Rising labor costs and potential supply chain disruptions can impact profitability and product availability. These factors can affect operational efficiency and customer experience.
↓Shifting Consumer Preferences
Evolving tastes and preferences for healthier or more specialized beverages could impact demand for Starbucks' core offerings. Failure to adapt could lead to market share erosion.
Base case
SBUX base case valuation
Intrinsic Value
$70.01
Margin of safety
-48.8%
Expected annual return
-7.6%
Base case assumptions: 5.9% annual growth, 10.0% discount rate, 30x exit multiple, 5 year projection. Data as of 2026-07-29.
This base case uses default assumptions and is not financial advice. The intrinsic value changes significantly when the growth rate or discount rate changes. Open the calculator to set your own assumptions and see the full sensitivity range.
Customize the SBUX valuation
Adjust the growth rate, discount rate, and exit multiple to see how the intrinsic value and margin of safety for Starbucks Corporation respond.
Open DCF Calculator for SBUXCompany Overview
Starbucks Corporation, along with its various subsidiaries, operates worldwide as a key player in roasting, marketing, and selling specialty coffee. Its business is structured into three main operating divisions: North America, International markets, and Channel Development. The company's retail outlets offer a broad assortment of coffee and tea beverages, roasted whole bean and ground coffees, single-serve options, and ready-to-drink products. Customers can also find a variety of food items, including pastries, breakfast sandwiches, and lunch selections. Furthermore, Starbucks extends its brand reach by licensing its trademarks to independently operated stores, grocery retailers, and foodservice accounts. Products are sold under well-known labels such as Starbucks, Teavana, Seattle's Best Coffee, Evolution Fresh, Ethos, Starbucks Reserve, and Princi. As of October 3, 2021, Starbucks had a significant global presence, operating 16,826 company-owned and licensed stores across North America, in addition to 17,007 similar locations internationally. The company, established in 1971, is headquartered in Seattle, Washington.
Financial Metrics — SBUX Stock Valuation Data
Revenue/Share (TTM)
$33.51
FCF/Share (TTM)
$2.38
ROIC (TTM)
9.0%
ROE (TTM)
-24.3%
P/FCF
43.5x
EV/EBITDA
24.6x
FCF Yield
2.30%
Debt/Equity
n/m
Based on trailing twelve-month data, SBUX shows a free cash flow per share of $2.38 and a ROIC of 9.0%, key inputs for stock valuation using the DCF method. The P/FCF ratio of 43.5x and FCF yield of 2.30% are important context metrics when evaluating SBUX's stock valuation relative to peers.
Frequently Asked Questions
What is the intrinsic value of SBUX?
Starbucks Corporation currently generates $2.38 in free cash flow per share. At the current price of $104.14, a DCF model would discount these cash flows at an appropriate WACC and apply a terminal growth rate to arrive at an intrinsic value. The result depends heavily on your growth and discount rate assumptions — a 1% change in WACC typically shifts the fair value estimate by 10-15%. In MiniValuator the model uses a single discount rate that you can edit directly, 10% by default, rather than a computed WACC.
Is SBUX undervalued?
SBUX trades at a P/FCF ratio of 43.5x with a free cash flow yield of 2.30%. A high P/FCF means investors are paying more per dollar of free cash flow, which usually reflects expectations of future growth. However, whether SBUX is truly undervalued requires comparing the DCF intrinsic value to the current market price and evaluating whether the margin of safety is sufficient for your risk tolerance.
How do I value SBUX stock using DCF?
To perform a DCF valuation on Starbucks Corporation: (1) Start with the trailing free cash flow per share ($2.38) as the base, (2) project future FCF growth over 5-10 years based on Restaurants industry trends and company fundamentals, (3) apply a discount rate (WACC) reflecting SBUX's risk profile — with a debt-to-equity of -2.92x, capital structure is an important factor, and (4) add a terminal value for cash flows beyond the projection period.
What is DCF valuation and how does it apply to SBUX?
DCF (Discounted Cash Flow) estimates what a company is worth today based on its future cash generation. For Starbucks Corporation, this means projecting how much free cash flow the company will produce over the next 5-10 years, shaped by Restaurants trends, then discounting those amounts to today's dollars. SBUX's ROIC of 9.0% shows moderate capital returns.
How does WACC affect SBUX stock valuation?
WACC (Weighted Average Cost of Capital) is the discount rate in a DCF model — it reflects the minimum return investors require. For SBUX, with a debt-to-equity ratio of -2.92x, the capital structure directly influences WACC. A 1% increase in WACC typically reduces the intrinsic value by 10-15%. At an EV/EBITDA of 24.6x, the market's implied discount rate can be reverse-engineered for comparison. In MiniValuator you set this discount rate yourself as a single editable number, 10% by default, instead of computing a formal WACC.
Learn More
- See SBUX PE Valuation → — Earnings-based stock valuation using PE ratio analysis
- DCF Methodology — Step-by-step guide to discounted cash flow analysis
- PE Methodology — Guide to PE ratio stock valuation
- WACC — Understanding the discount rate used in DCF
- Margin of Safety — How to evaluate downside protection
- Intrinsic Value — How to evaluate stock fair value
- How to Calculate Intrinsic Value — Complete guide for investors
Related Valuations
All Consumer Cyclical valuationsDCF and P/E value SBUX with different methods and assumptions, so the two conclusions can differ. Compare the P/E fair value.
Price as of 2026-07-29. Financial data from Financial Modeling Prep (trailing twelve months) · Valuation methodology by Charlie Wang.
This is an estimate, not investment advice.