Starbucks Corporation (SBUX) Intrinsic Value & DCF Valuation
Restaurants · NASDAQ
Current Price
$103.04
Intrinsic Value
$119.07
+13.5% margin of safety
What Is Starbucks Corporation's Intrinsic Value?
As of 2026-06-12, our base-case DCF model estimates the intrinsic value of Starbucks Corporation (SBUX) at $119.07 per share, compared with a market price of $103.04, a margin of safety of +13.5%. The base case assumes 18.5% annual free cash flow growth and a 10.0% discount rate.
Across the sensitivity grid the estimate spans $100.24 to $140.28. 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 our DCF works · Recalculate with your own assumptions · What is intrinsic value?
Is Starbucks Corporation (SBUX) Undervalued?
At $103.04, SBUX trades about 13.5% below our base-case intrinsic value estimate. That is a real discount, but it stays short of the 30% margin of safety we require before calling a stock undervalued.
COMPETITIVE MOAT
↑Brand Loyalty and Rewards Program
Starbucks cultivates strong customer loyalty through its globally recognized brand and highly effective Starbucks Rewards program, driving repeat business and customer stickiness.
↑Global Scale and Supply Chain
Its vast global footprint and sophisticated supply chain provide significant operational efficiencies and a competitive advantage in sourcing and distribution.
↑Prime Real Estate Locations
Strategic placement of stores in high-traffic, desirable locations creates a barrier to entry for competitors and ensures consistent customer access.
INVESTMENT RISKS
↓Intensifying Competition
The restaurant industry is highly competitive, with numerous players vying for market share, potentially pressuring Starbucks' pricing and growth.
↓Consumer Sentiment and Economic Sensitivity
Discretionary spending on premium coffee is susceptible to economic downturns and shifts in consumer preferences, impacting sales volume.
↓Labor and Operational Challenges
Managing a large global workforce and ensuring consistent operational quality across all locations presents ongoing challenges, as suggested by recent discussions.
Base case
SBUX base case valuation
Intrinsic Value
$119.07
Margin of safety
+13.5%
Expected annual return
+2.9%
Base case assumptions: 18.5% annual growth, 10.0% discount rate, 30x exit multiple, 5 year projection. Data as of 2026-06-12.
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)
$33.76
FCF/Share (TTM)
$2.39
ROIC (TTM)
7.6%
ROE (TTM)
-18.3%
P/FCF
43.1x
EV/EBITDA
26.1x
FCF Yield
2.32%
Debt/Equity
n/m
Based on trailing twelve-month data, SBUX shows a free cash flow per share of $2.39 and a ROIC of 7.6%, key inputs for stock valuation using the DCF method. The P/FCF ratio of 43.1x and FCF yield of 2.32% 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 $2.39 in free cash flow per share. At the current price of $103.04, 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 43.1x with a free cash flow yield of 2.32%. This elevated P/FCF suggests the market is pricing in significant 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 ($2.39) 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 -2.88x, 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 7.6% suggests the company may face challenges generating returns above its cost of capital.
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 -2.88x, the capital structure directly influences WACC. A 1% increase in WACC typically reduces the intrinsic value by 10-15%. At an EV/EBITDA of 26.1x, 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 2026-06-12. Financial data from Financial Modeling Prep (trailing twelve months) · Valuation methodology by Charlie Wang.
This is an estimate, not investment advice.