Starbucks Corporation (SBUX) Stock Valuation — PE Analysis
Restaurants · NASDAQ
Current Price
$103.04
PE Ratio (TTM)
78.5x
Intrinsic Value
$104.21
+1.1% margin of safety
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 PE valuation
A base case PE valuation for SBUX estimates a fair value of about $104.21 per share, against a current price of $103.04. The model assumes 18.7% annual earnings growth, a 50x target PE multiple, and a 10% discount rate.
Intrinsic Value
$104.21
Margin of safety
+1.1%
Expected annual return
+0.2%
Base case assumptions: 18.7% annual earnings growth, 50x target PE, 10% discount rate, 5 year projection. Data as of 2026-06-12.
This base case uses default assumptions and is not financial advice. The fair value changes significantly when the target PE or earnings growth rate changes. Open the calculator to set your own assumptions and see the full sensitivity range.
Customize the SBUX PE valuation
Adjust the target PE, earnings growth, and discount rate to see how the fair value and margin of safety for Starbucks Corporation respond.
Open PE 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 PE Stock Valuation Data
PE Ratio (TTM)
78.5x
PEG Ratio
n/m
Earnings Yield
1.27%
ROE (TTM)
-18.3%
Revenue/Share (TTM)
$33.76
Dividend Yield
2.40%
Debt/Equity
n/m
Frequently Asked Questions
What is the PE ratio of SBUX?
The trailing twelve-month PE ratio of SBUX reflects how much investors pay per dollar of Starbucks Corporation's earnings. This metric is most useful when compared to Restaurants peers and the company's own historical range.
Is SBUX overvalued based on PE ratio?
SBUX's PE of 78.5x combined with a PEG ratio of -1.50 provides a growth-adjusted perspective. SBUX has negative earnings, so its PE and PEG ratios are not meaningful here and cannot tell you whether the stock is over or undervalued. Keep in mind that PE-based valuation works best for profitable, mature companies — for high-growth or cyclical Restaurants, a DCF analysis may be more appropriate.
How do I value SBUX stock using PE ratio?
To value Starbucks Corporation using PE: (1) Compare the current PE (78.5x) against the Restaurants median to assess relative pricing, (2) check the PEG ratio (-1.50) to adjust for growth expectations, (3) review the 5-year PE range to identify where the stock sits historically, and (4) estimate fair value by multiplying a target PE by forward EPS estimates. This relative approach complements DCF's absolute valuation.
What is the PEG ratio of SBUX?
SBUX's PEG ratio is -1.50, calculated by dividing the PE ratio (78.5x) by the expected earnings growth rate. Because SBUX has negative earnings, its PEG ratio is not meaningful and should not be read as a sign of under or overvaluation. Note that PEG accuracy depends on the reliability of growth estimates.
Should I use PE ratio or DCF for SBUX stock valuation?
PE ratio gives a quick relative read — how SBUX is priced versus Restaurants peers. DCF provides an absolute value based on projected free cash flows. For the most reliable valuation, use PE as a quick comparability screen and DCF for a deeper fundamental analysis. Each method has blind spots: PE ignores capital structure and cash flow quality, while DCF is sensitive to growth and discount rate assumptions.
Learn More
- See SBUX DCF Valuation → — Intrinsic value via Discounted Cash Flow analysis
- PE Methodology — Step-by-step guide to PE ratio stock valuation
- DCF Methodology — Guide to discounted cash flow analysis
- PE Ratio — Understanding the price-to-earnings ratio
- Intrinsic Value — How to evaluate stock fair value
Related PE Valuations
All Consumer Cyclical valuationsP/E and DCF value SBUX with different methods and assumptions, so the two conclusions can differ. Compare the DCF intrinsic 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.