Starbucks Corporation (SBUX) — Fundamental Analysis & Key Financial Ratios

Kaplio's reading: Starbucks Corporation

Updated on October 30, 2026 · accounts published on October 29, 2026

Reading of October 29, 2026: A business with solid returns on capital, thinner margins and a stretched balance sheet

Starbucks trades at a P/E of 60.6 over the last 12 months, 115 % above its ten-year median of 28.3 and higher than 98 % of the past decade.

• Is Starbucks expensive or cheap? Its P/E of 60.6 is higher than in 98 % of the last decade and 240 % above the sector median of 17.9.
• How is the business doing? Operating margin is 9.7 % over the last 12 months, well below its 15.4 % average for fiscal 2014-2025.
• How strong is the balance sheet? Net debt is 4.3× EBITDA in fiscal 2025, above the healthy 3.0× line, and the payout reached 149 % of earnings.
• What to expect from the next earnings? Analysts expect EPS of $0.76 on February 2, 2027, after Starbucks beat estimates by 11 % on October 29, 2026.
• Can the balance sheet withstand a recession? Five-year ROIC averages 15.1 %, above the 12 % bar, but net debt at 4.3× EBITDA fails the sector's 3× limit.

Is Starbucks expensive or cheap?

Over the last 12 months Starbucks trades at a P/E of 60.6, 115 % above its ten-year median of 28.3 and close to the decade high of 62.0. Against 209 consumer cyclical peers, whose median P/E is 17.9, the premium is 240 %. The earnings yield is only 1.5 % and the free cash flow yield 2.5 %. Sales tell a milder story: EV/sales of 3.3× in fiscal 2025 sits below its ten-year average of 3.9×, which suggests the high P/E reflects depressed earnings more than an inflated price. The stock is up 28 % over 12 months, 3 % below its 52-week high of $108.55.

How is the business doing?

Revenue grew 2 % over the last 12 months while EPS rose 36 %, so the gain came from earnings recovering on a nearly flat top line. Profitability is the weak spot: the operating margin of 9.7 % is about six points below the 15.4 % average of fiscal 2014-2025, and fiscal 2025 closed at 9.6 %. Returns on capital hold up better. ROIC of 11.5 % beats the sector median of 9.4 % by 2.1 points, and stayed above 10 % in 8 of the last 10 fiscal years, with 2020 the low at 5.0 %. A ROE of −31.4 % alongside a positive 6.7 % net margin makes ROIC the more useful gauge here.

How strong is the balance sheet?

In fiscal 2025 Starbucks carried net debt of $20.78 per share ($23.82 of debt less $3.04 of cash), equal to 20 % of the current share price. Leverage of 4.3× net debt to EBITDA is above the 3× considered healthy for consumer cyclicals. A current ratio of 0.76 over the last 12 months means short-term liabilities exceed short-term assets. The Altman Z of 2.5 sits in the grey zone and the Piotroski score is 5 of 9. The dividend yields 2.4 % and has risen for 11 straight fiscal years, but a fiscal 2025 payout of 149 % of earnings means profits did not cover it.

What to expect from the next earnings?

On October 29, 2026 Starbucks reported EPS of $0.80 against $0.72 expected, a beat of 11 %. The longer record is mixed: it has beaten EPS estimates in 4 of the last 8 quarters. The next report is due February 2, 2027, with consensus at $0.76 per share. Expectations are steady, as the 2027 EPS consensus barely moved in 30 days, from $3.15 to $3.16 among 20 analysts, and the revenue consensus is also flat. Of 59 analysts, 28 recommend buying, 28 holding and 3 selling, a split that shows little conviction either way.

Can the balance sheet withstand a recession?

In consumer cyclicals, earnings swing with the economy, and Peter Lynch warned that these stocks look cheap when they are expensive and expensive when they are cheap. That is why the sector is judged on averages across the cycle and on the cushion to absorb a downturn. Starbucks passes on operations: a 14.4 % operating margin averaged over fiscal 2021-2025 against an 8 % threshold, inventory turnover of 12.9× in fiscal 2025 against a 4× minimum, and five-year ROIC of 15.1 %. It fails on cushion, with net debt at 4.3× EBITDA and a current ratio of 0.76 against the 1.5 required.

How this was prepared: the data comes from companies' official filings, collected by a professional provider, and from Kaplio's analysis engine (trailing-12-month ratios, 10 years of history and sector medians computed across US-listed companies). The text is written from that data alone, every figure is checked against it before publication, and it is reviewed when the company reports results. This is not investment advice.