Starbucks stock has lost 23% this year
Starbucks Corporation (NASDAQ:SBUX) has dropped approximately 23% this year, hitting an annual low of $87.25 last week. While the security tried to distance itself from this bottom, the 20-day moving average kept a tight lid on gains, rejecting this rally and knocking the stock down 2.4% to trade at $89.50 today.
Analyst sentiment is split, with several brokerages turning bearish following Starbucks' last earnings report. Of the 27 in coverage, 14 say "strong buy," and 13 say "hold."
Still, Starbucks stock's valuation continues to be on the higher end due to its forward price-earnings ratio of 27.62 and price-sales ratio of 3.61. Nonetheless, the coffeehouse brand provides a viable option for long-term investors searching for a company with an established business model and a relatively high growth rate.
Although Starbucks' bottom-line figures have been inconsistent in recent years, most notably experiencing an 80% decline in net income between fiscal 2018 and fiscal 2020, its top-line growth has fared well. Since fiscal 2018, SBUX's trailing 12-month revenues have increased 23%, even with a 13% revenue decrease in fiscal 2020. In addition, SBUX is estimated to see 9% revenue growth and 17.1% earnings growth this year.
The coffee company offers a dividend yield of 2.11% with its forward dividend of $1.96, making Starbucks stock worth watching in case a more attractive valuation presents itself.