The Fifteen Most Overvalued Stocks: Starbucks (SBUX)
Starbucks growth continues to defy the laws of gravity. Revenue in its last reported quarter grew 21% as its total number of stores rose to over 12,000. But, consumer spending and it huge footprint could be the company’s worst enemies.…
Starbucks growth continues to defy the laws of gravity. Revenue in its last reported quarter grew 21% as its total number of stores rose to over 12,000.
But, consumer spending and it huge footprint could be the company’s worst enemies. It has not gone through a recession with anywhere near the number of retail outlets it has now.
Other companies have also watched Starbucks and learned a lesson. McDonalds is now rolling out premium coffee. Success breds imitation.
According to Yahoo! Finance, Starbucks has a P/E of over 50. That does not leave much room if the company see slowing in same store sales, even for a month or two.
Investors have already show their concern about Starbucks last quarter by selling off the stock. It is a great company.
With no margin for error.
Douglas A. McIntyre can be reached at [email protected]. He does not own securities in companies that he writes about.
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Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.
McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.
His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.
A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.
TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.
McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.
