Starbucks Corporation (NASDAQ:SBUX) shareholders have been facing a tough time in recent years, with the share price dropping significantly. Over the last three years, the stock has seen a 32% decline, falling well short of the market return of around 20%. In the last year alone, the share price has dropped by 28%, and in the last quarter, it’s down by 22%.
Despite the negative performance of the stock, there have been signs of promise in the past week. However, the longer-term fundamentals of Starbucks need to be examined to understand the reasons behind the negative returns.
One interesting aspect is the disconnect between the earnings per share (EPS) and the share price movement. While the EPS has improved by 63% per year over the last three years, the share price has continued to decline. This suggests that there may be other factors at play influencing the stock price.
Additionally, the revenue of Starbucks has actually increased by 12% over the same period, further adding to the puzzle of the declining share price.
Analysts suggest that the recent sell-off could present an opportunity for investors, especially considering the long-term sustainable growth potential of Starbucks. It’s important to consider all factors before making any investment decisions, including potential risks associated with the stock.
Overall, while Starbucks may not be the best stock to buy at the moment, further research and analysis could uncover potential opportunities for investors looking to capitalize on the company’s future growth prospects.