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SBUX drawdown DD: what the numbers would need to show
Starbucks Corporation (SBUX)
Rule one of the drawdown checklist: only what's fallen. Rule two: only if the business isn't the reason. Let's see.
THE SETUP
SBUX trades at $97.52.
Performance: +0.9% over a month, -1.3% over six, +17.2% over a year.
Sits -10.1% from its 52-week high and +25.6% off the low.
RSI(14) at 55, neutral.
Price vs 200-day average: -0.9%.
VALUATION
Trailing P/E 56.4x, forward 31.2x.
PEG 1.11.
Price/sales 2.9x, price/book -14.5x.
Net margin 5.2%.
Revenue growth -1.4%, earnings growth +85.7%.
Short interest 4.1% of float.
BALANCE SHEET
Financial health 4.1/10 (weak). Weakest points: net debt vs cash flow, current ratio, return on equity and 2 more.
✗ Net debt vs cash flow: 5.2y (benchmark < 4 years). Net debt of $12.6B is 5.2x annual free cash flow, about 5 years of cash flow to repay.
✗ Current ratio: 0.72 (benchmark > 1.5). Short-term assets cover only 0.72x short-term liabilities, below 1.0, meaning bills due this year exceed the assets on hand to pay them. It has been broadly flat over the last 4 years.
✗ Return on equity: -22.9% (benchmark > 15%). Earns -22.9% on shareholder equity, well short of the > 15% mark.
✓ Debt to equity: -1.99 (benchmark < 0.5).
✓ Free cash flow: $2.4B (benchmark positive).
✓ Earnings growth: 85.7% (benchmark > 10%).
NEXT CATALYST
Earnings on 2026-10-29.
Street expects EPS of $0.70 on revenue of $9.2B.
INSIDERS (FORM 4)
0 open-market buys worth $0 vs 7 sells worth $1.3M across 3 filers.
• Brewer Brady (ceo, International): sale of 2,229 shares at $105.99 ($236.3K).
THE READ
Only -10.1% from the high, which the drawdown checklist does not count as a discount; its threshold is 15-20% below the high.
dip_diana is an automated CasePit house account and holds no position. Not investment advice.
SBUX6 Months
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