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Is SBUX a good stock to buy? We came across a bullish thesis on Starbucks Corporation on Jordan’s Substack. In this article, we will summarize the bulls’ thesis on SBUX. Starbucks Corporation's share was trading at $97.80 as of April 21st. SBUX’s trailing and forward P/E were 82.46 and 43.67 respectively according to Yahoo Finance.
Starbucks Corporation, together with its subsidiaries, operates as a roaster, marketer, and retailer of coffee internationally. SBUX stands as one of the most recognizable consumer brands globally and continues to benefit from a deeply embedded customer habit loop that extends beyond coffee into a broader café experience. The brand’s strength lies in its ability to command premium pricing while maintaining emotional resonance with consumers, many of whom associate Starbucks with consistency, familiarity, and lifestyle appeal.
This type of brand equity is difficult to replicate and serves as a durable competitive advantage, supporting sustained demand even in more competitive or price-sensitive environments.From a historical perspective, Starbucks has nearly doubled its revenue over the past decade, reflecting both store expansion and steady underlying demand. While growth moderated in 2024, particularly due to competitive pressures in China, the company’s long-term trajectory remains intact.
Gross margins have faced some pressure from rising input costs such as coffee and dairy, but the broader business model continues to demonstrate resilience. Importantly, Starbucks has maintained an average operating margin of approximately 14% over the last five years, significantly above the broader restaurant industry average of around 5%. This gap highlights the company’s scale advantages, pricing power, and operational efficiency.
Operationally, the business is currently in a transition phase, with management focused on addressing execution challenges such as store throughput, menu complexity, and overall customer experience. The leadership under Brian Niccol is viewed as a constructive catalyst for this turnaround, bringing a strong track record of operational discipline and brand revitalization. While improvements are still in progress, early signs suggest a focus on restoring efficiency and enhancing the in-store experience.
Overall, Starbucks combines a powerful global brand with structurally superior margins and a large, loyal customer base. If the ongoing turnaround under new leadership proves successful, the company has the potential to reaccelerate growth and expand profitability, making it an increasingly attractive rerating opportunity over time.
Previously, we covered a bullish thesis on Starbucks Corporation (SBUX) by Business Model Mastery in May 2025, which highlighted the company’s behavioral flywheel driven by its Rewards ecosystem, app-based personalization, and capital-light profitability model. SBUX’s stock price has appreciated by approximately 19.76%. Jordan’s Substack shares a similar view but emphasizes the café experience and brand memory while focusing more on the ongoing operational turnaround under new leadership and near-term execution challenges.
Starbucks Corporation is not on our list of the 40 Most Popular Stocks Among Hedge Funds. As per our database, 59 hedge fund portfolios held SBUX at the end of the fourth quarter which was 64 in the previous quarter. While we acknowledge the risk and potential of SBUX as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than SBUX and that has 10,000% upside potential, check out our report about this cheapest AI stock.