Perhaps the most well-known coffee company in the world is Starbucks (NASDAQ:SBUX). Since the spread of COVID-19, the business has been volatile. Many of its stores had to stop accepting customers in person. In 2020, sales went down by 11%.
However, it has been on the upswing since the economies began recovering in 2021. Another possible advantage is customers’ shifting shopping behaviors, such as more frequent use of online shopping carts. Let’s take a look at whether or not Starbucks stock is a good investment right now.
Digital ordering at Starbucks is popular among customers.
The revenue of Starbucks (NASDAQ:SBUX) has increased from $13.3 billion in 2012 to an expected $29 billion in 2021, a whopping 1,100% increase. Some locations are owned by the corporation, while others are licensed. It has over 34,000 sites worldwide, with the majority (15,650) concentrated in the United States and the remainder (5,761) in China. In liberalizing its business climate, China lags far behind other countries. Due to this, Starbucks’ most recent quarter, which concluded on July 3rd, saw a 44% drop in comparable store sales in China.
Even still, the $8.2 billion in net sales Starbucks (NASDAQ:SBUX) posted in the quarter that concluded in July represented a quarterly record. Several factors are contributing to Starbucks’ expansion as the world recovers from the devastating effects of COVID-19. The company has increased the number of active members in the United States to 27.4 million by making it simpler to collect rewards and save individualized orders through its app. In the third quarter, sales in the United States generated by the parent firm were 53% due to the efforts of these individuals. As a member, I appreciate how simple it is to keep track of my go-to coffee order and quickly reorder it anytime I need a pick-me-up. This is a valuable perk given the extensive options for personalizing your Starbucks beverage.
Seventy-two percent of third-quarter sales in the United States came from mobile orders, drive-thru, and delivery. At the start of the epidemic, digital orders became mandatory, and the administration quickly highlighted this function. There’s potential for this to have enduring effects. Except for the drive-thru, all Starbucks’ digital ordering and payment methods are entirely automated. Customers’ increased usage of these ordering methods may help Starbucks address the severe staffing shortages that have arisen in response to the spread of COVID-19.
It means that once Starbucks (NASDAQ:SBUX) has fully recovered from the coronavirus losses, the company has the potential to become even more profitable than it already is. Profits per share for Starbucks have increased from $0.90 in 2012 to an expected $3.54 in 2021.
Now is a great moment to invest in Starbucks stock.
The accompanying figure indicates that Starbuck’s (NASDAQ:SBUX) current price-to-sales ratio of 3.2 is toward the bottom of its historical range for this indicator over the previous decade. We can look at its price-to-sales ratio to see how much investors are ready to pay for each dollar of Starbucks’ revenue. According to this indicator, Starbucks is worth less because investors are worried about the company’s short-term prospects. While the epidemic was at its worst in 2020, Starbucks saw only an 11% drop in sales. Because of this and the other long-term benefits I’ve already outlined, Starbucks stock is a good investment right now.
Featured Image : Megapixl © Mehaniq
Author Shariq Khan 
