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DailyBubble News

This Magnificent Nasdaq Growth Stock Is Down More Than 40% and Trading at a Once-in-a-Decade Valuation. If It Gets This 1 Thing Right, the Stock Could Soar.

Investing $10,000 in Starbucks’ IPO over 30 years ago would have made you a millionaire today. However, the stock has recently experienced a significant drop of more than 40% from its all-time high in 2021, marking one of its worst pullbacks in history.

In 2021, Starbucks reached an all-time high while trading at a decade-high price-to-sales (P/S) valuation of 6, indicating that the stock was likely overvalued at the time. Despite this, the current valuation of Starbucks stock presents a more attractive investment opportunity compared to previous years.

The new CEO, Laxman Narasimhan, has a different perspective on the company’s issues compared to the former CEO, Howard Schultz. Narasimhan believes Starbucks should focus on attracting nonloyal customers with bargains rather than solely catering to loyal customers. This approach may lead to progress or hinder the company’s growth, but Starbucks has a strong brand and a history of overcoming challenges.

Investors who buy Starbucks stock now can benefit from a dividend while waiting for results. The potential for growth and the company’s track record of recovery provide reasons for optimism.

The Motley Fool Stock Advisor team has identified 10 stocks with strong potential for future returns, with Starbucks not included in the list. The service offers investors guidance on building a successful portfolio and has significantly outperformed the S&P 500 since 2002.

Overall, while Starbucks’ stock has experienced a significant drop, its current valuation and potential for growth make it a compelling investment option for those willing to wait for results. Remember, investing always comes with risks, so it’s essential to do thorough research before making any decisions.

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