Starbucks’ Chinese rival, Luckin Coffee, is all set to take its rivalry with Starbucks to the next level as it filed for an IPO with the U.S. Securities and Exchange on Monday.
The company expects to raise $586.5 million in its initial public offering which implies an estimated offer of 34.5 million American depository shares (ADS) priced between $15 and $17 per ADS with each ADS representing eight Class A shares.
The coffee maker has been expanding rapidly with currently 2,370 stores in 28 Chinese cities and a plan to open another 2,500 stores by the end of this year in an ambition to replace Starbucks as the go-to coffee shop.
Coffee consumption in China has doubled to 8.7 billion cups last year from 4.4 billion in 2013 and is anticipated to rise to 15.5 billion cups by 2023. The Chinese coffee maker is rooting on this increase in consumption.
Further, Luckin’s app also has the option of ordering food and beverages outside coffee.
However, the company’s growth also has a flipside - it’s running into losses and may continue to do so in the near future. To date, it has recorded net losses of $475.4 million and total revenue of $125.27 million. For the first three months of 2019, it posted a net loss of $85.3 million.
Yet, the coffee maker has some high-profile investors like U.S. money manager BlackRock (BLK) and Chinese investment firms Centurium Capital and Joy Capital.
It is expected that a price bounce should occur soon.
The Stochastic Oscillator is in the oversold zone. Keep an eye out for a move up in the foreseeable future.
Following a 3-day Advance, the price is estimated to grow further. Considering data from situations where SBUX advanced for three days, in of 309 cases, the price rose further within the following month. The odds of a continued upward trend are .
SBUX may jump back above the lower band and head toward the middle band. Traders may consider buying the stock or exploring call options.
The Momentum Indicator moved below the 0 level on May 01, 2024. You may want to consider selling the stock, shorting the stock, or exploring put options on SBUX as a result. In of 95 cases where the Momentum Indicator fell below 0, the stock fell further within the subsequent month. The odds of a continued downward trend are .
The Moving Average Convergence Divergence Histogram (MACD) for SBUX turned negative on May 01, 2024. This could be a sign that the stock is set to turn lower in the coming weeks. Traders may want to sell the stock or buy put options. Tickeron's A.I.dvisor looked at 54 similar instances when the indicator turned negative. In of the 54 cases the stock turned lower in the days that followed. This puts the odds of success at .
Following a 3-day decline, the stock is projected to fall further. Considering past instances where SBUX declined for three days, the price rose further in of 62 cases within the following month. The odds of a continued downward trend are .
The Aroon Indicator for SBUX entered a downward trend on May 03, 2024. This could indicate a strong downward move is ahead for the stock. Traders may want to consider selling the stock or buying put options.
The Tickeron Valuation Rating of (best 1 - 100 worst) indicates that the company is seriously undervalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (0.000) is normal, around the industry mean (4.159). P/E Ratio (20.140) is within average values for comparable stocks, (53.557). Projected Growth (PEG Ratio) (1.274) is also within normal values, averaging (1.989). Dividend Yield (0.030) settles around the average of (0.035) among similar stocks. P/S Ratio (2.289) is also within normal values, averaging (3.275).
The Tickeron SMR rating for this company is (best 1 - 100 worst), indicating very strong sales and a profitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron Price Growth Rating for this company is (best 1 - 100 worst), indicating fairly steady price growth. SBUX’s price grows at a lower rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron Profit vs. Risk Rating rating for this company is (best 1 - 100 worst), indicating that the returns do not compensate for the risks. SBUX’s unstable profits reported over time resulted in significant Drawdowns within these last five years. A stable profit reduces stock drawdown and volatility. The average Profit vs. Risk Rating rating for the industry is 83, placing this stock worse than average.
The Tickeron PE Growth Rating for this company is (best 1 - 100 worst), pointing to worse than average earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The average fundamental analysis ratings, where 1 is best and 100 is worst, are as follows
a producer of coffee and tea
Industry Restaurants