Is it time to sell Starbucks shares as comparable sales fall short of estimates?

On Friday, Starbucks Corp (NASDAQ:SBUX) shares plunged more than 7% after comparable sales missed the consensus for analyst expectations. The company announced its most recent quarterly results Thursday after markets closed, beating FQ4 earnings estimates.

The company posted FQ4 non-GAAP earnings per share of $1.00, in line with expectations, while its GAAP EPS of $1.49 was $0.51 ahead of estimates. On the other hand, revenue for the quarter increased by 31.5% from the same quarter last year to $8.15 billion, missing the Street forecast by $70 million.

Starbucks’ long-term growth

Are you looking for fast-news, hot-tips and market analysis?

Sign-up for the Invezz newsletter, today.

From an investment perspective, Starbucks shares trade at trailing 12-month and forward P/E ratios of 43.98 and 26.43, respectively. Therefore, value investors could opt for alternatives in the market.

However, the company offers exciting long-term growth prospects, making it an interesting option for growth investors. 

Although analysts predict earnings will fall by more than 73% this year, they also expect the company’s bottom line to grow at an average annual rate of 54.62% over the next five years.

Technically, Starbucks shares seem to be trading within a descending channel formation in the intraday chart. As a result, the stock has plummeted closer to the oversold conditions of the 14-day RSI.

Therefore, investors could target potential rebounds at about $109.59, or higher at $114.59. On the other hand, if the stock continues to fall, it could find support at $99.98, or lower at $95.14.

It could be time to buy SBUX shares

In summary, Starbucks shares have swung to a net gain of just 1.86% this year, thus substantially underperforming the S&P 500 Index, which is up more than 23%. 

In addition, the stock seems to have pulled back closer to oversold conditions, creating a perfect opportunity for a rebound. 

Therefore, given the company’s exciting long-term growth prospects, it could be time to buy before the stock advances further.

Where to buy right now

To invest simply and easily, users need a low-fee broker with a track record of reliability. The following brokers are highly rated, recognised worldwide, and safe to use:

1. Etoro, trusted by over 13m users worldwide. Register here >
2. Capital.com, simple, easy to use and regulated. Register here >