Starbucks (SBUX) is definitely a stock worth looking at despite the fantastic rally over the past five years. It’s a good growth story to bet on for the long term; however I don’t like their net profit margins that stand around 10% at present. Even their dividend yield of around 1.20% isn't really attractive. The most promising part of their business is that they are still expected to grow above 20% annually for next five years. Even its annual sales are expected to rise to $17 billion by 2015.
But, despite such a rosy outlook, the current valuations look a bit stretched. Its currently trading around 33 times price to earnings, has a price to sales ratio of around 2.90 and it price to book ratio nearing 10 times is simply beyond investors comfort level. So, purely on fundamental basis it’s looking expensive around current price levels. Now, let’s see where it stands technically.