Stock Analysis on Net

Starbucks Corp. (NASDAQ:SBUX)

$24.99

Market Value Added (MVA)

Microsoft Excel

Market value added (MVA) is the difference between a firm fair value and its invested capital. MVA is a measure of the value a company has created in excess of the resources already committed to the enterprise.


MVA

Starbucks Corp., MVA calculation

US$ in thousands

Microsoft Excel
Sep 29, 2024 Oct 1, 2023 Oct 2, 2022 Oct 3, 2021 Sep 27, 2020 Sep 29, 2019
Fair value of debt1
Operating lease liability
Market value of common equity
Noncontrolling interests
Less: Marketable securities
Market (fair) value of Starbucks
Less: Invested capital2
MVA

Based on: 10-K (reporting date: 2024-09-29), 10-K (reporting date: 2023-10-01), 10-K (reporting date: 2022-10-02), 10-K (reporting date: 2021-10-03), 10-K (reporting date: 2020-09-27), 10-K (reporting date: 2019-09-29).

1 Fair value of debt. See details »

2 Invested capital. See details »


The financial data over the six-year period reveals several notable trends related to market value, invested capital, and market value added (MVA).

Market (fair) value
The market value demonstrated an overall increasing trend from 2019 to 2021, rising from approximately 119.99 billion to 154.53 billion US dollars. However, a decline occurred in 2022 to around 133.78 billion, followed by a slight recovery in 2023 reaching approximately 142.02 billion. The value decreased again in 2024 to about 135.76 billion. This pattern suggests a peak in 2021, followed by fluctuations with moderate declines in the last two years reported.
Invested capital
Invested capital increased steadily from 20.03 billion US dollars in 2019 to 23.67 billion in 2021, indicating ongoing investments or capital formation. A drop occurred in 2022, bringing the invested capital down to approximately 20.46 billion. It then increased again through 2023 and 2024, reaching 23.53 billion. This indicates some variability but generally a recovering upward trend after the 2022 dip.
Market value added (MVA)
MVA, which represents the difference between market value and invested capital, exhibited a rising trend from about 99.96 billion in 2019 to a high of 130.85 billion in 2021. Similar to market value, MVA decreased substantially in 2022 to 113.32 billion but then rose slightly in 2023 to roughly 119.85 billion before declining again to 112.24 billion in 2024. This pattern mirrors the fluctuations seen in the market value, reflecting changing perceptions of the company's economic value relative to its invested capital.

Overall, the data suggests that the company experienced growth in market value, invested capital, and MVA up to 2021, with notable volatility and some declines thereafter. The dips observed in 2022 and subsequent years may indicate external challenges or shifts in market conditions affecting the company’s valuation and capital deployment. The invested capital's recovery after 2022 may reflect strategic adjustments, though the market's valuation of the company remains somewhat subdued relative to its peak in 2021.


MVA Spread Ratio

Starbucks Corp., MVA spread ratio calculation, comparison to benchmarks

Microsoft Excel
Sep 29, 2024 Oct 1, 2023 Oct 2, 2022 Oct 3, 2021 Sep 27, 2020 Sep 29, 2019
Selected Financial Data (US$ in thousands)
Market value added (MVA)1
Invested capital2
Performance Ratio
MVA spread ratio3
Benchmarks
MVA Spread Ratio, Competitors4
Airbnb Inc.
Booking Holdings Inc.
Chipotle Mexican Grill Inc.
McDonald’s Corp.

Based on: 10-K (reporting date: 2024-09-29), 10-K (reporting date: 2023-10-01), 10-K (reporting date: 2022-10-02), 10-K (reporting date: 2021-10-03), 10-K (reporting date: 2020-09-27), 10-K (reporting date: 2019-09-29).

1 MVA. See details »

2 Invested capital. See details »

3 2024 Calculation
MVA spread ratio = 100 × MVA ÷ Invested capital
= 100 × ÷ =

4 Click competitor name to see calculations.


Market Value Added (MVA)
The MVA demonstrates a general upward trend from 2019 through 2021, increasing from approximately 99.96 billion to 130.85 billion US dollars. However, after peaking in 2021, MVA declined to about 113.32 billion in 2022, followed by a partial recovery to 119.85 billion in 2023. The latest figure in 2024 shows a further decline to 112.24 billion, indicating volatility and a downward trend in recent years despite higher levels compared to 2019.
Invested Capital
Invested capital grew steadily from 20.03 billion US dollars in 2019 to a high of approximately 23.68 billion by 2021. This was followed by a decrease to 20.46 billion in 2022. Subsequently, invested capital increased again, reaching 23.53 billion by 2024, showing a pattern of fluctuations but generally trending upwards over the six-year period.
MVA Spread Ratio
The MVA spread ratio remained relatively stable between 2019 and 2020, around 499% and 493% respectively. It then peaked in 2021 and 2022 at approximately 552% and 554%, before declining to 541% in 2023 and further to 477% in 2024. This downward trend in the ratio over the last two years suggests a reduction in value creation efficiency relative to invested capital.
Summary of Trends
Overall, the data reveals an initial period of growth in market value added and invested capital up to 2021, followed by a period of decline and volatility from 2022 onwards. Despite recovered capital investments, the decline in MVA and the MVA spread ratio in the last two years points to potential challenges in maintaining value generation performance. The pattern indicates caution in future valuation prospects if the recent downward trends continue.

MVA Margin

Starbucks Corp., MVA margin calculation, comparison to benchmarks

Microsoft Excel
Sep 29, 2024 Oct 1, 2023 Oct 2, 2022 Oct 3, 2021 Sep 27, 2020 Sep 29, 2019
Selected Financial Data (US$ in thousands)
Market value added (MVA)1
 
Net revenues
Add: Increase (decrease) in stored value card liability and deferred revenue
Adjusted net revenues
Performance Ratio
MVA margin2
Benchmarks
MVA Margin, Competitors3
Airbnb Inc.
Booking Holdings Inc.
Chipotle Mexican Grill Inc.
McDonald’s Corp.

Based on: 10-K (reporting date: 2024-09-29), 10-K (reporting date: 2023-10-01), 10-K (reporting date: 2022-10-02), 10-K (reporting date: 2021-10-03), 10-K (reporting date: 2020-09-27), 10-K (reporting date: 2019-09-29).

1 MVA. See details »

2 2024 Calculation
MVA margin = 100 × MVA ÷ Adjusted net revenues
= 100 × ÷ =

3 Click competitor name to see calculations.


Over the analyzed periods, several key financial metrics demonstrate distinct trends reflecting the company's performance and market valuation fluctuations.

Market Value Added (MVA)
The Market Value Added shows a general upward trend from 2019 to 2021, increasing from approximately $99.96 billion to about $130.85 billion. However, after peaking in 2021, MVA declined in 2022 to roughly $113.32 billion, experienced a slight recovery in 2023 to $119.85 billion, and then decreased again in 2024 to approximately $112.24 billion. This indicates volatility in market valuation with a notable peak in 2021, followed by fluctuations and an overall decline in the last two years.
Adjusted Net Revenues
Adjusted net revenues exhibit consistent growth throughout the entire timeframe. Starting at approximately $26.10 billion in 2019, revenues dipped in 2020 to about $23.56 billion, likely influenced by external factors affecting that year. Despite the dip, revenues rebounded sharply in 2021, continuing their upward trajectory to reach approximately $36.12 billion by 2024. This steady increase highlights improving operational earnings over the years, recovering strongly from the 2020 decrease.
MVA Margin
The MVA margin demonstrates a peak in 2020 at 480.36%, significantly higher than the initial 382.96% in 2019. Thereafter, a declining trend is observed, dropping to 450.20% in 2021 and continuing to decrease each subsequent year, settling at 310.74% in 2024. This gradual decline suggests that although adjusted net revenues have grown, the relationship between market value added and revenues has weakened over time, implying reduced value creation relative to revenue or changes in market valuation efficiency.

In summary, while adjusted net revenues have generally increased, especially after the pandemic-related downturn in 2020, market value added has experienced volatility, peaking in 2021 and subsequently declining. The reduction in MVA margin over recent years points to declining market value growth relative to revenue, which may warrant further investigation into factors affecting investor valuation and profitability margins.