Shares of Starbucks (SBUX -0.87%) seems unable to break out of its rut. The stock is sinking, and while it is hitting new lows, investors remain hesitant to invest in the company, despite its strong brand.

Inflation has made expensive coffee seem even more expensive, giving consumers an easy way to cut spending by switching to cheaper rival brands. At the same time, labor issues have led to higher costs, putting the company on a questionable path. The company’s recent quarterly results also haven’t inspired much confidence that the company is heading in the right direction.

Is Starbucks stock in trouble? Is it headed for further decline? Or could it be a great buying opportunity for investors?

Lack of growth is Starbucks’ biggest problem

One worrying trend at Starbucks is that comparable sales have declined over the past two quarters. This is a worrying metric because comparable sales only matter for stores that have already opened in the same period last year. This effectively allows for a direct comparison since the growth rate is not fueled by new openings, and it gives investors a good indicator of how well existing locations are doing.

Here’s how Starbucks has performed on this metric in recent quarters:

Source: Company registrations.

Notably, when the change in the average receipt was held constant, the number of transactions was primarily responsible for the change in the comparable growth rate. It looks like Starbucks is simply having trouble getting people into its stores. Even if customers bought the same amount of products as they did a year ago, that would technically still be enough to generate a positive comparable growth rate, with the change in the average receipt providing a modest boost.

However, this trend may reverse in the coming quarters as Starbucks has recently been offering higher discounts, which may attract more customers, but a reduced voucher amount could negate this advantage.

Should long-term investors be concerned about this troubling trend?

It’s not a good sign when comparable-store sales are declining, but investors shouldn’t panic about Starbucks just yet. Two quarters is still only two quarters. That’s not proof the company is finished. The company still generated $4.1 billion in profit over the last twelve months. And free cash flow was only slightly lower during that period, at $3.8 billion.

The company is generating plenty of cash that can potentially be invested in new growth opportunities. Starbucks says it is working on “operational improvements” that can help increase efficiency, which in turn can lead to higher sales and profits in the coming quarters.

However, investors should keep in mind that economic conditions are not great right now due to inflation. And there is still a chance that things could get even worse for Starbucks if a global recession hits in the coming months and demand continues to decline. While Starbucks can solve some problems, it cannot solve all of them if its customers are struggling financially.

Should you buy Starbucks stock?

Starbucks shares have fallen more than 20% this year and are trading just a few dollars below their 52-week low of $71.55. At 21 times trailing earnings, the coffee stock is trading at a slightly lower price than average. S&P500 The stock has an average price-earnings ratio (P/E) of 24.

I would like to see a larger discount before buying Starbucks stock, simply because of the potential headwinds that still lie ahead for the company and the economy as a whole. Starbucks can recover from these challenges, but it may take a while, especially if there is a prolonged recession weighing on the global consumer market.