Starbucks (SBUX, Financial) just posted its Q2 FY25 numbers—and while they weren't pretty on the surface, there's more brewing underneath. Revenue came in at $8.8 billion, up 2%, but margins took a hit. GAAP EPS dropped 50% to $0.34, with U.S. same-store sales down 2% and transactions falling 4%. International markets fared a bit better—comps rose 2%, led by a 3% bump in foot traffic. Still, the real story here isn't just what happened last quarter. It's what the company is rebuilding.

CEO Brian Niccol says his “Back to Starbucks” turnaround plan is gaining traction, even if the numbers don't show it yet. The company opened 213 new stores, trimmed 1,100 corporate jobs, and reorganized globally to boost long-term efficiency. It's also still paying shareholders—announcing a $0.61 dividend, continuing a 60-quarter streak with nearly 19% CAGR. CFO Cathy Smith called it a foundational reset, focusing on long-term returns instead of chasing short-term sugar highs.

Now here's where it gets interesting for investors. The stock is currently trading well below its GF Value of $99.88—sitting near the 30% undervalued zone according to the chart. That's “modestly undervalued” territory with a healthy upside if the turnaround sticks. Starbucks isn't firing on all cylinders yet, but with a cleaner cost base and fresh leadership, the setup looks more attractive than the latest headline EPS miss might suggest.