For pretty much three years now, Starbucks Corporation (NASDAQ:SBUX) stock has been almost remarkably range-bound. SBUX stock had been one of the market’s better performers for years, but since July 2015, it has stayed almost entirely between a low price of $54 and a high price of $63.

At this point, I’m not sure what gets the stock out of its range. The unfortunate incident in Philadelphia last week hopefully won’t have a long-term impact. I like Starbucks as a consumer, and it’s not as if business is going to collapse.

But the problem remains that Starbucks stock is pricing in more growth than it appears capable of generating. Tax reform has brought in the earnings multiple assigned to SBUX stock, which now sits at a more reasonable 21x. But that still assumes a level of growth that I’m not quite sure Starbucks is capable of generating long term.

And in the near term, with earnings due on Thursday, there’s reason for caution as well. All told, I do think there’s an attractive price for Starbucks stock, but I don’t think $58 is quite it.

Be Careful With Starbucks Stock Around Earnings

One of the problems with SBUX over the past three years is that the stock hasn’t seen any momentum out of earnings reports. An investor has to go back three years, to the Q2 FY15 report, to see a post-earnings gain above 2.1%.

Starbucks has missed Street estimates in terms of revenue in eight of the last nine quarters. SBUX stock has dropped an average of 3.4% after the past five releases, with that high-water 2.1% gain coming after the Q4 report in October.

If only looking at history, then, there’s reason for caution ahead of Thursday’s report. Analyst expectations don’t look particularly onerous, with the Street looking for 18% growth in EPS off a 12% increase in revenue.

With contributions from the company’s buyout of its Chinese joint venture last July, and help from tax reform on the bottom line, neither figure suggests necessarily torrid organic growth from the U.S. operations.

But it’s also possible, if not likely, that the focus coming out of earnings won’t necessarily be on the numbers. As Dana Blankenhorn correctly pointed out, the opportunity in China is a key concern of investors. Those investors are no doubt keenly focused on whether the saber-rattling between the U.S. and China impacted revenue in that important market in fiscal Q2.

The China/Asia Pacific segment as a whole now contains more than a quarter of Starbucks’ worldwide stores. And with the U.S. market looking saturated, it represents the company’s biggest growth opportunity at the moment.

Meanwhile, stateside, same-store sales will be the key number to watch. Comps have slowed to the 3-4% range, not terribly better than the restaurant space as a whole and not enough to support a premium for SBUX stock.

It’s on those two factors that Starbucks’ Q2 likely will be judged. Given risks on both sides, and the company’s history of (admittedly modest) earnings disappointments, I’m not rushing in to get long ahead of the report.

The Long-Term Future for SBUX

I do see some potential value in SBUX stock over the long term. The opportunity in China is real, and Starbucks has room for footprint expansion that’s largely ended in the U.S., in particular. Starbucks still offers a quality product, and its in-store experience is unique.

Fundamentally, tax reform should offset some of the potential wage pressure for the company, as companies like McDonald’s Corporation (NYSE:MCD), Target Corporation (NYSE:TGT) and even Walmart Inc (NYSE:WMT) raise wages and benefits.

The lower tax rate also should drive earnings growth and shareholder returns. Starbucks reiterated targets of 12% annual growth and $15 billion in shareholder returns over the next three years. That latter figure is nearly 20% of the company’s current market capitalization.

But long term, I’m not sure there’s really that much growth potential here, particularly in the U.S. operations. Same-store sales already are down toward 3% based on FY18 guidance, not really enough to drive operating leverage.

There’s a lot of competition coming and a general trend toward unique, local offerings over corporate behemoths like Starbucks. The 12% growth for 21x forward EPS is a decent offering, but it’s not quite compelling, particularly with competitive risks.

So my take on Starbucks is that something needs to come along to get growth up longer term and justify a premium to the rest of the restaurant space. China aside, I’m not sure what that “something” is supposed to be.

This is a nice business, but not one that really justifies a higher valuation than MCD or Yum! Brands, Inc. (NYSE:YUM). Without that premium, the multiyear range for SBUX stock looks about right going forward.

As of this writing, Vince Martin has no positions in any securities mentioned.