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Luckin Coffee (OTCPK:LKNC.Y) Could Be 28% Undervalued As Buyback Expands

Simply Wall St · 1d ago

Expanded Buyback Puts Focus on Luckin Coffee Stock

Luckin Coffee (OTCPK:LKNC.Y) drew fresh investor attention after announcing on September 1, 2026 that it increased its equity buyback authorization by US$200 million, taking the total program to US$500 million.

Luckin Coffee shares trade at US$34.81 after a 2.5% 1 day share price gain and an 11.57% 90 day share price return, although the year to date share price return is slightly lower and the 1 year total shareholder return is also slightly negative.

Compare Luckin Coffee's buyback story with other companies that screen well on value and quality using our hand picked list of 47 high quality undervalued stocks.

The enlarged buyback and current US$34.81 share price put Luckin Coffee in the middle of a wide valuation gap, with targets and intrinsic value estimates both higher. How far that gap really runs is the next question.

Most Popular Narrative: 27.8% Undervalued

Luckin Coffee's most followed narrative points to a fair value of $48.21 per share compared with the latest close at $34.81, which frames the expanded buyback against a sizeable valuation gap.

Ongoing investments in proprietary supply chain infrastructure, such as the commissioning of the new Xiamen roasting facility and integration of existing plants, are expected to enhance vertical integration, lower cost of materials as a percent of revenues, and drive expansion of gross and net margins over the long term. Sustained product innovation and menu diversification, including newly launched health focused and low calorie beverage offerings, better align Luckin with shifting consumer preferences around wellness, enabling the company to extend its reach and tap into rising demand for healthier specialty drinks, supporting increased average ticket size and incremental sales.

Read the complete narrative. Read the complete narrative.

Want to see what sits behind that fair value for Luckin Coffee? The narrative leans heavily on compounding earnings, rising margins and a future valuation multiple that assumes the growth story keeps translating into profitable scale. The key assumptions are laid out in full, but the balance between revenue growth, profitability and the discount rate may surprise you.

Result: Fair Value of $48.21 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, Luckin Coffee still faces pressure from potential store saturation and rising delivery related costs, which could squeeze margins and challenge the positive earnings narrative.

Find out about the key risks to this Luckin Coffee narrative.

Next Steps

With both risks and rewards in play for Luckin Coffee, it makes sense to move quickly and review the evidence yourself. To see how the key issues compare in one place, review the 4 key rewards and 1 important warning sign.

Looking for more investment ideas beyond Luckin Coffee?

If you are serious about building a stronger portfolio, do not stop with Luckin Coffee. Use focused stock lists to spot opportunities before the crowd moves.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.