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Should Starbucks Corporation (SBUX) Buy Jamba, Inc. (JMBA)?

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Starbucks Corporation (SBUX)Well, that was quite a reversal.

Shares of Jamba, Inc. (NASDAQ:JMBA) opened 12% lower yesterday after posting mixed quarterly results, but the stock made all of that back to close higher on the day.

The leading stand-alone smoothie chain has been resilient lately. The stock soared 71% last year, and it’s already up 29% so far in 2013.

Jamba, Inc. (NASDAQ:JMBA) Juice has an ordering option where a customer can say “make it light” on select beverages and they will be made with one-third fewer calories, carbs, and sugar. Unfortunately someone said “make it light” on the financials this past quarter, and that’s where revenue clocked in short of expectations.

However, investors apparently forgave the top-line miss — coming to appreciate Jamba’s first full year of profitability and second straight year of positive comps — in ultimately bidding the stock out of yesterday’s initial hole.

Maybe investors began to dive into the conference call and connect the dots. After all, if you begin to flesh out Jamba’s game plan for 2013 and beyond, it certainly seems as if the smoothie giant has Starbucks Corporation (NASDAQ:SBUX)’ Evolution Fresh in its crosshairs. Knowing the acquisitive ways of the java giant, is Jamba, Inc. (NASDAQ:JMBA) making itself too attractive for Starbucks to resist as a buyout candidate?

Juicy fruit
Everyone associates Jamba, Inc. (NASDAQ:JMBA) with its dozens of made-to-order smoothie varieties, but the vast majority of the chain’s 809 stores also sell freshly pressed orange juice, wheatgrass, and carrot juice.

The new store format — and between remodeling old stores and breaking in the fresh design at new locations, we’re looking at as many as 100 stores by the middle of the year — emphasizes the fresh juice offerings that made Evolution Fresh so appealing to Starbucks.

Jamba, Inc. (NASDAQ:JMBA) has already converted three test stores, expanding the juice offerings to include exotic options including kale and ginger, and showcasing the pressing process. The move is paying off. One of the test stores in Santa Monica has seen juice sales go from 3% of revenue to 12% of the mix without completely cannibalizing smoothie sales.

Assuming the new stores continue to be well received, Jamba, Inc. (NASDAQ:JMBA) may transform itself into the juice-centric juice bar concept that Starbucks is trying to build out with Evolution Fresh.

Anything you can do, I can do slower
Starbucks is naturally considerably larger than Jamba, but it can’t expand Evolution Fresh — currently at just four stores — into hundreds of locations overnight. Jamba can. If it can transform 100 of its stores in California and New York into the juice-promoting redesign in a few months, it won’t be long before Jamba’s 809 stores (and counting) are up to speed.

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