No coach worth his salary bases his decision on"Star" rankings. But they do rate and rank players, and the reason certain players are given X Stars, is the same reason they are often ranked high among coaches: size, speed, highschool program, competition, and exposure. So just because a person is a high rated 4 or 5 Star prospect, doesn't mean they're overrated.
Of course on the flip side, while the Saban's, Meyer's, and Harbaugh's may all be hot after a so-called 5 Star prospect, you also see them go after with the same enthusiasm (well maybe not the same as the guy who does so with an enthusiasm unknown to man) for a so-called 3 Star prospect. And also why you see some 4 Star prospects with an offer list full of mid-major programs and mid to lower tier P5 conference teams.
For the most part it's not an exact science and while individual Star rankings are often inconsistent with reality, there is definitely an association of class rank and future on the field team performance.