Dutch Bros Inc. Stock Declines Amid Market Weakness
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Sep 26 2024
0mins
Should l Buy BROS?
Source: NASDAQ.COM
Dutch Bros Inc. shares fell by 5.01%, hitting a 5-day low as the market showed signs of weakness.
Despite a recent 10% increase over the past month, the stock is now facing downward pressure, influenced by broader market trends. The Nasdaq-100 and S&P 500 indices are up, but Dutch Bros is struggling to maintain its momentum.
The company's growth strategy, including plans for new store openings and digital engagement, remains strong. However, rising costs and market conditions may lead investors to reassess their positions.
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Analyst Views on BROS
Wall Street analysts forecast BROS stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for BROS is 76.64 USD with a low forecast of 63.00 USD and a high forecast of 85.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
13 Analyst Rating
12 Buy
1 Hold
0 Sell
Strong Buy
Current: 52.420
Low
63.00
Averages
76.64
High
85.00
Current: 52.420
Low
63.00
Averages
76.64
High
85.00
About BROS
Dutch Bros Inc. is an operator and franchiser of drive-thru shops, which is focused on serving hand-crafted beverages. The Company sells a range of customizable hot, iced and blended beverages. Coffee-based beverages include handcraft espresso shots for both hot and cold custom classic and signature coffee beverages. It also sells proprietary coffee-based Freeze blended beverages and cold brew. Its Private Reserve coffee is a 100% Arabica three-bean blend, roasted by the Company in Grants Pass, Oregon or Melissa, Texas facilities. The Company has two segments: Company-operated shops, and Franchising and other. The Company-operated shops segment includes retail coffee shop sales to end consumers. The Franchising and other segment includes bean and product sales to franchise partners and includes the initial franchise fees, royalties, and marketing fees. It has approximately 1,101 shops, of which over 779 are operated by the Company and 322 are franchised, across 26 states.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Dutch Bros Outpaces Starbucks with Consistent Growth
- Consistent Sales Growth: Dutch Bros has achieved 12 consecutive quarters of same-store sales growth, indicating strong operational health, while Starbucks faced six quarters of declines during the same period, highlighting increasing market competition.
- Expansion Potential: With only 1,081 locations currently in the U.S., Dutch Bros' CEO projects the potential to expand to 7,000 stores, suggesting significant future revenue and earnings growth, particularly in the eastern and northern markets.
- Revenue Structure Advantage: Dutch Bros generates nearly 75% of its revenue after 10 a.m., compared to 50% for other chains, allowing for more efficient store management and better handling of customer traffic.
- Strategic Food Initiative: Dutch Bros plans to expand its food program throughout 2026, aiming to become a one-stop shop during the morning daypart, which will attract a broader customer base and further drive sales growth.
See More
Dutch Bros Coffee Emerges as a Strong Competitor
- Market Share Comparison: Starbucks boasts a market cap of $110 billion with $9.9 billion in Q1 revenue, while Dutch Bros has a market cap of $9 billion, indicating significant potential for expansion for the latter.
- Sales Timing Advantage: Dutch Bros generates nearly 75% of its revenue after 10 a.m., allowing for more flexible store management and effective customer traffic handling, supporting its goal of $1.8 million in average annual unit volumes.
- Same-Store Sales Growth: After six consecutive quarters of declines, Starbucks anticipates a 3% same-store sales increase in fiscal 2026, while Dutch Bros has achieved 12 straight quarters of same-store sales growth, highlighting its operational health and competitive edge.
- Expansion Potential: With 1,081 locations in the U.S., Dutch Bros' leadership believes there is room for 7,000 stores, and if this potential is realized, revenue and earnings are set to soar significantly.
See More
Three Ways Dutch Bros Outpaces Starbucks
- Sales Timing Advantage: Dutch Bros generates nearly 75% of its revenue after 10 a.m., contrasting sharply with leading chains like Starbucks, which rely more heavily on morning sales, allowing Dutch Bros to manage customer traffic more effectively and enhance operational efficiency.
- Consistent Growth Performance: After six consecutive quarters of declining same-store sales, Starbucks anticipates a 3% increase in fiscal 2026, while Dutch Bros has achieved 12 straight quarters of same-store sales growth, highlighting its strong market appeal and performance in the industry.
- Significant Expansion Potential: With a market cap of only $9 billion and 1,081 locations as of September 30, 2025, Dutch Bros sees the potential to open 7,000 stores in the U.S., which could significantly boost its future revenue and earnings as it capitalizes on this growth opportunity.
- Competitive Market Outlook: The growth potential and market positioning of Dutch Bros suggest it may offer investors higher returns over the next decade compared to Starbucks, making it an attractive option for those looking for investment opportunities in the coffee sector.
See More
Tech Stocks Rebound, Broadcom Rating Upgraded
- Market Rebound: After a tough week, tech stocks rebounded on Friday, although Amazon pulled back post-earnings, with the S&P 500 and Nasdaq still lower for the week, indicating ongoing volatility and investor focus on the tech sector.
- Surge in Capital Expenditures: Meta's capital expenditures reached $72.22 billion for the full year 2025, with plans to invest up to $135 billion in 2026, reflecting strong demand for AI infrastructure that is expected to boost earnings and backlogs for various companies.
- Broadcom Rating Upgrade: Given the capital expenditure plans from Alphabet and Meta, Broadcom's rating has been upgraded to buy, with expectations that it will exceed earnings estimates, and the current stock pullback presents an attractive entry point, showcasing confidence in the semiconductor sector.
- Economic Data Focus: Important economic data will be released next week, including the January employment report, with economists expecting nonfarm job gains of about 70,000 and an unchanged unemployment rate of 4.4%, as the market remains sensitive to changes in the employment landscape.
See More
Dutch Bros Sustains Growth with Expansion Plans
- Significant Revenue Growth: In Q3 2025, Dutch Bros generated approximately $424 million in revenue, a 25% year-over-year increase, with system same-store sales rising 5.7% and company-operated sales up 7.4%, indicating a strong increase in customer purchasing behavior that solidifies its market position.
- Accelerated New Store Openings: The company opened 38 new locations in Q3, 34 of which were company-operated, bringing the total to over 1,080 stores, demonstrating efficient execution of its expansion strategy and a robust new store engine.
- Improving Profit Margin Trends: Although profit margins at company-operated stores fell from 29.5% to 28%, overall profit margins are improving, indicating that the company can maintain profitability while managing rising costs, reflecting its long-term growth potential.
- Clear Future Expansion Goals: Dutch Bros aims to increase its store count to 2,000 by 2029, with the CEO mentioning a potential reach of 7,000 stores, indicating that the company is still in a growth phase, supported by an average unit volume of approximately $2.08 million, which underpins its expansion strategy.
See More
Dutch Bros Plans to Double Store Count by 2029
- Rapid Growth: Dutch Bros has expanded its store count from approximately 500 to over 1,000, doubling in the past four years and planning to double again to reach 2,029 stores by 2029, showcasing its strong market expansion capabilities.
- Profitability Improvement: The company reported a net income of $27.3 million in Q3 2025, up 25% from $21.7 million the previous year, indicating that it is enhancing profitability while rapidly expanding, which boosts investor confidence.
- Market Concerns: Despite strong performance, there are worries about the company's outlook for 2026, particularly with high inflation and slowing consumer spending, as coffee is positioned as a luxury item that may affect future growth.
- Valuation Risks: With a P/E ratio of 123, Dutch Bros trades at a premium price, and even with a recent price drop, such a high valuation necessitates sustained high growth, prompting investors to carefully assess its long-term investment value.
See More
Dutch Bros Outpaces Starbucks with Consistent Growth
- Consistent Sales Growth: Dutch Bros has achieved 12 consecutive quarters of same-store sales growth, indicating strong operational health, while Starbucks faced six quarters of declines during the same period, highlighting increasing market competition.
- Expansion Potential: With only 1,081 locations currently in the U.S., Dutch Bros' CEO projects the potential to expand to 7,000 stores, suggesting significant future revenue and earnings growth, particularly in the eastern and northern markets.
- Revenue Structure Advantage: Dutch Bros generates nearly 75% of its revenue after 10 a.m., compared to 50% for other chains, allowing for more efficient store management and better handling of customer traffic.
- Strategic Food Initiative: Dutch Bros plans to expand its food program throughout 2026, aiming to become a one-stop shop during the morning daypart, which will attract a broader customer base and further drive sales growth.
See More
Dutch Bros Coffee Emerges as a Strong Competitor
- Market Share Comparison: Starbucks boasts a market cap of $110 billion with $9.9 billion in Q1 revenue, while Dutch Bros has a market cap of $9 billion, indicating significant potential for expansion for the latter.
- Sales Timing Advantage: Dutch Bros generates nearly 75% of its revenue after 10 a.m., allowing for more flexible store management and effective customer traffic handling, supporting its goal of $1.8 million in average annual unit volumes.
- Same-Store Sales Growth: After six consecutive quarters of declines, Starbucks anticipates a 3% same-store sales increase in fiscal 2026, while Dutch Bros has achieved 12 straight quarters of same-store sales growth, highlighting its operational health and competitive edge.
- Expansion Potential: With 1,081 locations in the U.S., Dutch Bros' leadership believes there is room for 7,000 stores, and if this potential is realized, revenue and earnings are set to soar significantly.
See More
Three Ways Dutch Bros Outpaces Starbucks
- Sales Timing Advantage: Dutch Bros generates nearly 75% of its revenue after 10 a.m., contrasting sharply with leading chains like Starbucks, which rely more heavily on morning sales, allowing Dutch Bros to manage customer traffic more effectively and enhance operational efficiency.
- Consistent Growth Performance: After six consecutive quarters of declining same-store sales, Starbucks anticipates a 3% increase in fiscal 2026, while Dutch Bros has achieved 12 straight quarters of same-store sales growth, highlighting its strong market appeal and performance in the industry.
- Significant Expansion Potential: With a market cap of only $9 billion and 1,081 locations as of September 30, 2025, Dutch Bros sees the potential to open 7,000 stores in the U.S., which could significantly boost its future revenue and earnings as it capitalizes on this growth opportunity.
- Competitive Market Outlook: The growth potential and market positioning of Dutch Bros suggest it may offer investors higher returns over the next decade compared to Starbucks, making it an attractive option for those looking for investment opportunities in the coffee sector.
See More
Tech Stocks Rebound, Broadcom Rating Upgraded
- Market Rebound: After a tough week, tech stocks rebounded on Friday, although Amazon pulled back post-earnings, with the S&P 500 and Nasdaq still lower for the week, indicating ongoing volatility and investor focus on the tech sector.
- Surge in Capital Expenditures: Meta's capital expenditures reached $72.22 billion for the full year 2025, with plans to invest up to $135 billion in 2026, reflecting strong demand for AI infrastructure that is expected to boost earnings and backlogs for various companies.
- Broadcom Rating Upgrade: Given the capital expenditure plans from Alphabet and Meta, Broadcom's rating has been upgraded to buy, with expectations that it will exceed earnings estimates, and the current stock pullback presents an attractive entry point, showcasing confidence in the semiconductor sector.
- Economic Data Focus: Important economic data will be released next week, including the January employment report, with economists expecting nonfarm job gains of about 70,000 and an unchanged unemployment rate of 4.4%, as the market remains sensitive to changes in the employment landscape.
See More
Dutch Bros Sustains Growth with Expansion Plans
- Significant Revenue Growth: In Q3 2025, Dutch Bros generated approximately $424 million in revenue, a 25% year-over-year increase, with system same-store sales rising 5.7% and company-operated sales up 7.4%, indicating a strong increase in customer purchasing behavior that solidifies its market position.
- Accelerated New Store Openings: The company opened 38 new locations in Q3, 34 of which were company-operated, bringing the total to over 1,080 stores, demonstrating efficient execution of its expansion strategy and a robust new store engine.
- Improving Profit Margin Trends: Although profit margins at company-operated stores fell from 29.5% to 28%, overall profit margins are improving, indicating that the company can maintain profitability while managing rising costs, reflecting its long-term growth potential.
- Clear Future Expansion Goals: Dutch Bros aims to increase its store count to 2,000 by 2029, with the CEO mentioning a potential reach of 7,000 stores, indicating that the company is still in a growth phase, supported by an average unit volume of approximately $2.08 million, which underpins its expansion strategy.
See More
Dutch Bros Plans to Double Store Count by 2029
- Rapid Growth: Dutch Bros has expanded its store count from approximately 500 to over 1,000, doubling in the past four years and planning to double again to reach 2,029 stores by 2029, showcasing its strong market expansion capabilities.
- Profitability Improvement: The company reported a net income of $27.3 million in Q3 2025, up 25% from $21.7 million the previous year, indicating that it is enhancing profitability while rapidly expanding, which boosts investor confidence.
- Market Concerns: Despite strong performance, there are worries about the company's outlook for 2026, particularly with high inflation and slowing consumer spending, as coffee is positioned as a luxury item that may affect future growth.
- Valuation Risks: With a P/E ratio of 123, Dutch Bros trades at a premium price, and even with a recent price drop, such a high valuation necessitates sustained high growth, prompting investors to carefully assess its long-term investment value.
See More
