Dutch Bros (BROS) Stock Volatility Highlights Growth Potential Amid Competitive Landscape
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1h ago
0mins
Source: Fool
- Stock Volatility: Since its IPO, Dutch Bros has seen a 31% drop followed by a 121% rise, with current shares trading 27% below their all-time high, indicating strong market interest in its growth potential.
- Expansion Goals: As of Q3, Dutch Bros operates 1,081 stores, up from 503 four years ago, with a target of 2,029 stores by 2029, reflecting its ambitious growth strategy.
- Market Competition: Despite rapid growth, Dutch Bros faces fierce competition from larger players like Starbucks and Dunkin' Donuts, which possess significant advantages in brand recognition, retail footprint, and technological infrastructure.
- Profitability Potential: The average build-out cost for new stores is targeted at $1.25 million, with expected annual sales of $1.8 million in the second year, and a management goal of a 45% cash-on-cash return, highlighting the profitability and market appeal of its stores.
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: 61.180
Low
63.00
Averages
76.64
High
85.00
Current: 61.180
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.
