Dutch Bros Inc. (BROS) | Investment Case

1. Company Snapshot

1.a. Company Description

Dutch Bros Inc.operates and franchises drive-thru shops.It offers Dutch Bros hot and cold espresso-based beverages, and cold brew coffee products, as well as Blue Rebel energy drinks, tea, lemonade, smoothies, and other beverages through company-operated shops and online channels.

As of May 11, 2022, it operated 572 drive-thru coffee locations across 12 states in the United States.The company was founded in 1992 and is headquartered in Grants Pass, Oregon.

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1.b. Last Insights on BROS

Breaking News: Dutch Bros Inc has been gaining attention as a growth stock opportunity. The company has a major chance to expand with new locations. Analysts consider Dutch Bros as an interesting alternative to other stocks like Chipotle Mexican Grill. Recent news highlights the company's potential for long-term growth. Some analysts recommend buying Dutch Bros as one of the three brilliant growth stocks to hold for the long term. This view is shared by multiple sources citing the company's opportunities for expansion.

1.c. Company Highlights

Last Price	48.81
Change Percentage	-1.85%
Open	49.38
Previous Close	49.73
Market Cap ( Millions)	8443
Volume	5073625
Year High	80.62
Year Low	47.16
M A 50	59.25
M A 200	61.39

FCF Yield	0.47%
Dividend Yield	0.00%
ROE	12.41%
Debt / Equity	226.01%
Net Debt / EBIDTA	478.67%
Price To Book	9.11
Price Earnings Ratio	77.67
Price To FCF	211.27
Price To sales	7.02
EV / EBITDA	48.14

2. Dutch Bros: Robust Growth and Expanding Margins

Dutch Bros Inc. reported a strong Q4 and full-year 2025 earnings, with revenues growing 28% to $1,640,000,000 and adjusted EBITDA increasing 31% to $303,000,000. The company's adjusted EPS came in at $0.17, beating estimates of $0.1. The robust financial performance was driven by a 5.6% system same-shop sales growth and 5.4% transaction growth in Q4, with the company's loyalty program, Dutch Rewards, surpassing 15 million members. The company's 2025 company-operated contribution margin was approximately 29%, despite commodity cost headwinds.

Publication Date: Feb -15

                                    📋 Highlights
                                    Revenue & EBITDA Growth::
                                                Q4 2025 revenue rose 28% to $1.64B; adjusted EBITDA surged 31% to $303M.
Record AUVs::
                                                System-wide average unit volumes hit $2.1M, driven by 5.6% same-shop sales growth and 5.4% transaction growth.
Shop Expansion::
                                                Opened 154 new shops in 2025, expanding to 1,136 system-wide shops across 25 states.
Loyalty Program Impact::
                                                Dutch Rewards surpassed 15M members, contributing to 72% of system transactions.
2026 Guidance::
                                                Plans to open 181 new shops (16% growth), with $2B–$2.03B revenue and $355M–$365M adjusted EBITDA target.

                                

Operational Highlights

The company opened 154 new shops in 2025, expanding its presence to 25 states and 1,136 system-wide shops. System-wide AUVs reached a record $2,100,000, driven by strong transaction growth and new shop performance. The company's order ahead program ended 2025 with a 14% mix in Q4, and mobile order hit 14% of transactions in Q4, allowing the company to balance demand across shops.

Guidance and Outlook

Looking ahead to 2026, the company expects to open at least 181 new system shops, including 20 Clutch Coffee Bar conversions. It anticipates full-year system same-shop sales growth of 3-5%, with a comp lift impact from the new food program phased in throughout the year. The company's guidance for 2026 includes total revenues of $2,000,000,000 to $2,030,000,000, representing 22% to 24% growth year over year, and adjusted EBITDA is estimated to be $355,000,000 to $365,000,000. Analysts estimate next year's revenue growth at 23.4%, in line with the company's guidance.

Valuation and Metrics

With a P/E Ratio of 84.65 and an EV/EBITDA of 47.11, the company's valuation appears to be pricing in significant growth expectations. The company's ROE stands at 12.41%, indicating a relatively healthy return on equity. The Net Debt / EBITDA ratio is -0.12, indicating a net cash position, providing flexibility for future investments and acquisitions.

Strategic Initiatives

The company is confident in its value proposition and service, and its food program is performing well, with a 4% comp lift in pilot stores. The Clutch acquisition is seen as a productive use of capital, allowing for rapid entry into a new market. The company will continue to look for conversion opportunities and ground-up builds to expand, and is actively seeking small-scale acquisition opportunities to accelerate unit growth.

3. NewsRoom

Best Stock to Buy and Hold Forever: Dutch Bros vs. Starbucks

Feb -20

Source: fool.com

Head to Head Review: Dutch Bros (NYSE:BROS) and TH International (NASDAQ:THCH)

Feb -20

Source: defenseworld.net

3 Brilliant Growth Stocks to Buy Now and Hold for the Long Term

Feb -19

Source: fool.com

Chipotle Mexican Grill Stock Is Interesting, but Here's What I'd Buy Instead

Feb -19

Source: fool.com

2 Monster Stocks to Hold for the Next 5 Years

Feb -18

Source: fool.com

Is Digital Adoption Strengthening Dutch Bros' Drive-Thru Model?

Feb -18

Source: zacks.com

5 Reasons to Buy Dutch Bros Stock Like There's No Tomorrow

Feb -18

Source: fool.com

PARAMOUNT COMMENTS ON WARNER BROS. DISCOVERY DISCLOSURES

Feb -17

Source: prnewswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (10.29%)

6. Segments

Company-operated Shops

Expected Growth: 10.33%

Dutch Bros Inc.'s 10.33% growth in company-operated shops is driven by strategic store openings in high-demand markets, effective marketing campaigns, and a loyal customer base. Additionally, the company's focus on employee development and retention has led to improved operational efficiency, contributing to the growth. Furthermore, the brand's unique culture and customer experience have enabled it to maintain a competitive edge in the coffee shop market.

Franchising and Other

Expected Growth: 9.95%

Dutch Bros Inc.'s 9.95% growth in Franchising and Other is driven by increasing demand for coffee and beverages, successful franchisee partnerships, strategic store openings, and effective marketing campaigns. Additionally, the company's focus on digital transformation, loyalty programs, and menu innovation also contribute to its growth.

7. Detailed Products

Coffee Drinks

Specialty coffee drinks made with high-quality Arabica beans, including espresso, latte, cappuccino, and cold brew.

Tea Drinks

Hot and iced tea drinks made with premium tea leaves, including chai, green tea, and fruit infusions.

Rebel Energy Drinks

High-caffeine energy drinks with a unique blend of ingredients to provide a mental and physical energy boost.

Smoothies

Blended drinks made with real fruit and yogurt, available in a variety of flavors.

Mocha Freeze

A frozen coffee drink blended with ice and topped with whipped cream.

Breve

A rich and creamy coffee drink made with half-and-half instead of milk.

8. Dutch Bros Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Dutch Bros Inc. has a unique brand image and customer loyalty, making it difficult for substitutes to gain traction.

Bargaining Power Of Customers

While customers have some bargaining power due to the availability of alternatives, Dutch Bros Inc.'s strong brand loyalty and customer retention mitigate this force.

Bargaining Power Of Suppliers

Dutch Bros Inc. has a diversified supplier base, reducing the bargaining power of individual suppliers.

Threat Of New Entrants

While there are some barriers to entry, the coffee shop industry is relatively easy to enter, and new entrants could potentially disrupt the market.

Intensity Of Rivalry

The coffee shop industry is highly competitive, with many established players and a high level of rivalry among them.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	24.37%
Debt Cost	7.70%
Equity Weight	75.63%
Equity Cost	16.18%
WACC	14.11%
Leverage	32.22%

11. Quality Control: Dutch Bros Inc. passed 3 out of 9 key points

Strong Liquidity

Low Deb

Strong Interest Coverage

Healthy Cash Flow

Operating Inefficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Darden

A-Score: 6.1/10

Value: 4.0

Growth: 6.0

Quality: 5.4

Yield: 6.0

Momentum: 6.0

Volatility: 9.0

1-Year Total Return ->

Domino's Pizza

A-Score: 5.4/10

Value: 4.2

Growth: 6.4

Quality: 6.0

Yield: 3.0

Momentum: 4.0

Volatility: 8.7

1-Year Total Return ->

Brinker

A-Score: 4.7/10

Value: 4.7

Growth: 8.0

Quality: 5.4

Yield: 0.0

Momentum: 6.0

Volatility: 4.0

1-Year Total Return ->

Wingstop

A-Score: 4.4/10

Value: 2.5

Growth: 9.4

Quality: 6.9

Yield: 1.0

Momentum: 3.0

Volatility: 3.3

1-Year Total Return ->

Shake Shack

A-Score: 3.1/10

Value: 1.3

Growth: 7.0

Quality: 4.2

Yield: 0.0

Momentum: 2.0

Volatility: 4.3

1-Year Total Return ->

Dutch Bros

A-Score: 2.9/10

Value: 0.2

Growth: 5.3

Quality: 3.8

Yield: 0.0

Momentum: 5.5

Volatility: 2.7

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

42.67%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

14.11%

Dutch Bros Inc. - US26701L1008

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on BROS

1.c. Company Highlights

Expensive

Lower Quality

Average Yield

Earnings Beats

Revenues Beats

Strong Momentum

Stable Momentum

Average Quality

Medium Volatility

More Volatile

2. Dutch Bros: Robust Growth and Expanding Margins

Operational Highlights

Guidance and Outlook

Valuation and Metrics

Strategic Initiatives

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (10.29%)

6. Segments

Company-operated Shops

Expected Growth: 10.33%

Franchising and Other

Expected Growth: 9.95%

7. Detailed Products

Coffee Drinks

Tea Drinks

Rebel Energy Drinks

Smoothies

Mocha Freeze

Breve

8. Dutch Bros Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

11. Quality Control: Dutch Bros Inc. passed 3 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

48.81$

Current Price

48.81$

Potential

-0.00%

Expected Cash-Flows

12.e Scoring ^Insights

12.f DCF ^BETA