Prediction: Dutch Bros Will Hit $130 by 2031 for This Obvious Reason
Key Points
Dutch Bros executives believe the U.S. market can support 7,000 locations, a figure six times larger than its current store base.
The company’s same-store sales trend is extremely encouraging.
A bigger footprint will increase ongoing scale advantages, which should result in higher profits.
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In the retail coffee market, Starbucks gets a lot of attention. Its brand recognition, gargantuan physical footprint, and more than five-decade operating history support its strong industry position.
However, investors shouldn't overlook Dutch Bros (NYSE: BROS). The up-and-coming chain presents an exciting opportunity to potentially achieve a strong portfolio return.
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I believe this coffee stock will double to $130 in five years. The company's impressive growth trajectory is why I think this will happen.
Image source: Getty Images.
Management isn't letting up
At the end of 2021, there were 538 Dutch Bros locations in the U.S. This small number, mostly concentrated in the western and southern parts of the country, surged in recent years. As of March 31, there were 1,177 Dutch Bros coffee shops in total. The business opened its first store in the Chicago area in May, for instance, clearly expanding its geographic footprint.
Dutch Bros has huge growth ambitions. During its 2025 investor day, executives revealed that the goal is to reach 2,029 stores by 2029. The management team estimates that the U.S. has a total addressable market of 7,000 locations. This figure is six times larger than the current shop count.
The company's operating playbook focuses on small drive-through retail outlets, averaging 900 square feet in size and with no indoor seating. This strategy not only expands the potential real estate opportunity set, but can also lead to lower upfront capital investment.
These locations are performing well, despite the uncertain macro backdrop. Dutch Bros has reported systemwide same-store sales growth in at least the last nine consecutive quarters. This must definitely be the envy of the retail sector.
What's particularly encouraging is that the company's shops generate almost 75% of their sales after 10 a.m. Compared to the 50% share industry leaders report during this time, Dutch Bros has been able to differentiate itself in a notable way.
Growth will drive financial performance
It's no shock that opening new stores will support revenue and profit gains. This has been the case historically. Between 2022 and 2025, sales climbed 122%. The bottom line went from a $19 million net loss to a $117 million net profit, as advantages developed thanks to greater scale.
From 2025 to 2028, consensus analyst estimates call for Dutch Bros' adjusted diluted earnings per share to rise at a compound annual rate of 27%. Based on recent trends, this outcome isn't out of the question. Even accounting for growth decelerating toward the end of the decade, the stock still has a good chance of doubling in the next five years.
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Neil Patel has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Dutch Bros. The Motley Fool has a disclosure policy.
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