2 Growth Stocks Down 20% or More to Buy Right Now

Key Points

• Growth stocks are volatile, and these two stocks have each dropped more than 20% from their recent highs.

• Dutch Bros reported 28% year-over-year revenue growth in Q2 and opened 61 new stores in the first half of 2025.

• Airbnb’s revenues rose roughly 953% over five years, and free cash flow turned from a loss to a multibillion-dollar surplus.

• 10 stocks we like better than Dutch Bros ›

Growth stocks are volatile. That just goes with the territory. Any high-octane revenue grower is bound to run into a few brick walls, drop off a couple of cliffs, and so on. Speed is dangerous and investors in this category must be ready for some bruises along the way to market-beating gains.

And of course, the best time to buy great growth stocks is when they're down. On that note, I think it's high time to look at coffee chain operator Dutch Bros (NYSE: BROS) and vacation property rentals veteran Airbnb (NASDAQ: ABNB) these days. These growth stocks are down more than 20% from their annual peaks -- and still poised to perform in the long run.

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Dutch Bros is brewing up a nationwide expansion

Let's start with Dutch Bros. The drive-through coffee server has been around since 1992, but joined the stock market as recently as September, 2021. The cash-raising move signaled the start of a concerted growth effort, taking the West Coast favorite nationwide as quickly as possible.

The growth spurt is off to a good start but also has a long way left to go. Dutch Bros locations are found in 19 states so far. It really is a coast-to-coast effort, as proven by the Dutch Bros store that's currently getting its last coat of paint down the road from here. I'm in the Tampa, Florida suburbs -- about as far as you can get from Dutch Bros' Oregon headquarters without a boat.

Image source: Getty Images.

And the expansion push is right there in the company's financials. In August's second-quarter report, Dutch Bros showed a 28% year-over-year revenue boost. The store count increased by 15.5% and systemwide same-store sales rose 6.1%. The sales growth was even faster in company-owned locations, which explains why Dutch Bros' management prefers this operating model over franchise deals. The company opened 61 new stores in the first half of 2025, and only 6 of these are franchised operations.

The company keeps crushing earnings reports and accelerating its growth plans. Yet, Dutch Bros' stock price is down 24.2% from February's all time high as of September 9. This doesn't exactly make the stock cheap, as it trades for 140 times trailing earnings and 7.5 times sales today. I still think it's an opportunity to get in on the ground floor of an exciting growth story. That price to earnings (P/E) ratio doesn't look so expensive anymore when you see that it used to be a four-digit number (max value: 2,846) earlier this year.

Again, growth investing is always a little bit risky. But Dutch Bros could become the next Starbucks (NASDAQ: SBUX) mega-chain with its friendly "broistas" and refreshingly different menu. Did you know that the company generates about 25% of its revenues from custom energy drinks? Management sees greater growth prospects in the fast-growing energy drink market than in the relatively mature coffee shop business.

Buying Dutch Bros stock is like getting in early on Starbucks -- with an extra serving of opportunity from the energy drink focus.

Airbnb turned lockdown losses into solid gold

You're already familiar with Airbnb, which has dominated its private property rentals business since people used flip phones. If you think that makes the company mature and slow, you're sorely mistaken.

I mean, Airbnb took a break during the coronavirus pandemic for obvious reasons. Have you seen how quickly the company got back on its feet, though?

ABNB Revenue (TTM) data by YCharts

Airbnb's revenues are up by 953% over the past five years. Free cash flows swung from a negative $743 million to a $4.3 billion profit in the same period. Yeah, I know that I'm starting this comparison from the very bottom of a deep, dark trough. At the same time, Airbnb exceeded its pre-COVID results by the end of 2022. This is a legit long-term growth story, not a unique and temporary rebound from the pandemic pain.

Now, I agree that Airbnb faces unprecedented difficulties in 2025. The stock is down 24.5% from February's highs due to an uncertain travel industry. Management expects slower growth in the second half, facing tough year-over-year comparisons against last year's Paris Olympics event and shaky macroeconomics.

As a result, the stock trades at a fairly modest 30 times earnings and 18 times free cash flows. Airbnb is a high-growth cash machine, hiding out in Wall Street's bargain bin because of short-term challenges.

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Anders Bylund has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Airbnb and Starbucks. The Motley Fool recommends Dutch Bros. The Motley Fool has a disclosure policy.