Love Dutch Bros Stock? Here's a Little-Known Coffee IPO You Should Take a Look At

Oregon-based coffee chain Dutch Bros (NYSE: BROS) went public in 2021, and there are many things that investors like about the business.

At the end of 2020, Dutch Bros had 441 locations total but only 182 were owned by the company. The average location generated less than $1.7 million in annual sales volume. And it had full-year net income of less than $6 million. In other words it was small, average unit volumes (AUVs) were modest, and net income was slim. That's how things were prior to its initial public offering (IPO).

As of the second quarter of 2025, however, Dutch Bros has grown and improved dramatically. It now has more than 1,000 locations, and more than 700 are owned by the company. Its AUV is now north of $2 million. And over the last 12 months, the company earned net income of $89 million.

What Dutch Bros has done in less than five years has been impressive. And if the company stays on its current course, it could create a lot of value for its shareholders.

If you love Dutch Bros stock, then there's a new coffee stock in town that you might be interested in. Black Rock Coffee Bar (NASDAQ: BRCB), also based in Oregon, went public in September and shares a lot of traits with its larger rival. But if things go right, its stock could have more upside because the company went public much earlier in its long-term journey.

Meet the new Oregon coffee stock

Like Dutch Bros, Black Rock Coffee Bar is primarily a drive-thru coffee chain, although Black Rock does now have seating areas in 75% of its 158 locations. But unlike Dutch Bros', all of Black Rock's locations are owned by the company, meaning there aren't any franchisees to consider.

Image source: Getty Images.

This is a massive growth opportunity for investors today. Black Rock Coffee Bar's management expects to grow its base of coffeehouses by 20% annually. If it can keep up this strong pace, it could have about 1,000 locations by 2035 -- roughly the same size that Dutch Bros is now.

The other component of its growth engine may be same-store-sales growth. As of June, Black Rock's AUV was $1.2 million; that's still a small sales base per location. But same-store sales are routinely ticking higher, including a strong 6% gain in 2024 and a 10% gain in the first half of 2025. And because sales per location are relatively low, it has plenty of room to increase on a per-store basis for years to come.

If Black Rock Coffee Bar's same-store sales continue to increase, its digital business will likely play a part. The company only launched a loyalty program with its app in June 2024. But in just one year, it hit 1.8 million members -- around 12,000 per location -- and these members make purchases far more frequently than before. It's a good sign for a young brand.

Based on its valuation when it went public, Black Rock Coffee Bar has a market cap of about $1 billion as of this writing. Considering it's generated $179 million in trailing-12-month revenue, that means it trades at just over 5 times its sales. For comparison, Dutch Bros stock trades at a price-to-sales (P/S) ratio of 4.

Black Rock Coffee Bar trades at a comparable P/S ratio to Dutch Bros, which suggests that this IPO stock isn't outrageously priced. And if it delivers even a fraction of the growth that it intends to deliver over the next several years, then Black Rock's valuation today would certainly look like a bargain in hindsight.

Some things to watch

In 2024, Black Rock had a net loss of $7.2 million, and it lost another $1.9 million in the first half of 2025. It would be easier to be bullish about the company if it was profitable.

However, store-level economics give some reason to hope. In the first half of 2025, Black Rock had a store-level profit margin of 29%. This metric strips out corporate expenses, so it could be a good indicator of what the business is capable of as it scales up and gains operating leverage.

Dutch Bros measures this with its company-operated store contribution margin, which stands at about 30% right now. So when looking at per-store economics, Black Rock Coffee Bar stands toe-to-toe with Dutch Bros. The key to profitability, therefore, may simply be a matter of scale.

Scaling up will not be easy for Black Rock Coffee Bar -- this space is intensely competitive and success isn't guaranteed. But the company has shown promise early, and could be a big winner if it's able to execute its long-term growth plans.

Jon Quast has no position in any of the stocks mentioned. The Motley Fool recommends Dutch Bros. The Motley Fool has a disclosure policy.