A combination of new store openings and rising same-store sales creates a powerful revenue driver for Dutch Bros.
It's not unreasonable to believe that this business can develop competitive advantages as it scales up.
This growth stock trades 45% off its record, and the valuation has gotten cheaper over the past year.
Investors certainly gravitate toward companies that are able to increase their sales figures at a brisk pace each year. This means that there's something exciting happening. And the business in question might have serious long-term potential that can benefit one's portfolio.
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Any business can drive growth by opening new locations. Dutch Bros (NYSE: BROS) stands out because it has posted consistent same-store sales growth to the tune of 5.6% in 2025. This was supported by 3.2% more transactions. That's an encouraging trend that contributed to overall revenue rising 27.9% last year.
This isn't to say that management isn't focused on aggressive expansion. After opening 154 new coffee shops last year, there are now 1,136 Dutch Bros locations in total. The plan is to reach 2,029 stores in 2029. And the total market opportunity is a whopping 7,000 shops, up from a previous target estimate of 4,000. It's easy to be bullish.
With more scale comes an improving bottom line. Net income increased 76% year over year to $117.3 million in 2025. The sell-side analyst community forecasts 27.4% compound annual growth for earnings per share over the next three years, a faster gain than the top line.
Because Dutch Bros is so early on its growth trajectory, there are valid concerns that its success won't last. This is why investors must pay attention to same-store sales trends going forward. It would be discouraging to see Dutch Bros' energizing gains crash and the business start to report falling same-store figures.
As the company gets bigger, though, it should start to develop durable competitive advantages. Starbucks is a good comparison. It has a cost advantage, as its massive revenue and store base enable efficiencies that a smaller chain doesn't have. Starbucks also has a globally recognized brand that supports its premium pricing. Should Dutch Bros' success continue, it's not unreasonable to think it could build these favorable characteristics.
Dutch Bros shares trade 45% below their record (as of Feb. 23). Volatility has been extreme over the past couple of years.
However, investors who can handle the ups and downs and have patience to buy and hold for several years are in a good position to profit. The stock's price-to-earnings and price-to-sales ratios have both come down significantly in the past year, presenting an attractive entry point.
If Dutch Bros continues to report strong fundamentals, it can be a winning portfolio addition.
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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 and Starbucks. The Motley Fool has a disclosure policy.