Where Will Dutch Bros Stock Be in 3 Years?

Shares of Dutch Bros (NYSE: BROS) have nearly doubled in the past year, easily outpacing the 13% gains clocked by the S&P 500 index during the same period, thanks to the healthy growth in the company's top and bottom lines. But this terrific rally has made the stock very expensive right now.

Dutch Bros is now trading at a whopping 179 times trailing earnings. Though its forward earnings multiple of 117 points toward a big jump in its bottom line, the multiple is still on the expensive side. So, should investors consider booking profits in Dutch Bros stock? Or will it be a good idea to keep shares of this drive-thru coffee chain operator in your portfolios in anticipation of more upside over the next three years?

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Dutch Bros is off to a great start in 2025

Dutch Bros released its first-quarter 2025 results on May 7. The company delivered impressive year-over-year revenue growth of 29% to $355 million, driven by an increase in its store count and an improvement in same-store sales. The company's adjusted earnings grew at a stronger pace of 55% to $0.14 per share.

The solid bottom-line growth can be attributed to management's focus on driving an increase in the number of transactions and improving the productivity of its new stores. Dutch Bros CEO Christine Barone believes that the company can continue "to drive sustainable transaction growth by addressing structural barriers, bringing in new customers, enhancing frequency with existing customers and sustaining ongoing momentum in the productivity of our newer shops."

The average capital expenditure on each new Dutch Bros shop fell by 10% from the fourth quarter of 2024, indicating that the company's focus on improving new store productivity is indeed paying off. Importantly, the strong momentum that Dutch Bros witnessed in sales growth and store productivity in Q1 explains why management is now expecting its revenue and earnings this year to trend toward the higher end of its guidance range.

Analysts estimate that Dutch Bros could end up exceeding its revenue guidance range for the year and deliver $1.59 billion in revenue, an increase of almost 24% from last year. Consensus estimates are projecting a 21% jump in the company's earnings this year to $0.59 per share, but the Q1 performance suggests that it could end up doing even better.

Moreover, Dutch Bros' long-term prospects indicate that it could sustain its solid growth for the next couple of years as well. The company opened its 1,000th store in February of this year. It expects to double that count by 2029. Management is confident that Dutch Bros' store count could eventually go up to 7,000, and that it will be able to maintain an annual revenue growth rate of around 20%.

Meanwhile, Dutch Bros is targeting long-term annual adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of more than 20%, which will be higher than the annual growth in its top line. So it won't be surprising to see Dutch Bros stock delivering more gains to investors over the long run. But how much upside can investors expect from this high-flying stock over the next three years?

Where will the stock be in 3 years?

We have already seen that Dutch Bros clocked solid earnings growth in Q1 and has the potential to outpace Wall Street's expectations because of improving transaction sizes and its focus on keeping new store productivity high. What's more, analysts are forecasting Dutch Bros' earnings to grow at a much faster pace over the next couple of years.

BROS EPS Estimates for Current Fiscal Year data by YCharts.

Again, the company has the potential to beat those forecasts when we take its massive addressable market into account. So, Dutch Bros may be able to justify its expensive earnings multiple over the next three years. Meanwhile, the 20% long-term sales growth that the company expects to deliver could lead the market to reward it with more upside.

Assuming Dutch Bros clocks 20% top-line growth in 2026 and 2027, its revenue could hit $2.3 billion after three years. The stock is currently trading at 6 times sales, and a similar multiple after three years could take its market capitalization to $13.8 billion, an increase of 55% from current levels.

Investors can continue to hold this growth stock in their portfolios, as its ability to clock robust levels of revenue and earnings growth in the long run could result in more gains on the market.

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