1 Growth Stock Down 36% in 2026 to Buy and Hold

It can feel risky to invest in a stock that's lost 38% of its value in nine months, but the market isn't always rational. The times that it isn't create opportunities to buy great stocks on the dip that can lead to incredible shareholder value.

These opportunities can happen when the market crashes or corrects, or for any specific stock when investor sentiment turns negative. Take Dutch Bros (NYSE: BROS), for instance. The coffee shop chain is growing fast and has fantastic long-term potential, but it's down 36% this year.

Here's why it's a great stock to buy and hold.

The road to 7,000 stores

Dutch Bros is more than 30 years old, but it's spent most of its life as a small local chain of shops in Oregon. The company embarked on an ambitious expansion plan when it went public in 2021, and it's growing at a fast clip.

Most of the company's 1,225-store fleet is drive-thru only, but it's experimenting with walk-up windows. In other words, it's not your standard coffee shop meant for sitting, but it's meeting demand today while being deliberate about its real estate plan. Its first walk-up window was launched in Los Angeles, near the University of Southern California, and it had the company's highest sales volume before Dutch Bros opened in Chicago in May. That bodes well for both the new walk-up window format and its entry into new urban metro areas.

Image source: Dutch Bros.

Dutch Bros opened 154 stores last year and plans to open 185 this year. In order to meet its goal of having 2,029 stores by 2029, it needs to accelerate store openings. That might be harder than expected, since it ended its offer for 65 Salad and Go stores when the price was increased, and the market wasn't thrilled about that. There is the danger that Dutch Bros won't meet the goal, and the market is already pricing in that possibility.

In the long term, management envisions opening as many as 7,000 locations across the U.S. The company's been entering new regions successfully.

What is Dutch Bros stock worth?

Dutch Bros has been reporting impressive metrics, including a 32% year-over-year increase in sales in the 2026 second quarter, driven by new stores and rising same-store sales. It's attracting new customers and generating higher profits, too.

Another way it's meeting today's moment is in its digital rewards program. 73% of transactions went through digital channels in Q2, and registered members by shop have increased 50% over the last three years. These details point to a fast-growing business with high long-term potential.

However, because the stock has been expensive, it's liable to fall on any misstep, like the Salad and Go deal. Today, shares trade at just over 55 times trailing 12-month earnings, the lowest since it became profitable, and 2.7 time sales, well-below its three-year average.

BROS PE Ratio data by YCharts

That's still not cheap, and it implies confidence in the story. There's still the possibility that it could go even lower if the company doesn't come through on store count, if same-shop sales decelerate, or any number of other things that can go wrong do. However, if you buy and hold for at least five years, you should be well rewarded.

Jennifer Saibil has positions in Dutch Bros. The Motley Fool has positions in and recommends Dutch Bros. The Motley Fool has a disclosure policy.