Dutch Bros Stock Is Down 24% Over the Past Three Months. Should Investors Buy the Dip?

Stock market volatility will test the mettle of even the most seasoned investors, and the first three months of 2026 have been a prime example. Take, for instance, Dutch Bros (NYSE: BROS). Fears about macroeconomic conditions, persistent inflation, and cautious consumer spending have weighed on the stock. As a result, the regional coffee chain tumbled nearly 25% during roughly the first three months of 2026, despite delivering robust results.

This leaves investors asking the quintessential investing question: Is it time to buy the dip on Dutch Bros, or should they simply stay away? Let's look at what the evidence reveals.

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Piping-hot results

Dutch Bros' recent financial results stand in stark contrast to the stock performance, so let's start there. For the fourth quarter, Dutch Bros delivered revenue that climbed 29% year over year to $443.6 million, its fastest growth rate in nearly a year, accelerating from 25% growth in Q3. This fueled strong profit growth, as earnings per share of $0.17 surged 143%.

The piping-hot results were driven by robust systemwide same-store sales, which grew 7.7%, driven by transactions that climbed 5.4%. Company-operated shops were even better performers, as same-store sales and transactions grew 9.7% and 7.6%, respectively. Management noted that this marked Dutch Bros' 19th consecutive year of positive same-store sales growth.

Perhaps most telling is Dutch Bros' unit-level economics, which closed out 2025 among the best in the industry. The company delivered average unit volume (AUV) -- or average sales per location -- that climbed to a new record of $2.1 million last year. For context, Starbucks and privately held Dunkin Brands generated AUV of $1.8 million and $1.4 million, respectively, according to market research company Circana. By this measure, Dutch Bros is outperforming its larger rivals.

The coffee purveyor's ability to generate consistent foot traffic and results goes to the heart of the company's measured growth strategy. Dutch Bros currently has 1,136 locations and plans to add 181 more in 2026, in service of its goal to hit 2,029 locations by 2029. Consistent performance and gradual growth are a winning combination for Dutch Bros' future.

Management is guiding for revenue of $2 billion in 2026, which would represent 25% growth, roughly in line with Wall Street's forecast.

Thus far, Dutch Bros has stuck to its tried-and-true formula of drive-thru lanes, but the company is also testing walk-up locations and piloting limited breakfast offerings. The walk-up location in downtown Los Angeles was an instant hit, delivering order-ahead transactions at three times the systemwide average.

To buy or not to buy?

Dutch Bros is richly priced at 74 times earnings, but the company's rapid growth skews the most commonly used valuation metrics. However, the stock has a price/earnings-to-growth (PEG) ratio of 0.87, when any number less than 1 is the benchmark of an undervalued stock.

The company's robust growth, consistent performance, and measured expansion suggest Dutch Bros has a long runway for growth ahead. Moreover, I believe investors who buy the stock now will be very happy they did three to five years from now.

Danny Vena, CPA has positions in Dutch Bros and Starbucks. The Motley Fool has positions in and recommends Dutch Bros and Starbucks. The Motley Fool has a disclosure policy.