Should You Invest in Dutch Bros (BROS)?
Currently trading at $58.89, they have a P/E Ratio of 201.03, which is exceptionally high, meaning investors are paying $201.03 for every $1 of the company’s earnings. This means investors are willing to pay a premium for each dollar of current earnings. In comparison, their competitor, $SBUX, has a P/E Ratio of 28.15.
However, this doesn’t mean the company is a bad pick. They are expanding at a large rate and their customer base is growing. I personally believe they are the better coffee brand out there. They have a high ratio but that is become their expected earnings justify it. If they can’t maintain this momentum, it could lead to drop in share price.
The company has seen an increase in revenue by 30.53% compared to their competitor Starbucks which went up by only 0.56% in 2024. The company reported earnings per share (EPS) of $0.32 over the last 12 months, their profit hit $0.090B, a 19.77% increase year-over-year. While the company’s gross margin is healthy at 26.11%, operating and profit margins are lower at 8.93%. This could suggest that operational costs might be effecting their profitability.
I do not see this as a problem because, as you see below, they have increased in revenue the last few years. This leads me to believe the company will continue to do good and settle out. Right now they are focusing on expansion and franchising which is leading to their ratios being high as they are.
- – 2024 was $1.192B, a 30.53% increase.
- – 2023 was $0.966B, a 30.68% increase from 2022.
- – 2022 was $0.739B, a 48.43% increase from 2021.
- – 2021 was $0.498B, a 52.06% increase from 2020.
My Thoughts:
I believe $BROS is a good buy and will continue to do well.
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