Dutch Bros Inc. (BROS): A Bull Case Theory

We came across a bullish thesis on Dutch Bros Inc. on The Bagger Radar’s Substack by Joshua. In this article, we will summarize the bulls’ thesis on BROS. Dutch Bros Inc.'s share was trading at $65.98 as of September 5th. BROS’s trailing and forward P/E were 143.43 and 74.07 respectively according to Yahoo Finance.

Dutch Bros (BROS), founded in 1992 from a single coffee stand, now operates nearly 1,000 drive-thru shops across 18 U.S. states, offering customizable drinks, rapid service (~2 minutes per order), and a highly engaging customer experience that resonates strongly with Gen Z. The company achieved $966 million in revenue in 2023, up 30.7% year-over-year, and reached net profitability in 2024 with $66.5 million in net income. Free cash flow turned positive in 2025, signaling a shift from hyper-growth to profitable growth, fundamentally changing the investment narrative.

Dutch Bros’ competitive moat is rooted in its dominance of the drive-thru channel, a cult-like loyalty program (50–70% of sales via Dutch Rewards, 71% of transactions through the app), and a unique “people-first” culture that fosters brand attachment and customer stickiness. The company sees significant expansion potential, with its current 1,000 stores representing just 14% of the U.S. opportunity, implying a 7,000-store addressable market and a concrete milestone of 2,029 locations by 2029. Each new store ramps quickly to profitability, leveraging standardized operations and scalable training, unlocking meaningful economies of scale.

Leadership combines founder Travis Boersma’s vision with seasoned executives from Starbucks and Yum! Brands, and insiders own ~42% of the company, aligning incentives with shareholders. While the stock trades at a rich ~130x forward earnings, analysts project EPS growth of ~39% in 2025, supported by a 23% revenue CAGR and margin expansion toward 11%, potentially driving the stock toward $98 by 2027. Risks include inflation pressures, potential market saturation, and execution risk, but Dutch Bros’ loyal customer base, flexible growth model, and strong balance sheet provide downside protection. Overall, BROS represents a high-potential, scalable, and culturally differentiated growth story reminiscent of Chipotle’s early trajectory, with substantial upside for patient investors.

Previously we covered a bullish thesis on Dutch Bros Inc. (BROS) by Kostadin Ristovski, ACCA in September 2024, which highlighted rapid location growth, drive-thru dominance, and potential margin expansion, positioning the stock as undervalued. The company's stock price has appreciated approximately by 94% since our coverage. The thesis still stands as BROS scales profitably. Joshua shares a similar perspective but emphasizes free cash flow, profitability, and a detailed expansion runway.

Dutch Bros Inc. is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 47 hedge fund portfolios held BROS at the end of the first quarter which was 41 in the previous quarter. While we acknowledge the potential of BROS as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock.

Disclosure: None.