Dutch Bros' 7,000-Unit Growth Path: Is the Model Positioned to Scale?

Dutch Bros Inc. BROS exited 2025 with increased visibility into its long-term development framework, as management reiterated a 7,000-shop total addressable market (TAM) and closed the year with 1,136 system locations across 25 states. With system-wide average unit volumes (AUVs) reaching record levels and development execution remaining consistent, the company is positioning unit expansion as the primary engine of long-term scale.

Management emphasized that the 7,000-unit TAM is grounded in the existing drive-thru model, which continues to underpin Dutch Bros’ unit economics. At the same time, the company is selectively testing format flexibility. In the fourth quarter, Dutch Bros opened its first dense urban, non-drive-thru walk-up location in Downtown Los Angeles. Since opening in late November, management said the shop has been the top-performing location in the system, with order-ahead mix running more than three times the system average. While results were described as early, management framed the location as a data point for how digital ordering capabilities may support operations in higher-density corridors where traditional drive-thru development is more difficult.

Execution capacity has also scaled alongside the footprint. Dutch Bros ended 2025 with approximately 475 regional operator candidates, nearly double the level at the end of 2022. Management noted that shop approvals accelerated meaningfully during the year, improving line of sight toward its stated objective of reaching 2,029 shops by 2029. Management stated that the company continues to underwrite new units at approximately $1.8 million in capital investment per shop, reflecting consistency in development assumptions and underwriting standards.

Looking ahead, Dutch Bros’ long-term expansion thesis remains anchored in unit growth rather than near-term format transformation. A deeper operator pipeline, improved development visibility and early — still exploratory — insights from alternative formats collectively define the framework supporting the company’s reiterated 7,000-unit opportunity.

BROS’ Price Performance, Valuation & Estimates

Shares of Dutch Bros have declined 35.4% in the past year compared with the industry’s fall of 5.2%. In the same time frame, other industry players like Starbucks Corporation SBUX and Chipotle Mexican Grill, Inc. CMG have declined 17.3% and 30.2%, respectively.

BROS’ One-Year Price Performance

From a valuation standpoint, BROS trades at a forward price-to-sales (P/S) multiple of 3.71, below the industry’s average of 3.79. Conversely, industry players, such as Starbucks and Chipotle, have P/S multiples of 2.75 and 3.63, respectively.

BROS’ P/S Ratio (Forward 12-Month) vs. Industry

The Zacks Consensus Estimate for BROS’ 2026 earnings per share has increased in the past 30 days.

EPS Trend of BROS Stock

The company is likely to report strong earnings, with projections indicating a 19.7% rise in 2026. Conversely, industry players like Chipotle are likely to witness a decline of 2.6%, year over year, in 2026 earnings. Meanwhile, Starbucks' fiscal 2026 earnings are likely to witness a rise of 8.5%, year over year.

BROS stock currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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