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Should you bet on a fast-growing coffee chain or a century-old candy titan? Choosing between Dutch Bros (BROS -0.62%) and Hershey(HSY -3.42%) requires balancing aggressive expansion against defensive stability.

Dutch Bros is a beverage specialist known for its drive-thru speed and custom energy drinks. Hershey is a global snacking leader with deep retail penetration. Both compete for consumer dollars in the discretionary and staple categories, making them a compelling comparison for growth-oriented and value-focused investors.

The case for Dutch BrosDutch Bros operates a rapidly growing network of drive-thru shops focused on hand-crafted coffee, teas, and its proprietary Rebel energy drinks. The company relies on a mix of company-operated locations and franchise partners to scale its brand across the United States. As of mid-2026, the company operated over 1,200 locations across 25 states.

In FY 2025, revenue reached nearly $1.6 billion, representing a significant growth rate of approximately 27.9% compared to the previous year. This expansion helped the company report a net income of roughly $79.8 million. As the company scales within the broader landscape of retail stocks, its ability to maintain this upward trajectory is a key part of the bullish thesis.

$41.49-$0.26 (-0.62%)

NYSE · As of 4:00 PM ET 10/23/26

The case for HersheyHershey is a titan in the global snacking industry, managing a massive portfolio that includes Reese's, Twizzlers, and SkinnyPop. The company sells its products through wholesale distributors, grocery chains, and convenience stores worldwide. Its largest customer is McLane Co., which accounted for nearly 27% of consolidated net sales in 2025. This customer concentration adds a layer of risk to the business, though Hershey's brand power remains its primary competitive advantage.

In FY 2025, revenue reached approximately $11.7 billion, a 4.4% increase over the previous year. However, the company reported a net income of about $883.3 million, which was a sharp decline from the $2.2 billion earned in 2024. This contraction was largely due to rising costs for raw materials and integration efforts for new acquisitions.

HSY Hershey$169.64-$6.00 (-3.42%)

NYSE · As of 4:00 PM ET 10/23/26

Risk profile comparisonDutch Bros faces significant risks from its aggressive expansion strategy and potential execution issues as it enters unfamiliar markets. Supply chain concentration is a primary concern, as the company relies on a limited number of co-packers for its proprietary beverages. It is also vulnerable to price changes for coffee and dairy, along with potential regulatory restrictions on drive-thru concepts. Furthermore, the company must manage rising labor costs and the integration of recent real estate acquisitions.

Hershey faces risks related to the high price volatility of key commodities like cocoa, sugar, and dairy. The heavy reliance on McLane creates a significant revenue concentration risk if that relationship were to change. The company also deals with intense competition in the snacking industry and must navigate environmental regulations like the EU Deforestation Regulation. Additionally, Hershey must successfully integrate recent acquisitions, such as LesserEvil, to realize their full value.

Valuation comparisonHershey offers a more traditional value profile, while Dutch Bros commands a significant premium due to its rapid revenue growth.

MetricDutch BrosHersheyForward P/E58.4x29.1xP/S ratio4.3x4.3xWhich stock would I buy in 2026?While both companies are in the consumer goods space, they differ in the stages of their business operations. Dutch Bros is expanding aggressively, opening 48 new stores in the second quarter of 2026 alone. It isn't in every state yet so that it could have plenty of room for future expansion. In comparison, you can walk into almost any convenience store or grocery store across the United States, and you can find multiple different types of candy made by Hershey.
I do like Dutch Bros as an investment, and I still think it could have a spot in a portfolio as a high-growth stock worthy of a small, speculative stake. That said, between the two companies, I would rather own Hershey. The main reason is that, given the general uncertainty in the markets, I'd rather own a more mature company that generates hundreds of millions or billions of dollars in net income; Hershey generated $883.3 million in net income in 2025, while Dutch Bros generated less than $80 million.

Hershey is also able to pass on its earnings as dividends, which yield 3.4%, while Dutch Bros does not offer a dividend. Also, while the Hershey stock price is down 5.4% over the past 12 months, Dutch Bros' shares have dropped 27.1%. Hershey may be in a more defensive position, but with all the uncertainty swirling around, that currently gives it an edge over Dutch Bros as an investment.

One way to measure the expensiveness or cheapness of a stock is to compare price-to-earnings (P/E) ratios. However, a lower multiple in comparison to other stocks doesn't automatically mean a stock's a buying opportunity. Nor should you necessarily avoid those with a higher multiple.

A higher P/E ratio does mean that investors have higher growth expectations. That's not a bad thing, and if a company can meet or exceed them, you can make money.

Dutch Bros (BROS +2.24%) trades at a P/E ratio of 58. That's more than double the S&P 500 index's P/E ratio of 26. Should Dutch Bros' relatively high multiple turn off investors?

Image source: Getty Images.

When working to answer the question, it's important to look at the company's P/E ratio in historical context. Dutch Bros' shares had an earnings multiple of 100 at the start of the year, and it rose to about 110 in late June. Over the long term, the stock has a three-year median P/E ratio of 141.

Until recently, investors certainly had high growth expectations, and the stock outperformed the market. The shares gained 64.5% for the three years ended on Oct. 16, trailing the S&P 500's 84.5% total return.

$43.82+$0.96 (+2.24%)

NYSE · As of 4:00 PM ET 10/20/26

The company's drive-through locations offer coffee, energy drinks, and other beverages (e.g., tea, lemonade, smoothies, and soda). Some locations also offer limited food options. That sounds like an ultra-competitive business, but the company differentiates itself through speed, quality, and customer service.

Dutch Bros appears to have struck a chord with customers, and it continues to grow sales and add locations (48 in the June quarter). Second-quarter same-store sales grew 5.8%, with higher traffic contributing 1.7 percentage points. That made it 13 straight quarters of comps growth.

A P/E ratio of over 100 certainly seems like an inflated valuation. I wouldn't call Dutch Bros a value stock, but its current multiple is much more reasonable.

I wouldn't stay away from the shares based on the current P/E ratio. Given the growth opportunity, long-term investors should strongly consider the stock.

The beverage market is shifting as consumers move away from traditional sodas toward customized coffee and functional energy drinks. Deciding between Dutch Bros (BROS +2.24%) and Celsius (CELH +0.81%) is a popular choice for growth investors.

Dutch Bros operates drive-thru shops known for personalized service and variety, while Celsius produces fitness-focused energy drinks sold through major retailers. Both companies tap into high-growth niches within the broader market, yet they follow very different business models. This comparison examines their financial health, expansion risks, and current valuations to help you decide which fits your strategy.

The case for Dutch BrosDutch Bros sells hand-crafted hot and cold beverages, including specialized coffee, tea, and soda. Its signature Rebel energy drink is a core part of the menu, helping it compete effectively among beverage stocks. As of mid-2026, the company operated 1,225 locations across 26 states. It focuses on a drive-thru model that prioritizes speed and customer connection in the quick-service beverage market. The company utilizes third-party partnerships with Portland Bottling Co. and Lieb Foods, LLC for its proprietary product blending and packaging.

In its latest annual report, filed for FY 2025, Dutch Bros generated revenue of $1.64 billion, representing growth of roughly 27.9% compared to the previous year. This expansion helped the company achieve net income of approximately $79.8 million, up from roughly $35.3 million in the prior year. The improvement in net margin to nearly 4.9% indicates a trend toward higher profitability as the shop network matures.

As of its December 2025 balance sheet, the debt-to-equity ratio (including leases) is approximately 1.6x, indicating total debt levels compared to shareholder equity. The current ratio is roughly 1.5x, a metric indicating the company has enough short-term assets to cover its immediate liabilities. Free cash flow for the year totaled nearly $54.4 million, calculated by subtracting capital expenditures from cash flow from operations.

The case for CelsiusCelsius markets functional energy drinks designed to appeal to health-conscious consumers. Its products are distributed primarily through Pepsi (PEP +0.34%), which acts as the lead partner in the United States and Canada. Customer concentration like this adds a layer of risk to the business, as Pepsi accounted for over 43% of 2025 net revenue. The brand also sells through major platforms like Amazon (AMZN +0.07%) and Walmart (WMT -0.72%). Internationally, the brand reaches consumers in the United Kingdom and Australia through agreements with the Suntory Group.

In its latest annual report, filed for FY 2025, Celsius reported revenue of roughly $2.5 billion, which represents an increase of nearly 85.5% over the previous period. Despite this massive top-line growth, net income for the year was approximately $108.0 million, indicating a net margin of roughly 4.3%. This is a decrease from the previous year, as the company integrated major acquisitions to expand its portfolio.

As of its December 2025 balance sheet, the debt-to-equity ratio is approximately 0.2x, indicating a low level of total debt relative to shareholder equity. The current ratio is roughly 1.7x, providing a healthy buffer for meeting short-term financial commitments. Free cash flow for the year reached nearly $323.4 million, representing the cash remaining after the business pays for its operational infrastructure and capital needs.

Risk profile comparisonDutch Bros faces intense competition from national chains like Starbucks (SBUX +1.53%) and other regional coffee retailers. The company deals with geographic concentration, as approximately 65% of its shops are located in the Western United States, making it susceptible to regional economic or weather-related disruptions. It also maintains a supply chain dependency on select partners for coffee and dairy production, where failures by key co-packers could disrupt profitability.

Celsius faces significant risk due to its heavy reliance on Pepsi for distribution and category management decisions. The company also faces operational integration challenges following major acquisitions, which may lead to brand cannibalization or unknown legacy liabilities. Competitive pressures in the functional beverage category remain high from larger entities like Monster Beverage (MNST +0.51%), Coca-Cola (KO +0.07%), and Keurig Dr Pepper (KDP +0.49%).

Image source: The Motley Fool.

Valuation comparisonCelsius appears cheaper than Dutch Bros when comparing Forward P/E using future earnings estimates and the P/S ratio using sales over the past twelve months.

MetricDutch BrosCelsiusForward P/E44.7x20.7xP/S ratio4.3x2.5xPEG ratio1.21.3Valuation metrics include sourcing from Financial Modeling Prep (FMP) and may differ from other data providers.

Both of these stocks have been on my shortlist of growth stock ideas for a couple of years. Any company in the business of feeding me caffeine has my attention. What if I can only pick one, though?

Dutch Bros trades at price-to-sales and forward P/E ratios well above Celsius. But the price premium disappears when you factor in growth expectations. For the PEG ratio, both stocks look reasonably valued and Dutch Bros comes out slightly ahead.

Mind you, the PEG ratio focuses on profits, not sales. With Pepsi's distribution assistance, Celsius' revenue grew 122% over the last two years, while Dutch Bros lagged behind at 58%.

But the story changes when you look at the bottom line. Celsius' earnings are plunging while Dutch Bros is growing more and more profitable:

BROS EPS Diluted (TTM) data by YCharts

So you could bet on Celsius' empty revenue calories, but I prefer Dutch Bros' more nutritious blend of respectable top-line growth and rising profits.

Excuse me, it’s time for another coffee run.

Dutch Bros (BROS +4.13%) is one of the hottest, fastest-growing restaurant chains in the U.S. Although it calls itself a coffee shop chain, it's better known for its sugary beverage concoctions, such as its recent "Creepy Crawler" seasonal drink, which includes gummy worms, and its Rebel energy line.

Although it's growing fast, Dutch Bros stock is down 33% year-to-date. Is that likely to change when it reports earnings on Nov. 4?

Launching across the country Dutch Bros has 1,225 stores as of the end of the third quarter, and it's aiming for at least 185 new openings in 2026. It has a short-term goal of reaching 2,029 stores by 2029 and a long-term goal of getting to 7,000 stores.

Image source: Dutch Bros.

Total sales increased 32% year over year in the second quarter. While much of that was driven by the 48 new store openings in the quarter, the company has also been reporting solid same-store sales growth. It's been positive for the past 13 quarters, and transaction growth has been positive for the past eight quarters, which is important because it means that the growth isn't only coming from higher prices. That implies that more people are coming into stores or coming in more frequently, both of which bode well for the company's future. In the second quarter, same-shop sales increased 5.8% over last year, with transactions up 1.7%.

The market wasn't impressed with that 1.7% number, although company-operated same-shop transactions increased 3.4%. The company originally had a franchise option, but it's only opening company-owned stores at this point. Part of Dutch Bros' success comes from its rigorous standards throughout its portfolio, which it can better manage in its owned stores.

What to expect on Nov. 4 Other reasons Dutch Bros stock is down include its high valuation and worries about its ability to meet its expansion goals. Even at the current P/E ratio of 58, it's not cheap, which is why seemingly small issues can generate a negative market reaction. And in August, it disclosed that it would not be raising its bid on a small chain of salad stores that would have added 65 new stores to its total in one shot.

$42.86+$1.70 (+4.13%)

NYSE · As of 4:00 PM ET 10/19/26

Given the stock's disappointing performance so far this year, the third-quarter report could be a high-stakes moment. If it beats Wall Street's expectations of 29.4% sales growth and $0.24 in earnings per share (EPS) and has any other promising news, the stock could easily rise, closing the gap between performance and the stock price. If not, the stock could fall further, although some of the negativity is already priced in.

Management raised full-year guidance from about $2 billion in sales and 5% same-store sales growth at the midpoint to $2.1 billion in sales and 5.5% same-store sales growth at the midpoint, but that wasn't enough to keep the stock from dropping. It may play a more significant role in the third-quarter report if everything else goes well.

Over the long term, Dutch Bros has strong potential as it keeps opening new stores and bringing in more customers.

Dutch Bros (BROS +0.15%) has seen its name recognition grow over the years. Credit goes to the success of its small-format and drive-through locations. In addition to coffee, it sells a long list of customizable drinks. The company's customer service is a big draw.

It's not easy to establish a solid position in the retail coffee industry. However, Dutch Bros has successfully carved out a niche in the market.

While the business is a success, the coffee stock has been wildly volatile. It currently trades 52% below its record high (as of Oct. 15).

Investors should listen to the bulls and the bears. Here's one reason to buy shares and one reason to pause.

Image source: Getty Images.

Reason to buy: Projected store growth offers exciting possibilities
The main reason investors should consider buying the stock is its growth trajectory. As of June 30, there were 1,225 Dutch Bros locations in total. That's up 17% from 12 months ago. Management believes that it has a total addressable market of 7,000 stores. That would be almost six times larger than the current footprint.

The coffee chain has a strong presence in the western and southern parts of the U.S. That still leaves plenty of expansionary runway across the country. In May, for instance, the first Dutch Bros location opened in the Chicago area. New stores, of course, support higher revenue over time.

But each shop is also becoming more productive. Dutch Bros reported same-store sales growth in the last 13 straight quarters. That's a promising indicator at a time when the macroeconomic environment has pressured consumer confidence.

Analysts project the top line will rise 97% from 2025 to 2028. With the stock significantly off its highs, robust growth can be a tailwind for investors.

$41.16+$0.06 (+0.15%)

NYSE · As of 4:00 PM ET 10/16/26

Reason to pause: The retail coffee market is crowded
This industry is extremely competitive. Barriers to entry are low, opening up the door to new rivals. And customers have no switching costs; they can spend their money wherever they please with each transaction.

So, it's valid to question if Dutch Bros has a durable moat. Its brand is becoming more well-known, to be fair. Does this drive loyalty over time, though? That's hard to say.

The challenging industry backdrop might give investors pause. There is competition all over the place. Large chains like Starbucks, McDonald's, and Dunkin' have massive footprints that support their scale advantages. Dutch Bros can't go toe-to-toe with them when securing favorable real estate, marketing efforts, or procuring coffee and other key inputs.

There is also pressure coming from direct competitors. Smaller players like 7 Brew and Biggby Coffee operate with similar strategies. Customers can easily start to favor them if they pop up nearby.

Dutch Bros' growth has been impressive, but the company's future success is far from guaranteed.

Neil Patel has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Dutch Bros and Starbucks. The Motley Fool recommends the following options: long January 2028 $320 calls on McDonald's and short January 2028 $340 calls on McDonald's. The Motley Fool has a disclosure policy.

Investors looking for stocks in the Retail - Restaurants sector might want to consider either Aramark (ARMK - Free Report) or Dutch Bros (BROS - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.

We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great grade in the Value category of our Style Scores system. The proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Aramark has a Zacks Rank of #2 (Buy), while Dutch Bros has a Zacks Rank of #3 (Hold) right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that ARMK has an improving earnings outlook. But this is only part of the picture for value investors.

Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether a company is undervalued at its current share price levels.

The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.

ARMK currently has a forward P/E ratio of 19.88, while BROS has a forward P/E of 41.99. We also note that ARMK has a PEG ratio of 0.79. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. BROS currently has a PEG ratio of 1.30.

Another notable valuation metric for ARMK is its P/B ratio of 4.26. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, BROS has a P/B of 7.36.

These metrics, and several others, help ARMK earn a Value grade of B, while BROS has been given a Value grade of D.

ARMK stands above BROS thanks to its solid earnings outlook, and based on these valuation figures, we also feel that ARMK is the superior value option right now.

Dutch Bros (BROS - Free Report) closed the most recent trading day at $37.98, moving +1.88% from the previous trading session. The stock's change was more than the S&P 500's daily loss of 0.02%. Meanwhile, the Dow experienced a drop of 0.35%, and the technology-dominated Nasdaq saw a decrease of 0.15%.

Shares of the drive-thru coffee chain operator and franchisor have depreciated by 15.37% over the course of the past month, underperforming the Retail-Wholesale sector's gain of 0.63%, and the S&P 500's gain of 2.05%.

Analysts and investors alike will be keeping a close eye on the performance of Dutch Bros in its upcoming earnings disclosure. The company's upcoming EPS is projected at $0.24, signifying a 26.32% increase compared to the same quarter of the previous year. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $550.38 million, up 29.94% from the year-ago period.

For the annual period, the Zacks Consensus Estimates anticipate earnings of $0.98 per share and a revenue of $2.14 billion, signifying shifts of +28.95% and +30.44%, respectively, from the last year.

It is also important to note the recent changes to analyst estimates for Dutch Bros. These latest adjustments often mirror the shifting dynamics of short-term business patterns. Consequently, upward revisions in estimates express analysts' positivity towards the business operations and its ability to generate profits.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has moved 0.86% higher. Right now, Dutch Bros possesses a Zacks Rank of #3 (Hold).

In terms of valuation, Dutch Bros is presently being traded at a Forward P/E ratio of 38.08. This valuation marks a premium compared to its industry average Forward P/E of 19.81.

One should further note that BROS currently holds a PEG ratio of 1.18. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Retail - Restaurants was holding an average PEG ratio of 1.77 at yesterday's closing price.

The Retail - Restaurants industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 160, putting it in the bottom 35% of all 250+ industries.

The strength of our individual industry groups is measured by the Zacks Industry Rank, which is calculated based on the average Zacks Rank of the individual stocks within these groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to use Zacks.com to monitor all these stock-influencing metrics, and more, throughout the forthcoming trading sessions.

With artificial intelligence (AI) stocks all the rage, growth stories in other parts of the market are often getting overlooked. That certainly appears to be the case with Dutch Bros (BROS -2.02%), as the coffee shop operator has one of the best long-term growth stories in the consumer space, yet the stock has struggled this year. However, it appears to have significant upside in the coming years. With $10,000, you could buy about 260 shares.

Dutch Bros is riding the sweet coffee drink craze made popular by Starbucks (SBUX +1.69%), while adding its own twist with its popular Rebel energy drinks. The concept is popular, as evidenced by strong same-store sales, which rose an impressive 8.3% for company-operated shops in the second quarter. It has also seen a lift by adding hot food items to its shops, which can support it.

Image source: The Motley Fool.

More than anything, though, Dutch Bros is a powerful expansion story. It ended the June quarter with 1,225 locations, of which 888 were company-owned. It plans to open at least 185 new locations this year and have more than 2,000 total shops by 2029. Its long-term goal is to operate around 7,000 shops in the U.S.

The nice thing about Dutch Bros' expansion is that it is happening at a quick but measured pace. Its shops tend to have small footprints with no indoor seating, and serve customers through two drive-thru lanes. This makes them relatively cheap to build out, although they generate strong sales, with average unit volumes (AUVs) and impressive $2.2 million. This allows the company to achieve quick payback periods on its investments and increase its store count using only its operating cash flow.

The company has also notably shown discipline while expanding. For example, in 2024, it decided to redefine its real estate plan, and it recently bowed out of a bidding war for the real estate of bankrupt Salad and Go, letting rival 7 Brew purchase the assets. While the market may not appreciate it, these are the types of decisions that lead to long-term sustainable success in the restaurant industry.

Through a combination of unit expansion and same-store sales growth, Dutch Bros is set to see a massive increase in sales in the coming years. Meanwhile, scale should eventually lead to robust earnings.

Analysts currently project that the company will grow its revenue to $8.5 billion in 2035 from just over $2.1 billion this year. Estimates range from $7.9 billion to $9.1 billion. Meanwhile, the lone analyst earnings per share (EPS) estimate for 2035 is $4.35. Assuming another 10% revenue growth in 2026 and 20% EPS growth, the company would produce $5.22 in EPS in 2036 on revenue of $9.4 billion.

When looking at potential future valuations, we can turn to rival Starbucks, which trades at 2.8 times fiscal 2027 (ending November 2027) sales and 30 times EPS. Starbucks has notably been working to restore margins.

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If we apply a forward price-to-sales (P/S) multiple of 2.8 times on $9.4 billion in 2036 sales, Dutch Bros stock would have a $26.3 billion market cap, or a $150 stock price. That's nearly 4x upside for its current levels. Apply a 30-times forward P/E multiple, and the stock would be worth a similar $157. That would make a 260-share investment worth between $39,000 and $40,800.

That's some massive potential upside, which makes this growth stock a long-term buy. The biggest risks to the company achieving this long-term price target would be the concept becoming less popular or there being just too much competition in the space, from the likes of 7 Brew and other similar concepts, that stall growth. While the stock has huge potential, it still has to prove it can become the next Starbucks and that it won't be the next Krispy Kreme.

Dutch Bros Inc. (NYSE:BROS – Get Free Report)’s stock price hit a new 52-week low during trading on Monday. The stock traded as low as $37.33 and last traded at $37.2380, with a volume of 164,460 shares traded. The stock had previously closed at $38.05.

Analyst Upgrades and Downgrades A number of equities research analysts recently weighed in on BROS shares. Oppenheimer restated a “positive” rating on shares of Dutch Bros in a report on Wednesday, September 30th. Weiss Ratings raised Dutch Bros from a “hold (c)” rating to a “hold (c+)” rating in a report on Thursday. Morgan Stanley lifted their price objective on Dutch Bros from $87.00 to $88.00 and gave the stock an “overweight” rating in a report on Wednesday, July 15th. Robert W. Baird decreased their target price on Dutch Bros from $82.00 to $60.00 and set an “outperform” rating on the stock in a research report on Friday, October 2nd. Finally, Stephens reissued an “overweight” rating and issued a $80.00 target price on shares of Dutch Bros in a report on Thursday, August 6th. One investment analyst has rated the stock with a Strong Buy rating, twenty-one have given a Buy rating and four have given a Hold rating to the stock. Based on data from MarketBeat, Dutch Bros currently has a consensus rating of “Moderate Buy” and an average target price of $71.88.

Read Our Latest Analysis on BROS

Dutch Bros Stock Down 2.5% The company has a debt-to-equity ratio of 0.20, a current ratio of 1.35 and a quick ratio of 1.19. The firm has a market capitalization of $6.48 billion, a price-to-earnings ratio of 51.48, a price-to-earnings-growth ratio of 1.35 and a beta of 2.31. The firm’s 50-day moving average price is $46.11 and its 200 day moving average price is $54.59. Dutch Bros (NYSE:BROS – Get Free Report) last posted its earnings results on Wednesday, August 5th. The company reported $0.33 earnings per share (EPS) for the quarter, beating analysts’ consensus estimates of $0.29 by $0.04. The firm had revenue of $550.85 million for the quarter, compared to analyst estimates of $525.38 million. Dutch Bros had a return on equity of 10.01% and a net margin of 4.91%. Dutch Bros’s revenue was up 32.5% on a year-over-year basis. During the same quarter in the prior year, the company earned $0.26 EPS. Sell-side analysts expect that Dutch Bros Inc. will post 0.88 EPS for the current year.

Insider Buying and Selling at Dutch Bros In related news, Director Todd Penegor purchased 2,000 shares of the business’s stock in a transaction dated Thursday, August 13th. The stock was bought at an average cost of $51.56 per share, with a total value of $103,120.00. Following the completion of the acquisition, the director directly owned 7,358 shares in the company, valued at $379,378.48. The trade was a 37.33% increase in their position. The acquisition was disclosed in a document filed with the Securities & Exchange Commission, which is available through this hyperlink. 38.90% of the stock is currently owned by company insiders.

Institutional Trading of Dutch Bros Hedge funds and other institutional investors have recently bought and sold shares of the company. Wellington Management Group LLP boosted its holdings in Dutch Bros by 38.0% in the second quarter. Wellington Management Group LLP now owns 3,090,882 shares of the company’s stock valued at $221,956,000 after acquiring an additional 851,075 shares during the last quarter. Bank of America Corp DE grew its position in Dutch Bros by 33.4% during the first quarter. Bank of America Corp DE now owns 1,814,815 shares of the company’s stock valued at $91,939,000 after acquiring an additional 454,036 shares during the period. Dimensional Fund Advisors LP grew its position in Dutch Bros by 3.2% during the first quarter. Dimensional Fund Advisors LP now owns 1,204,326 shares of the company’s stock valued at $60,994,000 after acquiring an additional 37,683 shares during the period. Bank of New York Mellon Corp increased its stake in Dutch Bros by 58.1% during the first quarter. Bank of New York Mellon Corp now owns 1,044,545 shares of the company’s stock worth $52,917,000 after acquiring an additional 384,011 shares during the last quarter. Finally, Wasatch Advisors LP increased its stake in Dutch Bros by 17.8% during the second quarter. Wasatch Advisors LP now owns 1,038,903 shares of the company’s stock worth $74,604,000 after acquiring an additional 157,098 shares during the last quarter. 85.54% of the stock is owned by hedge funds and other institutional investors.

Dutch Bros Company Profile (Get Free Report)

Dutch Bros Inc is a drive-thru beverage company that operates the Dutch Bros coffeehouse brand. The company serves a broad menu of handcrafted beverages, including specialty coffees, cold brews, teas, energy drinks, lemonades, smoothies and flavored sodas, along with a selection of snacks and other food items.

Dutch Bros was founded in 1992 by brothers Dane and Travis Boersma in Grants Pass, Oregon. From its original pushcart operation, the company developed a drive-thru-focused model built around convenience, customized drinks and customer service.

Read More Five stocks we like better than Dutch Bros 3 REITs That May Win in a Higher Interest Rate Environment Broadcom’s Anthropic Bet Gets Bigger as $60 Billion Financing Raises the Stakes Insider Buying Signals Opportunity in H.B. Fuller, FocalTherics, Cardinal 5 Retail Picks to Watch as the Holiday Shopping Season Nears Receive News & Ratings for Dutch Bros Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Dutch Bros and related companies with MarketBeat.com's FREE daily email newsletter.

Ark Restaurants (NASDAQ:ARKR – Get Free Report) and Dutch Bros (NYSE:BROS – Get Free Report) are both consumer discretionary companies, but which is the superior investment? We will contrast the two businesses based on the strength of their risk, institutional ownership, analyst recommendations, earnings, profitability, valuation and dividends.

Profitability This table compares Ark Restaurants and Dutch Bros’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets Ark Restaurants -2.04% -10.61% -2.58% Dutch Bros 4.91% 10.01% 2.95% Analyst Recommendations This is a summary of current ratings and target prices for Ark Restaurants and Dutch Bros, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score Ark Restaurants 1 0 0 0 1.00 Dutch Bros 0 4 21 1 2.88 Dutch Bros has a consensus target price of $71.88, suggesting a potential upside of 89.15%. Given Dutch Bros’ stronger consensus rating and higher probable upside, analysts plainly believe Dutch Bros is more favorable than Ark Restaurants. Volatility and Risk Ark Restaurants has a beta of 0.37, indicating that its stock price is 63% less volatile than the S&P 500. Comparatively, Dutch Bros has a beta of 2.31, indicating that its stock price is 131% more volatile than the S&P 500.

Insider and Institutional Ownership 32.0% of Ark Restaurants shares are owned by institutional investors. Comparatively, 85.5% of Dutch Bros shares are owned by institutional investors. 37.5% of Ark Restaurants shares are owned by company insiders. Comparatively, 38.9% of Dutch Bros shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Valuation and Earnings This table compares Ark Restaurants and Dutch Bros”s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio Ark Restaurants $165.75 million 0.10 -$11.47 million ($0.88) -5.08 Dutch Bros $1.64 billion 4.05 $79.84 million $0.72 52.78 Dutch Bros has higher revenue and earnings than Ark Restaurants. Ark Restaurants is trading at a lower price-to-earnings ratio than Dutch Bros, indicating that it is currently the more affordable of the two stocks.

Summary Dutch Bros beats Ark Restaurants on 15 of the 15 factors compared between the two stocks.

(Get Free Report)

Ark Restaurants Corp., through its subsidiaries, owns and operates restaurants and bars in the United States. It operates restaurants in New York City; Washington, D.C.; Las Vegas, Nevada; Atlantic City, New Jersey; Florida; and Alabama, as well as fast food concepts and catering operations. The company was incorporated in 1983 and is based in New York, New York.

About Dutch Bros (Get Free Report)

Dutch Bros Inc., together with its subsidiaries, operates and franchises drive-thru shops in the United States. The company operates through Company-Operated Shops and Franchising and Other segments. It serves through company-operated shops and online channels under Dutch Bros; Dutch Bros Coffee; Dutch Bros Rebel; Dutch Bros; and Blue Rebel brands. Dutch Bros Inc. was founded in 1992 and is headquartered in Grants Pass, Oregon.

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What are the Zacks Style Scores? Developed alongside the Zacks Rank, the Zacks Style Scores are a group of complementary indicators that help investors pick stocks with the best chances of beating the market over the next 30 days.

Each stock is assigned a rating of A, B, C, D, or F based on their value, growth, and momentum characteristics. Just like in school, an A is better than a B, a B is better than a C, and so on -- that means the better the score, the better chance the stock will outperform.

The Style Scores are broken down into four categories:

Value ScoreValue investors love finding good stocks at good prices, especially before the broader market catches on to a stock's true value. Utilizing ratios like P/E, PEG, Price/Sales, Price/Cash Flow, and many other multiples, the Value Style Score identifies the most attractive and most discounted stocks.

Growth ScoreGrowth investors are more concerned with a stock's future prospects, and the overall financial health and strength of a company. Thus, the Growth Style Score analyzes characteristics like projected and historic earnings, sales, and cash flow to find stocks that will see sustainable growth over time.

Momentum ScoreMomentum traders and investors live by the saying "the trend is your friend." This investing style is all about taking advantage of upward or downward trends in a stock's price or earnings outlook. Employing factors like one-week price change and the monthly percentage change in earnings estimates, the Momentum Style Score can indicate favorable times to build a position in high-momentum stocks.

VGM ScoreIf you like to use all three kinds of investing, then the VGM Score is for you. It's a combination of all Style Scores, and is an important indicator to use with the Zacks Rank. The VGM Score rates each stock on their shared weighted styles, narrowing down the companies with the most attractive value, best growth forecast, and most promising momentum.

How Style Scores Work with the Zacks Rank The Zacks Rank, which is a proprietary stock-rating model, employs earnings estimate revisions, or changes to a company's earnings expectations, to make building a winning portfolio easier.

It's highly successful, with #1 (Strong Buy) stocks producing an unmatched +23.86% average annual return since 1988. That's more than double the S&P 500. But because of the large number of stocks we rate, there are over 200 companies with a Strong Buy rank, plus another 600 with a #2 (Buy) rank, on any given day.

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As mentioned above, the Scores are designed to work with the Zacks Rank, so any change to a company's earnings outlook should be a deciding factor when picking which stocks to buy.

Here's an example: a stock with a #4 (Sell) or #5 (Strong Sell) rating, even one with Style Scores of A and B, still has a downward-trending earnings outlook, and a bigger chance its share price will decrease too.

Thus, the more stocks you own with a #1 or #2 Rank and Scores of A or B, the better.

Stock to Watch: Dutch Bros (BROS - Free Report) Dutch Bros Inc. operates and franchises drive-thru beverage shops focused on hand-crafted drinks served with speed and service. The company was founded in 1992 by brothers Dane and Travis Boersma in Grants Pass, OR. Dutch Bros is incorporated in Delaware and its principal executive offices are in Tempe, AZ. It operates roasting, packing, warehouse and administrative facilities centered in Grants Pass, OR, and a roasting and packing facility in Melissa, TX.

BROS is a #3 (Hold) on the Zacks Rank, with a VGM Score of B.

Additionally, the company could be a top pick for growth investors. BROS has a Growth Style Score of A, forecasting year-over-year earnings growth of 29% for the current fiscal year.

One analyst revised their earnings estimate upwards in the last 60 days for fiscal 2026. The Zacks Consensus Estimate has increased $0.01 to $0.98 per share. BROS boasts an average earnings surprise of +23.9%.

With a solid Zacks Rank and top-tier Growth and VGM Style Scores, BROS should be on investors' short list.

Dutch Bros (BROS -2.25%) has gained traction in the highly competitive coffee business. Innovative beverages, an efficient drive-thru system, and a small real estate footprint are among the competitive advantages driving this company's rapid expansion.

Consequently, its qualities have driven its expansion. While it has not become a "cheap" stock, its attributes put a positive spotlight on the company, arguably making it an excellent time to buy the consumer discretionary stock.

Image source: The Motley Fool.

The Dutch Bros opportunity Admittedly, much of the opportunity in Dutch Bros stock stems from a drop in its price since July, which has taken it to its lowest level since late 2024. Growing pains and rising input costs appear to have weighed on the company's performance.

A company called 7 Brew Coffee outbid Dutch Bros to buy 65 former Salad and Go locations in the Southwest. Moreover, Dutch Bros raised capital expenditures (capex) by roughly $80 million to the $350 million to $370 million range. That increase occurred as sales growth slowed due to rising input and real estate costs.

Nonetheless, the company's robust expansion continues. As of June 30, it operated 1,225 locations, up from 1,043 one year ago. It also holds to its target of 2,029 locations by 2029 and a long-term goal of 7,000 U.S. locations. This is likely a critical part of Dutch Bros' growth story as it could follow Starbucks, whose regional-to-national (and later international) expansion has driven massive stock gains over that company's 34-year history.

Premium Feature

Moneyball Superscore

78/100

Today's Change

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The rising shop count is also helping Dutch Bros' growth, as its first-half 2026 revenue of $939 million increased 33% from year-ago levels. That included a 6.9% increase in same-shop sales growth during the period.

Indeed, rising input costs weighed slightly on earnings, though its net income of $54 million in the first two quarters of 2026 still rose 31% year over year.

Additionally, the 2026 revenue guidance of just above $2.1 billion implies a 40% yearly revenue growth rate. Also, with the recent pullback in the stock price, the P/E ratio has fallen to 55. The continued growth has also reduced the forward P/E ratio to 39, making the stock's valuation attractive as the company's rapid growth continues.

At current levels, investors should consider buying Dutch Bros stock.

While it may have looked like it was in the spotlight for the wrong reasons more recently, the good news about the huge growth driving Dutch Bros' expansion has not disappeared.

Moreover, with a declining valuation and a lower stock price, Dutch Bros looks increasingly like a generational buying opportunity to some investors. As Dutch Bros steadily works toward its goal of 7,000 shops, it appears set to make massive gains over the long term.

The combination builds on the storied history of two of the world's most recognizable entertainment companies, forming a single creative powerhouse. The combined company, Skydance, brings together two major film studios, two global streaming services, premier television assets including CBS, HBO, and Paramount's and WBD's cable networks, two of the industry's most recognized news networks, CBS News and CNN, and a leading content portfolio that includes live sports, a deep programming library and expansive collection of iconic brands and franchises. Together, Paramount and WBD will deliver enhanced output commitments, including a minimum of 30 high-quality theatrical films per year and 180+ television shows and series.   Skydance aims to build the next-generation global media and entertainment company powered by creativity and technology. We are creative-first, audience focused, tech-forward, globally scaled. Storytelling anchors the combined company's growth strategy – expanding opportunities for the world's leading creative talent and widening choice for consumers across every entertainment vertical.  Disciplined execution and an owner-operator model underpin the strategy, targeting at least $6 billion in run-rate synergies within three years. , /PRNewswire/ -- Skydance Corporation (f/k/a Paramount Skydance Corporation) (NYSE: SKYD) ("Paramount") today announced the completion of its acquisition of Warner Bros. Discovery, Inc. (NASDAQ: WBD) ("WBD"), creating a combined company, named "Skydance." The company brings together two major film studios, two global streaming services, a premier television portfolio including CBS, HBO, and Paramount's and WBD's cable networks, two of the industry's most recognized news networks, CBS News and CNN, and a portfolio of live sports including CBS Sports and TNT Sports, as well as a deep programming library and expansive collection of brands and franchises. The transaction closed following receipt of all required regulatory approvals under the merger agreement and satisfaction of other customary closing conditions. Skydance Class B shares will begin trading today on the New York Stock Exchange (NYSE) under the new ticker symbol "SKYD."

Under the terms of the agreement, WBD shareholders received an amount in cash equal to $31.01666668 per share. WBD shares have ceased trading on NASDAQ, effective today. 

The completed transaction unites two of media and entertainment's most storied companies, each with a history spanning more than a century, giving the combined business a rare legacy to build on. The aim of the combined company is to build the next-generation global media and entertainment company powered by creativity and technology.

Storytelling will drive the combined company's growth, bringing creative visions to life for audiences in more than 200 countries and territories and creating greater opportunities for workers across the entertainment industry. Skydance starts from a position of strength: the most diverse film and television library of any studio, the largest theatrical output in the industry, 200+ million streaming subscribers across platforms, an iconic broadcast network, an unmatched sports portfolio, and a franchise portfolio spanning Top Gun and Harry Potter to White Lotus and SpongeBob SquarePants. From this foundation, Skydance is committed to delivering for the creative community and consumers, with at least 30 theatrical films annually, each with a minimum 45-day theatrical window, and already boasts 180+ television shows. Across TV and streaming, Skydance will also continue to support the independent production sector by commissioning content from independent studios and licensing its own content to third parties, creating more opportunities and more jobs for creatives, both in front of and behind the camera.

David Ellison, Chairman and CEO of Skydance, said: "Today is a historic day, not just for Skydance but for our entire industry. From the start, our ambition was to bring these two storied studios together and create a stronger competitor, with the talent, resources, and reach to tell great stories in every genre, on every platform, for audiences everywhere. Now that ambition is a reality. We're grateful to everyone who made this possible – the employees, creative talent, and production teams of both companies, who worked tirelessly to get us here and inspire audiences around the world every day, as well as the advisors and partners who guided this transaction to completion. Our focus now turns to the future: building a company that empowers creatives, entertains audiences and rewards shareholders. We couldn't be more excited to get to work."

Gerry Cardinale, Founder and Managing Partner of RedBird Capital and a Skydance Board Director, said: "This is a defining moment for the industry. By applying our owner-operator model to Paramount and WBD's unmatched portfolio of iconic franchises, premium original programming, and live sports rights, we can protect that legacy while building for a media landscape that's undergoing transformational change. David, our Co-CEO Ynon Kreiz, and the rest of our world-class Skydance team have the vision and track record to lead through this change. We're proud to back them as we build a stronger Hollywood, expand opportunities for talent, and create long-term value for our shareholders."

At the same time, consumers can expect greater innovation from a company built with technology at its core, including significant improvements to its direct-to-consumer streaming products, which will unify into a single service over time.

The transaction received unanimous approval from competition authorities covering nearly 70 jurisdictions worldwide, reflecting recognition of the deal's pro-competitive nature and the benefits it brings to consumers and creatives alike. The combination will strengthen competition and expand consumer choice, both on Skydance's own platforms and across the broader industry.

The combined company is built on a strong financial foundation that positions it to capitalize on growth opportunities, deliver on its commitments, and drive shareholder value. Skydance is one of the largest media and entertainment companies in the world, with nearly $70 billion in revenue. We are targeting $6 billion-plus in run-rate synergies over the next three years. Applying the same operational playbook that allowed Paramount to exceed its synergy targets following the Skydance-Paramount merger, the synergy savings will come primarily from technology, integration and procurement, marketing and real estate rationalization. That will make the company leaner and more nimble, freeing it to grow its investment in the stories, creators and technology that matter most while reducing net leverage to its 3.0x target by the end of 2029.

Powered by best-in-class content, streaming scale and technological edge, the combined company expects to generate more than $10 billion in free cash flow by 2030 – reducing leverage while funding growth and investment. Its pro forma content spend of more than $30 billion for the last twelve-month period will be disciplined and strategic, prioritizing audience reach and long-term value creation. 

WBD's common stock has ceased trading on the Nasdaq Exchange, effective today. The Ellison Family holds the largest equity stake in Skydance (NYSE: SKYD), and the Ellison Family and RedBird Capital Partners ("RedBird") together are the sole holders of Paramount Class A Common Stock, including 100% of the combined company's voting shares.

As previously stated, the transaction included $47 billion of new equity investment in Class B Common Stock, led by the Ellison Family, RedBird, Public Investment Fund (PIF), L'IMAD, Qatar Investment Authority (QIA) and LionTree, which was priced at $12.00 per share. The debt financing for the transaction was led by Bank of America, Citigroup and Apollo.

Advisors

Centerview Partners LLC and RedBird Advisors acted as lead financial advisors to Paramount, and Bank of America Securities, Citi, M. Klein & Company and LionTree Advisors also acted as financial advisors. Cravath, Swaine & Moore LLP and Latham & Watkins LLP acted as legal counsel to Paramount. Latham & Watkins LLP also acted as legal counsel to the investor consortium, including the Ellison Family.

Allen & Company, J.P. Morgan and Evercore served as financial advisors to WBD and Wachtell Lipton, Rosen & Katz and Debevoise & Plimpton LLP served as legal counsel.

Barclays Capital acted as financial advisors to the Special Committee of the Board of Directors of Paramount and Cleary, Gottlieb, Steen & Hamilton LLP served as legal counsel.

About Skydance

Skydance is a next-generation global media and entertainment company, composed of three business segments: Studios, Direct-to-Consumer, and TV Media. Skydance's portfolio unites legendary brands, including Paramount, Warner Bros., HBO and HBO Max, Paramount+, Pluto TV, CBS, CNN, CBS Sports, TNT Sports, Nickelodeon, Cartoon Network, MTV, Food Network, BET, HGTV, and Comedy Central.

PSKY-IR

Cautionary Note Concerning Forward-Looking Statements

This communication contains "forward-looking statements" regarding the completed acquisition of WBD and the integration, synergies, financial and leverage targets, strategy, impact on competition, and other go-forward matters of the combined company. The reader is cautioned not to rely on these forward-looking statements. These statements are based on current expectations of future events. If underlying assumptions prove inaccurate or known or unknown risks or uncertainties materialize, actual results could vary materially from the expectations and projections of Paramount or WBD. Risks and uncertainties include, but are not limited to: risks that the expected benefits, synergies and opportunities of the completed acquisition may not be realized or may take longer to realize than expected; risks and costs associated with the integration of the business of WBD, including the ability to integrate successfully and to achieve anticipated synergies and financial targets; risks that the combined company may not achieve the expected run-rate synergies, net leverage, free cash flow or other financial goals described in this press release within the expected timeframes or at all; potential disruption to business operations and relationships as a result of the completed acquisition and ongoing integration; the risk of stockholder litigation relating to the acquisition of WBD; risks related to Paramount's streaming business; the adverse impact on Paramount's advertising revenues as a result of changes in consumer behavior, advertising market conditions and deficiencies in audience measurement; risks related to operating in highly competitive and dynamic industries; the unpredictable nature of consumer behavior, as well as evolving technologies and distribution models; risks related to Paramount's decisions to invest in new businesses, products, services and technologies, and the evolution of Paramount's business strategy; the potential for loss of carriage or other reduction in, or the impact of negotiations for, the distribution of Paramount's content; damage to Paramount's reputation or brands; losses due to asset impairment charges for goodwill, content and long-lived assets, including finite-lived intangible assets; liabilities related to discontinued operations and former businesses; increasing scrutiny of, and evolving expectations for, sustainability initiatives; evolving business continuity, cybersecurity, privacy and data protection and similar risks; challenges in protecting and maintaining Paramount's intellectual property rights; domestic and global political, economic and regulatory factors affecting Paramount's business generally or the completed acquisition of WBD; the inability to hire or retain key employees or secure creative talent; disruptions to Paramount's operations as a result of labor disputes; risks and costs associated with the integration of, and Paramount's ability to integrate, the businesses of Paramount Global, Paramount, Skydance and WBD successfully and to achieve anticipated synergies, including in the amounts or on the timelines anticipated to realize such synergies; litigation relating to the transactions contemplated by the transaction agreement entered into on July 7, 2024, between Paramount Global and Skydance Media, LLC, potentially resulting in substantial costs; volatility in the price of Paramount's Class B common stock; the effect Paramount's dual-class capital structure and the concentrated ownership may have on the price of its Class B common stock or business; risks related to a private sale of a controlling interest in Paramount, including that Paramount's stockholders may not realize any change of control premium on shares of Paramount's Class B common stock and that Paramount may become subject to the control of a presently unknown third party; risks associated with Paramount's status as a "controlled company" under NYSE rules, including its exemption from certain corporate governance requirements; risks associated with the lack of voting rights of Paramount's Class B common stock; risks that anti-takeover provisions in Paramount's amended and restated certificate of incorporation ("Charter") and amended and restated bylaws, and under Delaware law, could deter, delay, or prevent a change of control; risks that exclusive forum provisions in Paramount's Charter could limit a stockholder's choice of forum for certain claims and discourage lawsuits against Paramount's directors and officers; risks that corporate opportunity provisions in Paramount's Charter could permit certain persons to pursue competitive opportunities that might otherwise be available to Paramount; risks associated with Paramount's holding company structure, including its dependence on distributions from its subsidiaries to meet tax obligations and other cash requirements; risks related to the combined company's ability to incur substantially more debt and its ability to meet the financial and other covenants contained in the agreements governing its substantial indebtedness; risks relating to the combined company's ability to deleverage the business in accordance with management's targets, including risks arising from assumptions, uncertainties and contingencies that may affect our ability to reduce indebtedness; risks relating to management's ability to execute on its strategic plan and improve the combined company's financial profile and cash flows from operations; and risks relating to any capital or other financing the combined company may have to raise in order to reduce its indebtedness following the acquisition of WBD. A further list and description of these risks, uncertainties and other factors and the general risks associated with the respective businesses of Paramount and WBD can be found in Paramount's Annual Report on Form 10-K for the fiscal year ended December 31, 2025, filed with the SEC on February 25, 2026, as amended by Paramount's Annual Report on Form 10-K/A, filed with the SEC on April 24, 2026, as superseded by, and solely to the extent set forth in, Paramount's Current Report on Form 8-K, filed with the SEC on May 13, 2026, Paramount's Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2026, filed with the SEC on August 4, 2026, including in the sections captioned "Cautionary Note Concerning Forward-Looking Statements" and "Item 1A. Risk Factors," and Paramount's subsequent filings with the SEC, and WBD's Annual Report on Form 10-K for the fiscal year ended December 31, 2025, filed with the SEC on February 27, 2026, WBD's Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2026, filed with the SEC on August 6, 2026, in each case, including in the sections captioned "Cautionary Note Concerning Forward-Looking Statements" and "Item 1A. Risk Factors," and WBD's subsequent filings with the SEC, including filings related to the acquisition of WBD. Copies of these filings, as well as subsequent filings, are available online at www.sec.gov, https://ir.paramount.com/sec-filings/paramount, https://ir.corporate.discovery.com/financials/sec-filings, as applicable, or on request from Paramount or WBD. Neither Paramount nor WBD undertakes to update any forward-looking statement as a result of new information or future events or developments, except as required by law. We are not able to reconcile forward-looking non-GAAP financial measures because we are unable without unreasonable efforts to accurately estimate the individual adjustments for such reconciliations, as applicable, or to quantify the probable significance of these items at this time.

SOURCE Skydance Corporation

Dutch Bros (BROS +0.15%) stock fell 21% in September, according to data provided by S&P Global Market Intelligence. The company is still feeling negative market sentiment after some disappointing earnings updates in August.

Growing painsDutch Bros is a relatively small coffee shop chain that has ambitious expansion plans. It owns 1,177 stores as of the end of the second quarter, and it plans to reach 2,029 stores by 2029, nearly doubling today's count.

Image source: Dutch Bros.

It consistently reports robust growth, and the second quarter was fantastic, which you probably wouldn't realize based on the market's reaction. The company is still growing fast and becoming more profitable, and it's generating consumer loyalty as it expands across the country.

Revenue increased an impressive 32.5% to $550.9 million in the quarter, and company-owned same-shop sales were up 8.3%. Company-owned same-shop transactions were up 3.4%, indicating that the increase didn't come entirely from price hikes. Systemwide metrics were somewhat lower, at 5.8% and 1.7%, respectively, and Dutch Bros is transitioning from its original franchise model to new company-owned stores only.

So what didn't the market like? There's concern about rising costs, which is why negative market sentiment persisted into September, with inflation remaining strong.

The market also didn't like management's guidance. Although it slightly raised full-year guidance for total revenue and same-store sales, it significantly raised guidance for capital expenditures (capex), from a midpoint of $280 million to a midpoint of $360 million. Management explained that average capex per new store is still $1.4 million, and the higher total reflects aggressive expansion.

After the earnings release, the company announced that a deal to acquire a small restaurant chain that would have made it easy to add 65 new stores fell through, feeding into the negativity about whether Dutch Bros would be able to expand as fast as it's aiming for.

An opportunity to buy on the dip?Dutch Bros has short-term plans to double store count and long-term plans to reach 7,000 stores. These stores are attracting fans and sales, and it's easy to see how it could reward investors despite the short-term drop.

Premium Feature

Moneyball Superscore

78/100

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Dutch Bros' P/E ratio has fallen dramatically along with the price, and it trades at 54 times trailing 12-month sales. That's still expensive, and it demonstrates how much the market expects from it.

The good news is that it's the cheapest P/E ratio ever. The bad news is, it's rich enough that the stock can still fall on any missteps.

I think Dutch Bros is an excellent stock with tons of long-term potential. If you can buy now and hold for at least five years, it's a good time to buy.

The company opened its first walk-up-only location last year, and wants to replicate the concept elsewhere.

Appointment comes as Paramount nears completion of Warner Bros. Discovery merger Ellison sought a partner with the operating firepower to help usher in a new era of entertainment — duo prepared to unlock value for the creative community, shareholders and audiences alike As Chairman & CEO, Ellison will lead all strategy, creative and technology while Kreiz, as Co-CEO will oversee the Company's day-to-day operations and integration of the combined businesses — a pairing that joins complementary skillsets to amplify results Kreiz joins Ellison from Mattel and brings more than 30 years of experience leading and investing in international media and entertainment businesses, with a track record of pioneering new business models at the intersection of media, entertainment and technology , /PRNewswire/ -- Paramount Skydance Corporation (NASDAQ: PSKY) (the "Company") today disclosed that David Ellison has announced Ynon Kreiz as Co-CEO of the anticipated merged company, effective at closing. Kreiz, who will start at Paramount, effective October 5, 2026, joins Ellison from Mattel, a leading global play and family entertainment company where he has served as Chairman and CEO since 2018, leading an unprecedented transformation of the business and the execution of its multi-platform, brand-centric strategy. Upon closing, Ellison will remain Chairman and CEO of the newly combined company, and Kreiz will serve as Co-CEO and join the Board of Directors. Together, they will oversee the combined company's businesses, which will report jointly to both.

Ynon Kreiz Ellison's appointment of Kreiz caps a long-term plan: pursue both Paramount and Warner Bros. Discovery, then partner with a leading executive of his caliber to integrate, operationalize and manage the businesses as they build one of the most ambitious next-generation media companies in the industry's history.

Together, Ellison and Kreiz will lead the anticipated combined company as one team, pairing complementary skillsets to maximize the full upside of the merger under a comprehensive long-term strategy. Ellison will focus on the company's long-term strategy, creative vision and direction, including its talent relationships, strategic partnerships, technology and capital allocation. Kreiz will focus on the company's day-to-day management and integration of the combined businesses.

David Ellison said: "Bringing together Paramount and Warner Bros. Discovery to create a next-generation global media company is a transformational moment for our industry. Leading it takes a rare combination of strategic vision, operational depth and experience running a public company at the highest levels of media. Ynon brings all three. In Ynon, I'm adding a partner with strong leadership and the operating firepower this integration demands. It's a division of labor built on our complementary strengths, with clear reporting lines and it lets me focus where I can contribute most: long-term strategy, the company's overall creative direction, talent relationships, strategic partnerships, technology and capital allocation. We're like-minded, we see this business the same way and there's no one I'd rather partner with. Together we'll build one integrated company that is creator-first, tech-forward and built to scale globally."

Ynon Kreiz said: "I'm excited to partner with David to build the next-generation media and entertainment company — bringing together premium content and iconic brands at the highest quality and scale, serving global audiences across every entertainment vertical and distribution platform. David is a unique talent and executive: a rare blend of business acumen, creative instinct, and clear vision. I very much share that vision, and I'm inspired by what we can accomplish together. The industry is at an inflection point, demanding evolution, investment, and a willingness to rethink business models. I look forward to working with the leadership team to build a cohesive global entertainment platform — one that stands out with best-in-class operations and execution powered by technology, with unparalleled creative relationships, production capabilities, and global reach. We will continue empowering creators, make this company a greenfield for innovation and storytelling, and collaborate with key partners to reach and engage fans worldwide."

Gerry Cardinale, Founder and Managing Partner of RedBird Capital Partners — the Company's co-controlling shareholder and a member of its Board of Directors — said: "David has done what few modern executives have accomplished. He has led this company through not one but two historic acquisitions, while also running the business and building a team that's already exceeding our synergy targets, beating our financial metrics, and never wavering on our commitment to the creative community. Ynon has spent his career at the intersection of media, technology and franchise-building — pairing extraordinary storytelling with the technology to deliver it to fans everywhere. He understands not just how fans connect with the IP they love, but the economics that make entertainment endure. Great leaders accomplish great things. Historic ones know when to bring in the right partner to make it last — and that's what David has done. It's exactly why the company will have the operational firepower and the cutting-edge leadership to win."

Today's appointment of an executive with Kreiz's stature and track record marks the next step in Ellison's pursuit to unite Warner Bros. Discovery and Paramount — two of Hollywood's most storied studios, with more than 200 combined years of storytelling and a streaming platform expected to reach 200 million-plus global subscribers.

In just over a year under Ellison, Paramount has doubled its theatrical slate, deepened its creative bench, greenlit more than 40 new and returning series for Paramount+, and built the capital discipline and technology to scale. That foundation positions the Company to grow 2026 projected revenue and EBITDA (preSBC) by 16-19%, and it laid the groundwork for this historic transaction, which is expected to generate more than $6 billion in run-rate synergies accelerate EBITDA growth.

Once the Paramount and Warner Bros. Discovery merger closes, the combined company will be guided by four overarching strategic priorities: win in content, become the most technologically capable media company, maximize operational efficiencies, and earn trust — delivering reliable, responsible experiences that strengthen its relationships with creators, audiences, consumers, employees, advertisers and partners.

About Ynon Kreiz

Mr. Kreiz has extensive experience as a corporate leader in the entertainment industry, with a track record of scaling content and brands globally. During his career spanning more than 30 years, he has successfully managed and invested in international media enterprises that have pioneered new business models at the intersection of media and technology.

Mr. Kreiz has been Chairman and Chief Executive Officer of Mattel since 2018. Mattel is a leading global play and family entertainment company with one of the most iconic brand portfolios in the world, including Barbie, Hot Wheels, Fisher-Price, UNO, American Girl, and Thomas & Friends. Following his appointment at Mattel in 2018, Kreiz led a multi-year transformation that strengthened its leadership across key toy categories and expanded its brands into new entertainment verticals, including film, television, consumer products, digital games, live events and experiences, and publishing. Under Mr. Kreiz's leadership, Mattel's first theatrical release, "Barbie," became the #1 global box office film of 2023 and Warner Bros. Pictures' highest-grossing movie of all time, and the Company grew its global footprint to more than 150 countries.

Before Mattel, Mr. Kreiz was Chairman and CEO of Maker Studios, a global leader in short-form video content and one of YouTube's largest multichannel networks, which was acquired by The Walt Disney Company. He previously served as Chairman and CEO of Endemol Group, the world's largest independent television production company at the time, producing more than 10,000 hours of programming a year and owning global franchises such as "Big Brother" and "Deal or No Deal." Prior to that, he was a General Partner at Balderton Capital (formerly Benchmark Capital Europe), specializing in early-stage media and technology investments.

Earlier in his career, Mr. Kreiz was co-founder, Chairman, and CEO of Fox Kids Europe NV, which developed and owned pay TV channels across Europe and the Middle East. The company was acquired by The Walt Disney Company.

Mr. Kreiz holds a BA degree in Economics and Management from Tel Aviv University and an MBA from UCLA Anderson School of Management. He serves on the Board of Directors of Warner Music Group and the Board of Advisors of the UCLA Anderson School of Management. Mr. Kreiz is a member of Business Roundtable and the Academy of Motion Picture Arts and Sciences. He was named in 2024 one of TIME's 100 Most Influential People in the World and Entertainment Person of the Year by Cannes Lions.

Following the completion of its acquisition of Warner Bros. Discovery, the merged company's portfolio will unite legendary brands including Paramount Pictures, Warner Bros. Pictures, Paramount Television, Warner Bros. Television, CBS, CBS News, CBS Sports, CNN, HBO, HBO Max, TNT, TBS, Discovery, HGTV, Food Network, Nickelodeon, Cartoon Network, MTV, BET, Comedy Central, Showtime, Paramount+, Pluto TV, and Skydance Animation, Film, Television, Interactive/Games, and Paramount Sports Entertainment — serving audiences in more than 200 countries and territories.

Cautionary Note Concerning Forward-Looking Statements

This communication contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, regarding the merger, including statements relating to projected financial performance, anticipated synergies, expected subscriber levels and the expected benefits of the merger. The reader is cautioned not to rely on these forward-looking statements. Forward-looking statements may be identified by words such as "projected," "anticipated," "expected," "estimated," "believes," "intends," "plans," "seeks," "will," and similar expressions. These statements are based on current expectations of future events. If underlying assumptions prove inaccurate or known or unknown risks or uncertainties materialize, actual results could vary materially from the expectations and projections of Paramount or WBD. The forward-looking statements in this communication include, but are not limited to, statements regarding projected adjusted EBITDA growth, anticipated run-rate synergies, expected global subscriber levels and other financial and operational metrics. Any financial projections or estimates contained herein are based on assumptions that the Company believes to be reasonable but are inherently uncertain, and actual results may differ materially. Risks and uncertainties include, but are not limited to: the risk that the closing conditions for the merger will not be satisfied, including the risk that clearances under applicable antitrust or regulatory laws will not be obtained; the possibility that the transaction will not be completed in the expected timeframe or at all; potential adverse effects to the businesses of Paramount or WBD during the pendency of the transaction, such as employee departures or distraction of management from business operations; the risk of stockholder litigation relating to the transaction, including resulting expense or delay; the potential that the expected benefits and opportunities of the merger, if completed, may not be realized or may take longer to realize than expected; risks related to Paramount's streaming business; the adverse impact on Paramount's advertising revenues as a result of changes in consumer behavior, advertising market conditions and deficiencies in audience measurement; risks related to operating in highly competitive and dynamic industries; the unpredictable nature of consumer behavior, as well as evolving technologies and distribution models; risks related to Paramount's decisions to invest in new businesses, products, services and technologies, and the evolution of Paramount's business strategy; the potential for loss of carriage or other reduction in, or the impact of negotiations for, the distribution of Paramount's content; damage to Paramount's reputation or brands; losses due to asset impairment charges for goodwill, content and long-lived assets, including finite-lived intangible assets; liabilities related to discontinued operations and former businesses; increasing scrutiny of, and evolving expectations for, sustainability initiatives; evolving business continuity, cybersecurity, privacy and data protection and similar risks; challenges in protecting and maintaining Paramount's intellectual property rights; domestic and global political, economic and regulatory factors affecting Paramount's businesses generally; the inability to hire or retain key employees or secure creative talent; disruptions to Paramount's operations as a result of labor disputes; risks and costs associated with the integration of, and Paramount's ability to integrate, the businesses of Paramount Global and Skydance successfully and to achieve anticipated synergies; litigation relating to the transactions contemplated by the transaction agreement entered into on July 7, 2024, between Paramount Global and Skydance, potentially resulting in substantial costs; volatility in the price of Paramount's Class B common stock; the effect Paramount's dual-class capital structure and the concentrated ownership may have on the price of its Class B common stock or business; risks related to a private sale of a controlling interest in Paramount, including that Paramount's stockholders may not realize any change of control premium on shares of Paramount's Class B common stock and that Paramount may become subject to the control of a presently unknown third party; risks associated with Paramount's status as a "controlled company" under Nasdaq rules, including its exemption from certain corporate governance requirements; risks associated with the lack of voting rights of Paramount's Class B common stock; risks that anti-takeover provisions in Paramount's amended and restated certificate of incorporation (the "Charter") and amended and restated bylaws, and under Delaware law, could deter, delay, or prevent a change of control; risks that exclusive forum provisions in the Charter could limit a stockholder's choice of forum for certain claims and discourage lawsuits against Paramount's directors and officers; risks that corporate opportunity provisions in the Charter could permit certain persons to pursue competitive opportunities that might otherwise be available to Paramount; risks associated with Paramount's holding company structure, including its dependence on distributions from its subsidiaries to meet tax obligations and other cash requirements; disruptions the merger may cause to Paramount's and WBD's business and commercial relationships; the negative impact that a failure to consummate the merger could have on Paramount's business, financial condition, results of operations and stock price; the risk that the merger may be prevented or delayed or the anticipated benefits reduced if Paramount does not obtain certain regulatory approvals; the risk that the Merger Agreement may be terminated in accordance with its terms, including if any conditions to the closing of the merger are not satisfied; the risk that litigation relating to the merger could prevent or further delay the closing of the merger or result in the payment of damages after closing; challenges realizing synergies and other anticipated benefits expected from the merger, including integrating WBD's business successfully; risks to Paramount's business, financial condition or results of operations as a result of the incurrence of substantial costs and indebtedness in connection with the merger; and risks of reduced ownership and economic interest by Paramount's existing stockholders as a result of the merger. A further list and description of these risks, uncertainties and other factors and the general risks associated with the respective businesses of Paramount and WBD can be found in Paramount's Annual Report on Form 10-K for the fiscal year ended December 31, 2025, filed with the SEC on February 25, 2026, Paramount's Form 10-Q for the quarterly period ended March 31, 2026, filed with the SEC on May 4, 2026, and Paramount's Form 10-Q for the quarterly period ended June 30, 2026, filed with the SEC on August 4, 2026, including, in each case, in the sections captioned "Cautionary Note Concerning Forward-Looking Statements" and "Item 1A. Risk Factors," and Paramount's subsequent filings with the SEC, and WBD's Annual Report on Form 10-K for the fiscal year ended December 31, 2025, filed with the SEC on February 27, 2026, and WBD's Form 10-Q for the quarterly period ended March 31, 2026, filed with the SEC on May 6, 2026, including, in each case, in the sections captioned "Cautionary Note Concerning Forward-Looking Statements" and "Item 1A. Risk Factors," and WBD's subsequent filings with the SEC. Copies of these filings, as well as subsequent filings, are available online at http://www.sec.gov, ir.wbd.com or on request from Paramount or WBD. Paramount undertakes no obligation to update any forward-looking statement as a result of new information or future events or developments, except as required by law. We are not able to reconcile forward-looking non-GAAP financial measures because we are unable without unreasonable efforts to accurate estimate the individual adjustments for such reconciliations, as applicable, or to quantify the probable significance of these times at this time.

PSKY-IR

SOURCE Paramount Skydance Corporation

Dutch Bros (BROS -0.40%) stock looks like a buy after its recent pullback. The coffee chain posted strong second-quarter results on Aug. 5, with revenue up 32% year over year and healthy margins, but as of Sept. 25, the stock is down 49% from its 52-week high after management's near-term outlook came in softer than investors wanted.

Here's why the market's focus on the third quarter is creating an attractive entry point in this company's long-term growth story.

Image source: Getty Images.

Stock sold off on slower comparable sales growth In the second quarter, Dutch Bros' revenue growth was driven both by 48 new shop openings and 5.8% year-over-year growth in systemwide same-shop sales (a metric that excludes locations opened within the last 15 months). This was the company's 13th straight quarter of same-store sales growth.

Profitability is also improving as the chain scales. On a trailing-12-month basis, net margin reached 7%. In the quarter, net income rose to $51.6 million from $38.4 million a year earlier.

So why did the stock sell off? Four factors stand out:

Third-quarter guidance implied slower momentum. Management expects same-shop sales growth of 4% to 5%. That deceleration in growth reflects that the company faces tougher year-over-year comparisons after last year's food program rollout. Near-term cost pressures. Higher coffee and food costs, along with a shift toward built-to-suit leases, are expected to raise the cost of goods sold and weigh on the company's gross margin. Higher capital spending. The company raised its capex guidance to a range of $350 million to $370 million -- up from its prior range of $270 million to $290 million -- as it aims to stay on pace to hit its goal of operating 2,029 shops by 2029. A deal that didn't happen. On Aug. 5, Dutch Bros said it planned to buy 65 former Salad and Go locations, but later walked away after a competing bid exceeded its maximum price. Wall Street prefers a clean, predictable growth path. When anything clouds a company's near-term outlook -- even if its long-term narrative is intact -- the market often punishes the stock.

But the opportunity hasn't changed. At its March 2025 investor day, management pegged its long-term U.S. expansion potential at over 7,000 shops. With 1,225 locations open as of June 30, 2026, Dutch Bros still has a long runway for growth ahead.

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Dutch Bros is trading at 2.6 times sales The rising profit margin and the discipline to avoid overpaying for Salad and Go suggest management is prioritizing profitable growth and long-term shareholder returns. The stock's near-term volatility has created an opening for long-term investors to buy in at a lower valuation.

Dutch Bros trades at about 2.6 times sales. Restaurant chains like Starbucks and Chipotle often commanded price-to-sales multiples in the 3 to 4 range during their early-stage, high-growth years, so 2.6 is a clear discount. For investors who can hold the stock for at least five years, Dutch Bros looks like a buy on this pullback.

John Ballard has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Chipotle Mexican Grill, Dutch Bros, and Starbucks. The Motley Fool recommends the following options: short September 2026 $35 calls on Chipotle Mexican Grill. The Motley Fool has a disclosure policy.

It started with two brothers selling espresso out of a pushcart in Oregon 34 years ago. Today, Dutch Bros (BROS -0.16%) has an empire of 1,225 stores offering coffees, energy drinks, and other handcrafted beverages.

If you're a fan of half and half, consider these two halves: Dutch Bros currently only has a presence in half of U.S. states. There's a lot of real estate left to cover. The stock has also been cut in half -- down 49% -- over the last three months.

Image source: Getty Images.

Getting rich at the pour house Putting your next $500 into Dutch Bros carries risks, but a closer look at the recent collapse shows the bullish thesis for Dutch Bros remains intact. The business is still growing. You have to go all the way back to the end of 2024 to find the last time revenue rose at least 33% the way it did in the chain's latest quarter.

Investors are rightfully concerned about the impact of rising interest and inflation rates on food and beverage retail concepts, but Dutch Bros just raised its guidance this summer. Comps remain positive, a trend that has now held for 19 consecutive years.

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The expansion story is still there. Dutch Bros is less than 18% of the way to the 7,000 locations it expects to open across the country. The emphasis may be on revenue growth, but it's also been profitable -- and growing those earnings -- for four consecutive years.

You will pay a premium to own Dutch Bros, as you would most growth stocks. A benefit of coming in after the recent sell-off is that you can get in at just 28 times next year's projected earnings, a discount relative to its heady growth.

A single $500 investment won't set you up for life, but it's a great way to start a position in one of the market's more dynamic retail concepts. Being opportunistic? I'll drink to that.

Rick Munarriz has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Dutch Bros. The Motley Fool has a disclosure policy.

Dutch Bros (BROS - Free Report) closed at $37.89 in the latest trading session, marking a -1.61% move from the prior day. The stock's performance was behind the S&P 500's daily gain of 0.51%. On the other hand, the Dow registered a gain of 0.93%, and the technology-centric Nasdaq increased by 0.48%.

Shares of the drive-thru coffee chain operator and franchisor have depreciated by 24.06% over the course of the past month, underperforming the Retail-Wholesale sector's loss of 6.89%, and the S&P 500's gain of 0.74%.

The investment community will be closely monitoring the performance of Dutch Bros in its forthcoming earnings report. The company is forecasted to report an EPS of $0.23, showcasing a 21.05% upward movement from the corresponding quarter of the prior year. Our most recent consensus estimate is calling for quarterly revenue of $550.94 million, up 30.07% from the year-ago period.

For the entire fiscal year, the Zacks Consensus Estimates are projecting earnings of $0.97 per share and a revenue of $2.14 billion, representing changes of +27.63% and +30.54%, respectively, from the prior year.

Investors should also pay attention to any latest changes in analyst estimates for Dutch Bros. These revisions help to show the ever-changing nature of near-term business trends. As a result, upbeat changes in estimates indicate analysts' favorable outlook on the business health and profitability.

Our research reveals that these estimate alterations are directly linked with the stock price performance in the near future. To capitalize on this, we've crafted the Zacks Rank, a unique model that incorporates these estimate changes and offers a practical rating system.

The Zacks Rank system, spanning from #1 (Strong Buy) to #5 (Strong Sell), boasts an impressive track record of outperformance, audited externally, with #1 ranked stocks yielding an average annual return of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has moved 0.11% higher. Currently, Dutch Bros is carrying a Zacks Rank of #3 (Hold).

In the context of valuation, Dutch Bros is at present trading with a Forward P/E ratio of 39.58. This denotes a premium relative to the industry average Forward P/E of 20.49.

It's also important to note that BROS currently trades at a PEG ratio of 1.23. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company's expected earnings growth trajectory. The Retail - Restaurants industry had an average PEG ratio of 1.79 as trading concluded yesterday.

The Retail - Restaurants industry is part of the Retail-Wholesale sector. Currently, this industry holds a Zacks Industry Rank of 159, positioning it in the bottom 36% of all 250+ industries.

The Zacks Industry Rank evaluates the power of our distinct industry groups by determining the average Zacks Rank of the individual stocks forming the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Keep in mind to rely on Zacks.com to watch all these stock-impacting metrics, and more, in the succeeding trading sessions.

Dutch Bros Inc (NYSE:BROS) shares have fallen 37% since the coffee chain's second-quarter results, but Bank of America (BofA) says the stock's valuation remains attractive and has reiterated its 'buy' rating.

The analyst says concerns over near-term same-store sales and longer-term competition from other drive-through concepts have weighed disproportionately on the stock's valuation.

The away-from-home beverage category is among the fastest-growing segments in the restaurant industry, BofA said.

The coffee and café category has grown at a 7% compound annual rate since 2018, generating $55 billion in annual sales, behind only burgers and chicken among limited-service restaurant categories.

The share of consumers reporting espresso-based beverage consumption in the past week rose to 43% in 2025 from 37% in 2020.

Dutch Bros has guided for same-store sales growth of 4% to 5% in the third quarter, down from 9% in the first half of the year.

BofA said the company's innovation pipeline includes approximately three new items per quarter, while its marketing budget is also growing.

Dutch Bros' marketing spending stands at 1.8% of system sales, compared with an average of 3.9%.

The company's food mix remains in the mid single digits, well below Starbucks' 23% share.

Dutch Bros reported approximately 20% same-store sales growth in Texas in the first quarter, despite a 6-percentage-point year-over-year increase in the share of its stores operating within five miles of the closest 7 Brew location.

BofA noted that new units continue to open at higher volumes and that unit returns remain industry-leading.

Dutch Bros trades at 1.4 times its next-12-month valuation relative to the S&P 500, near a historical trough and almost 50% below its three-year historical relative multiple of 2.5 times.

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The blueprint for investing success when it comes to quick-service concepts early in their expansion cycles is pretty clear. If you buy into a chain that is growing at a healthy clip -- with strong comps stacking on top of new openings -- you should generally do OK. A lack of profitability isn't ideal, but it's understandable when a trendy eatery or beverage shop is focused on ramping up its presence across the country.

Dutch Bros (BROS -0.41%) seems to be ticking all the growth-stock boxes. The chain of small-box stores handcrafting coffees, energy drinks, and other specialty beverages just posted its strongest quarterly revenue growth in more than a year. It's also in the black, working on its fourth consecutive year of growing profitability.

The chain should be a rock star for investors, but the headline doesn't lie. Dutch Bros stock has been cut nearly in half from its June highs. It would have to soar almost 100% -- a double Dutch, if you will -- to revisit those highs. It would have to more than double to return to its all-time peak set in early 2025. This feels like a buying opportunity. Let's take a closer look.

Image source: Getty Images.

Cool beans No one likes it when a cup of coffee goes cold. The same can be said about a coffee chain stock. Dutch Bros used to be a market darling among beverage stocks. Investors fixated on the long drive-thru lines. Its strong grasp of young beverage sippers who flocked to their local Dutch Bros after school made it a rare beverage concept, with afternoon traffic spikes.

All of this remains the same, and it's actually better now. Its long streak of positive comps now stretches 19 years long. Annual unit volumes now top $2 million apiece, a big deal since these are small-box stores averaging a mere 900 square feet. You don't need a lot of space when 90% of your traffic comes through the drive-thru lanes.

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Dutch Bros just posted another blowout quarter. Revenue rose 33% to $550.9 million, its strongest growth since the final quarter of 2024. Revenue topped $500 million for the first time. The lion's share of its growth came on the strength of its expansion. It now has 1,225 stores, 17% more than it had a year ago. It's been prioritizing higher-revenue company-owned stores over its franchising efforts, so revenue is growing even faster than the unit count.

The story gets better at the store level, where comps rose 5.8%, with an even more robust 8.3% jump for company-operated locations. Its company stores have consistently outperformed franchisee-run shops for at least the last three years.

This isn't a bottom-line story, but Dutch Bros is profitable. Net income rose 34% in its latest quarter. The shares aren't cheap, but at 30 times next year's earnings, that's a discount to its heady growth.

There are many outstretched hands waiting to hold a Dutch Bros coffee, a handcrafted energy drink, or a colorful, sweet beverage. Having 1,225 stores may seem like a lot, but the chain is sticking to its goal of 2,029 units by 2029. It now sees 7,000 eventual stores. It's a story the market isn't hearing, but grab a drink and gather 'round. Others will come later.

Dutch Bros' growth is supported by shop expansion, digital adoption and higher 2026 guidance, but its premium valuation and rising costs add risk.

Dutch Bros (BROS - Free Report) closed at $41.37 in the latest trading session, marking a -1.45% move from the prior day. This change lagged the S&P 500's daily loss of 0.45%. Meanwhile, the Dow experienced a drop of 1.21%, and the technology-dominated Nasdaq saw a decrease of 0.01%.

Heading into today, shares of the drive-thru coffee chain operator and franchisor had lost 13.34% over the past month, lagging the Retail-Wholesale sector's loss of 7.24% and the S&P 500's loss of 2.43%.

Investors will be eagerly watching for the performance of Dutch Bros in its upcoming earnings disclosure. The company's earnings per share (EPS) are projected to be $0.23, reflecting a 21.05% increase from the same quarter last year. In the meantime, our current consensus estimate forecasts the revenue to be $551.13 million, indicating a 30.11% growth compared to the corresponding quarter of the prior year.

Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $0.97 per share and revenue of $2.14 billion. These totals would mark changes of +27.63% and +30.54%, respectively, from last year.

Additionally, investors should keep an eye on any recent revisions to analyst forecasts for Dutch Bros. Such recent modifications usually signify the changing landscape of near-term business trends. Hence, positive alterations in estimates signify analyst optimism regarding the business and profitability.

Our research reveals that these estimate alterations are directly linked with the stock price performance in the near future. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system, which varies between #1 (Strong Buy) and #5 (Strong Sell), carries an impressive track record of exceeding expectations, confirmed by external audits, with stocks at #1 delivering an average annual return of +25% since 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. Right now, Dutch Bros possesses a Zacks Rank of #3 (Hold).

Looking at valuation, Dutch Bros is presently trading at a Forward P/E ratio of 43.18. For comparison, its industry has an average Forward P/E of 20.32, which means Dutch Bros is trading at a premium to the group.

We can also see that BROS currently has a PEG ratio of 1.34. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. As the market closed yesterday, the Retail - Restaurants industry was having an average PEG ratio of 1.69.

The Retail - Restaurants industry is part of the Retail-Wholesale sector. At present, this industry carries a Zacks Industry Rank of 153, placing it within the bottom 38% of over 250 industries.

The Zacks Industry Rank evaluates the power of our distinct industry groups by determining the average Zacks Rank of the individual stocks forming the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Don't forget to use Zacks.com to keep track of all these stock-moving metrics, and others, in the upcoming trading sessions.

On September 15, 2026, Dutch Bros Inc BROS shares fell by 4.7%, bringing the current price to $41.98. Over the past year, the stock has fluctuated between a high of $74.02 and a low of $41.89, showcasing significant volatility.

GF Value™ verdict: Current price is $41.98, compared to GF Value of $60.98, indicating a 31.2% undervaluation.GF Score™: 80/100, suggesting strong overall performance.Most notable signal: Insider activity shows $633.0M net selling over the past year.Is BROS Overvalued or Undervalued?The current market price of Dutch Bros Inc BROS at $41.98 is significantly below the GuruFocus GF Value™, which estimates the fair value at $60.98. This indicates that BROS is undervalued by approximately 31.2%, presenting a potential opportunity for investors. The GF Value™ is GuruFocus' proprietary intrinsic value estimate, derived from a combination of historical trading multiples, past business growth, and future performance projections. Given that the stock is trading below its estimated intrinsic value, there is a margin of safety for investors who consider entering at these levels.

However, while the undervaluation presents an attractive opportunity, it is crucial to weigh this against the underlying risks. The financial performance of the company, as indicated by its GF Score™ and other proprietary metrics, suggests that while there may be potential upside, challenges remain that could impact future performance.

How Does BROS's Valuation Compare to Its History?MetricCurrentHistoricalP/E (TTM)58.3x148.6xForward P/E32.7xN/AAnalyzing the P/E ratio, Dutch Bros is currently trading at 58.3x, which is 61% below its 5-year median P/E of 148.6x. This stark contrast highlights that the stock is trading significantly below its historical valuation, which aligns with the GF Value™ verdict that suggests it is undervalued. This analysis reinforces the idea that there may be substantial upside if the company's fundamentals improve.

What Does BROS's GF Score™ Tell Us?The GF Score™ reflects a comprehensive assessment of a company's financial health and potential for future growth. Dutch Bros has a GF Score™ of 80/100, indicating strong overall performance. The strongest sub-rank is the Growth Rank at 8/10, while the weakest areas are Financial Strength and Profitability, both rated at 5/10.

MetricRatingGF Score™80/100Financial Strength5/10Profitability5/10Growth8/10Valuation8/10Momentum7/10The GF Score™ indicates that while Dutch Bros shows strong growth potential, it faces challenges regarding its financial strength and profitability. Investors should consider these dimensions when evaluating the company's long-term sustainability and performance prospects.

What Are Gurus and Insiders Doing with BROS?Currently, seven gurus hold Dutch Bros Inc BROS shares, with three adding to their positions and three trimming their holdings in recent quarters. This mixed guru activity suggests a divided sentiment regarding the stock's future performance.

In terms of insider activity, it is important to note that over the past 12 months, insiders have sold a substantial $633.2 million worth of shares, while only purchasing $0.2 million. This $633.0 million net selling indicates a lack of confidence from insiders, which could be a red flag for potential investors. Such activity may suggest that insiders are not optimistic about the stock's immediate future, contrasting with the potential upside indicated by the GF Value™.

What This Means for InvestorsBased on the analysis, Dutch Bros Inc BROS appears to be undervalued according to the GF Value™, which suggests a potential opportunity for investors. However, the significant insider selling and mixed guru sentiment add layers of complexity that warrant careful consideration. Therefore, potential investors should weigh the undervaluation against the risks presented by insider activity and company fundamentals. For further details, you can visit the Dutch Bros Inc (BROS) stock page, or explore more on the GF Value™ page.

Frequently Asked QuestionsWhat is BROS's GF Score™?

The GF Score™ for Dutch Bros Inc is 80/100, indicating strong overall performance in various financial metrics.

Is BROS overvalued or undervalued?

According to the GF Value™, BROS is currently undervalued, trading at a price of $41.98 compared to its fair value of $60.98.

What is BROS's P/E ratio?

The P/E ratio for Dutch Bros Inc is 58.3x, which is significantly lower than its 5-year median P/E of 148.6x, indicating that the stock is trading below its historical valuation.

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Key Takeaways Dutch Bros' Q2 shop contribution rose 32% to nearly $156M, with margin at 30.6%.Beverage, food and packaging costs rose 80 bps to 26.1%, led by coffee and food rollout expenses.Labor and SG&A leverage offset some pressure as same-shop sales rose 8.3% and transactions grew 3.4%. Dutch Bros Inc. (BROS - Free Report) continues to demonstrate resilient unit-level economics despite rising input and occupancy costs. In the second quarter of 2026, revenues from company-operated locations increased 34% year over year to $510 million, while company-operated shop contribution rose 32% to nearly $156 million. Company-operated shop contribution margin was 30.6%, or approximately 31%, compared with 31.1% a year ago, reflecting a 50-basis-point contraction despite strong sales growth.

Costs are the key pressure. Beverage, food and packaging expenses rose to 26.1% of company-operated shop revenues, up 80 basis points year over year, primarily due to higher coffee costs and expenses tied to the food rollout. Management expects coffee inflation to remain a headwind in the second half, with its 2026 outlook incorporating about 60 basis points of COGS pressure. Occupancy costs are another drag, with the shift toward build-to-suit leases expected to create roughly 50 basis points of pressure in 2026.

However, rising sales productivity is providing an important offset. Labor costs declined 120 basis points as a percentage of company-operated shop revenues, largely due to sales leverage. Adjusted SG&A also benefited from scale, falling to 13.2% of revenues and generating 90 basis points of leverage. Management now expects roughly 90 basis points of adjusted SG&A leverage for the full year.

Dutch Bros’ traffic and sales momentum could help preserve healthy shop economics. Company-operated same-shop sales increased 8.3% in the second quarter, supported by 3.4% transaction growth, while food, Dutch Rewards and newer-shop maturation continue to support demand. Still, management expects some margin pressure to persist, with the midpoint of its $385-$390 million adjusted EBITDA guidance incorporating roughly 20 basis points of year-over-year margin compression from higher coffee and occupancy costs, partly offset by SG&A leverage.

Margin Resilience Remains a Key Competitive FocusDutch Bros’ ability to sustain a roughly 31% shop contribution margin despite higher coffee and occupancy costs places margin execution at the center of its competitive positioning. Peers such as Starbucks Corporation (SBUX - Free Report) and McDonald’s Corporation (MCD - Free Report) are likewise relying on sales leverage, productivity and cost discipline to protect profitability amid persistent inflationary pressures.

Starbucks is seeing improving margin momentum under its Back to Starbucks strategy. In the third quarter of fiscal 2026, North America operating margin expanded about 280 basis points year over year, supported by stronger sales leverage, operational improvements and cost savings. Management noted that coffee remained a cost headwind, though its impact eased from earlier quarters. Starbucks also expects sales leverage and ongoing cost-saving initiatives to help offset investments in service and menu innovation, while its broader $2 billion cost-savings plan runs through fiscal 2028.

McDonald’s is also focused on balancing inflation with restaurant-level productivity. Management highlighted continued pressure from food, paper and labor costs, while emphasizing productivity opportunities across company and franchise restaurant P&Ls. The company generated more than $4 billion in restaurant margins in the second quarter and is working to simplify restaurant operations, improve execution and support profitable traffic growth.

BROS’ Price Performance, Valuation & EstimatesShares of Dutch Bros have declined 12.6% in the past six months, slightly outperforming the Zacks Retail - Restaurants industry, but underperforming the broader Retail and Wholesale sector and the S&P 500 Index.

BROS Stock’s Six-Month Price Performance

Image Source: Zacks Investment Research

From a valuation standpoint, Dutch Bros stock trades at a forward price-to-sales ratio of 3.06, below the industry’s average of 3.12.

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

Image Source: Zacks Investment Research

The Zacks Consensus Estimate for BROS’ 2026 earnings per share (EPS) implies a year-over-year uptick of 27.6%. The EPS estimates for 2026 have increased in the past 60 days.

Image Source: Zacks Investment Research

EPS Trend of BROS StockDutch Bros currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.