Dutch Bros Is Up Over 65% in the Last Few Weeks. Is It Too Late to Buy?

Core Viewpoint - Dutch Bros has seen a significant stock surge of 65% since early November due to improved financial results, despite trading below its post-IPO high from late 2021 [1][2] Company Growth Potential - Dutch Bros has expanded to 950 shops across 18 states as of Q3 2024, up from just over 500 shops at its stock peak in 2021, indicating a strong growth trajectory similar to Starbucks and Walmart [3][4] - The company plans to add at least 160 new shops in 2025, with a long-term goal of operating 4,000 or more shops, which is expected to enhance profitability [6] Financial Performance - In the first nine months of 2024, same-shop sales increased by over 5%, contributing to revenue exceeding $938 million, a 32$60 million for the first three quarters of 2024, a significant increase from $14 million in the same period of 2023 [8] Market Position and Valuation - The company is currently trading at a forward P/E ratio of 123, with a revenue growth forecast of 30% for 2024 expected to slow to 20% in 2025, raising questions about whether the stock price has outpaced its fundamentals [9][10] - Dutch Bros has a price-to-sales (P/S) ratio of 4.3, which is higher than Starbucks' 3.1, potentially making investors hesitant to buy [10] Investment Outlook - Despite the recent stock price surge, Dutch Bros is considered relatively inexpensive when measured by sales, and it still trades about one-third below its record high, suggesting room for growth [11] - The company is less than one-fourth of the way through its planned expansion, indicating potential for continued growth in the coming years [12]