Dutch Bros or Starbucks: Which Coffee Stock Has More Growth?

Group 1: Market Overview - Rising coffee prices have negatively impacted the stock prices of Starbucks and Dutch Bros, with Starbucks down over 4% and Dutch Bros down over 12% in the last 30 days [1][2] - Concerns about tariffs and a potential recession are leading investors to question the valuation of these stocks [2] Group 2: Company Profiles - Starbucks is a market leader with nearly 17,000 stores in the U.S. and generated $3.10 in earnings per share on$36.1 billion in revenue in 2024, both lower year-over-year [3][2] - Dutch Bros, a newer entrant with a devoted customer base, opened its 1,000th location in February 2025 and has seen significant stock performance, up 92.6% in the last 12 months [5][6] Group 3: Coffee Price Dynamics - Arabica coffee prices have surged over 70% since November 2024, reaching levels not seen since 1977 [7] - The increase in coffee prices is influenced by the threat of tariffs and adverse weather conditions in coffee-producing countries, particularly Brazil [8][9] Group 4: Sourcing and Supply Chain - Dutch Bros sources its coffee primarily from Brazil, Colombia, and El Salvador, making it vulnerable to supply chain disruptions [9] - Starbucks sources coffee from over 30 countries and buys approximately 3% of the world's total coffee supply, which exposes it to pricing pressures despite geographic diversity [10] Group 5: Valuation and Investment Considerations - Both stocks are trading at premium valuations, with Dutch Bros at over 111x forward earnings and Starbucks at 35x forward earnings [12] - Investors are paying a premium for growth, and a move below the 200-day moving average could present a buying opportunity for Dutch Bros [13]