Market Sell-Off: 1 Growth Stock Down 25% to Buy Right Now

Core Viewpoint - The recent market sell-off has created a potential buying opportunity for Dutch Bros, which has several growth drivers that could enhance its stock performance in the coming years [1]. Expansion Strategy - Store expansion is a primary growth driver for restaurant stocks, similar to successful companies like McDonald's and Starbucks [2]. - Dutch Bros ended last year with 982 locations, with 670 being company-owned, and currently operates in 12 states, primarily in the western U.S. [3][4]. - The company added 151 new stores last year and plans to increase that to around 160 new locations this year, representing approximately 16% unit growth [6]. Financial Performance - Dutch Bros has experienced solid same-store sales growth, with a 6.9% increase last quarter, driven by price increases and a 2.3% rise in transactions [8]. - Company-operated stores saw even better performance, with comparable-store sales climbing 9.5% and transactions up 5.2% [8]. Mobile Ordering and Customer Engagement - The introduction of mobile ordering is a key initiative, with 96% of stores now offering this service, although only 8% of orders currently come from mobile devices [9]. - The company is integrating mobile ordering with its loyalty program to enhance customer engagement and encourage repeat visits [9]. Food Sales Potential - Dutch Bros currently derives only about 2% of its sales from food, compared to nearly 20% for Starbucks, indicating significant growth potential in this area [10]. - The company is testing new food concepts with positive initial results, aiming to expand its food offerings without compromising beverage service [11]. Market Valuation - The recent market sell-off has reduced Dutch Bros stock by 25% from its all-time high, resulting in a forward price-to-sales (P/S) ratio of 4.9 times analysts' 2025 estimate [12]. - Despite commanding a premium, Dutch Bros has greater growth opportunities over the next 10 to 15 years compared to mature operations like Starbucks, making it an attractive entry point for investors [13].