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Dutch Bros (BROS) Outpaces Stock Market Gains: What You Should Know

Zacks Equity Research
·3-min read

Dutch Bros (BROS) closed at $33.32 in the latest trading session, marking a +1.4% move from the prior day. The stock outpaced the S&P 500's daily gain of 0.22%. At the same time, the Dow lost 0.13%, and the tech-heavy Nasdaq gained 0.2%.

Heading into today, shares of the drive-thru coffee chain operator and franchisor had gained 21.75% over the past month, outpacing the Consumer Staples sector's loss of 9.3% and the S&P 500's loss of 8.32% in that time.

Investors will be hoping for strength from Dutch Bros as it approaches its next earnings release.

BROS's full-year Zacks Consensus Estimates are calling for earnings of $0.21 per share and revenue of $713.63 million. These results would represent year-over-year changes of -30% and +43.33%, respectively.

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Investors might also notice recent changes to analyst estimates for Dutch Bros. These recent revisions tend to reflect the evolving nature of short-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

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.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection remained stagnant. Dutch Bros currently has a Zacks Rank of #4 (Sell).

Investors should also note Dutch Bros's current valuation metrics, including its Forward P/E ratio of 159.51. This represents a premium compared to its industry's average Forward P/E of 20.36.

Meanwhile, BROS's PEG ratio is currently 4.74. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Beverages - Soft drinks was holding an average PEG ratio of 2.76 at yesterday's closing price.

The Beverages - Soft drinks industry is part of the Consumer Staples sector. This industry currently has a Zacks Industry Rank of 153, which puts it in the bottom 40% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow BROS in the coming trading sessions, be sure to utilize Zacks.com.


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