Dutch Bros Inc. (NYSE:BROS) shareholders are probably feeling a little disappointed, since its shares fell 8.4% to US$28.57 in the week after its latest quarterly results. The result was fairly weak overall, with revenues of US$197m being 5.2% less than what the analysts had been modelling. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
After the latest results, the ten analysts covering Dutch Bros are now predicting revenues of US$971.8m in 2023. If met, this would reflect a sizeable 24% improvement in sales compared to the last 12 months. Losses are forecast to balloon 91% to US$0.12 per share. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$986.4m and losses of US$0.078 per share in 2023. So it's pretty clear the analysts have mixed opinions on Dutch Bros even after this update; although they reconfirmed their revenue numbers, it came at the cost of a massive increase in per-share losses.
The consensus price target held steady at US$38.10, seemingly implying that the higher forecast losses are not expected to have a long term impact on the company's valuation. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic Dutch Bros analyst has a price target of US$53.00 per share, while the most pessimistic values it at US$30.00. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Dutch Bros' past performance and to peers in the same industry. We would highlight that Dutch Bros' revenue growth is expected to slow, with the forecast 33% annualised growth rate until the end of 2023 being well below the historical 42% growth over the last year. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 11% annually. Even after the forecast slowdown in growth, it seems obvious that Dutch Bros is also expected to grow faster than the wider industry.
The Bottom Line
The most important thing to take away is that the analysts increased their loss per share estimates for next year. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. The consensus price target held steady at US$38.10, with the latest estimates not enough to have an impact on their price targets.
With that in mind, we wouldn't be too quick to come to a conclusion on Dutch Bros. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Dutch Bros analysts - going out to 2025, and you can see them free on our platform here.
Plus, you should also learn about the 1 warning sign we've spotted with Dutch Bros .
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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