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Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.
In the last reported quarter, the company’s earnings surpassed the Zacks Consensus Estimate by 33.3%. BROS has an impressive record of surpassing earnings expectations. It has exceeded the consensus mark in the trailing four quarters, the average surprise being 132.4%, as shown in the chart below.
BROS Earnings Surprise History
Image Source: Zacks Investment Research
Trend in Dutch Bros’ Estimate Revision
The Zacks Consensus Estimate for fourth-quarter earnings is pegged at 2 cents per share, indicating a 50% decline from the 4 cents reported in the year-ago quarter. The consensus estimate has been unchanged in the past 60 days.
For quarterly revenues, the consensus mark is pegged at $319.1 million, suggesting an increase of 25.6% from the year-ago quarter’s reported figure.
What Our Model Unveils for BROS
Our proven model does not conclusively predict an earnings beat for Dutch Bros this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat.
Earnings ESP: Dutch Bros has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
BROS’ top line in fourth-quarter 2024 is likely to have benefited from seasonal offerings, expansion efforts, and the mobile order and pay rollout. The company’s real-estate strategy and investment in new markets have been proving successful, enhancing new shop productivity. BROS has invested significantly in its development team and processes, positioning the company for continued growth.
Dutch Bros has significantly increased its paid advertising investments, focusing on new and mature markets to drive brand awareness. The impacts have been especially notable in Texas, where unaided brand awareness has tripled. These campaigns are likely to have directly contributed to improved shop productivity and transaction growth, ensuring Dutch Bros stays ahead of the competition in emerging markets. Then again, increased digital spending in new and mature markets continues to boost brand awareness and shop productivity.
In addition to scaling its footprint, BROS plans to further leverage technology investments, including mobile ordering enhancements and personalized loyalty program offerings, to drive customer engagement and sales. These efforts are likely to have aided the top line.
The consensus estimate for company-operated shop revenues is pegged at $290 million, suggesting a 27.8% year-over-year rise. The consensus estimate for franchising and other revenues is pegged at $29 million, implying 8.5% year-over-year growth.
However, Dutch Bros’ bottom is likely to have been hurt by high costs. The company is making significant investments in its development and construction teams to strengthen its growth pipeline. While these investments are strategic, they may lead to higher expenses in the short term, impacting net earnings.
Price Performance & Valuation
BROS shares have skyrocketed 139.7% in the past year compared with the Zacks Retail – Restaurants industry’s 9.4% growth. Over the past year, Dutch Bros has outperformed its peers, including McDonald's Corporation (MCD - Free Report) , Kura Sushi USA, Inc. (KRUS - Free Report) and Potbelly Corporation (PBPB - Free Report) .
BROS’s Price Performance
Image Source: Zacks Investment Research
From a valuation perspective, Dutch Bros’ stock is trading at a premium. The company has a forward 12-month price-to-earnings of 123.3X, significantly above the industry average of 27.16X.
Conclusion
Dutch Bros has demonstrated strong revenue growth and brand expansion, benefiting from investments in technology, advertising and new market penetration. However, despite these positives, the company faces near-term headwinds, including rising operational costs and a significant premium valuation compared with its industry peers. While Dutch Bros continues to expand its footprint and drive customer engagement, the anticipated earnings decline and high forward price-to-earnings ratio suggest limited upside in the short term.
Given these factors, existing investors may consider holding on to their positions as the long-term growth strategy remains intact. However, new investors should wait for a more attractive entry point, especially with potential near-term volatility surrounding the upcoming earnings report.
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Dutch Bros Stock to Post Q4 Earnings: Buy Now or Wait for Results?
Dutch Bros Inc. (BROS - Free Report) is scheduled to report fourth-quarter 2024 results on Feb. 12, 2025, after the closing bell.
Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.
In the last reported quarter, the company’s earnings surpassed the Zacks Consensus Estimate by 33.3%. BROS has an impressive record of surpassing earnings expectations. It has exceeded the consensus mark in the trailing four quarters, the average surprise being 132.4%, as shown in the chart below.
BROS Earnings Surprise History
Image Source: Zacks Investment Research
Trend in Dutch Bros’ Estimate Revision
The Zacks Consensus Estimate for fourth-quarter earnings is pegged at 2 cents per share, indicating a 50% decline from the 4 cents reported in the year-ago quarter. The consensus estimate has been unchanged in the past 60 days.
For quarterly revenues, the consensus mark is pegged at $319.1 million, suggesting an increase of 25.6% from the year-ago quarter’s reported figure.
What Our Model Unveils for BROS
Our proven model does not conclusively predict an earnings beat for Dutch Bros this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat.
Earnings ESP: Dutch Bros has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Zacks Rank: The company carries a Zacks Rank #3 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Factors Shaping Dutch Bros’ Q4 Performance
BROS’ top line in fourth-quarter 2024 is likely to have benefited from seasonal offerings, expansion efforts, and the mobile order and pay rollout. The company’s real-estate strategy and investment in new markets have been proving successful, enhancing new shop productivity. BROS has invested significantly in its development team and processes, positioning the company for continued growth.
Dutch Bros has significantly increased its paid advertising investments, focusing on new and mature markets to drive brand awareness. The impacts have been especially notable in Texas, where unaided brand awareness has tripled. These campaigns are likely to have directly contributed to improved shop productivity and transaction growth, ensuring Dutch Bros stays ahead of the competition in emerging markets. Then again, increased digital spending in new and mature markets continues to boost brand awareness and shop productivity.
In addition to scaling its footprint, BROS plans to further leverage technology investments, including mobile ordering enhancements and personalized loyalty program offerings, to drive customer engagement and sales. These efforts are likely to have aided the top line.
The consensus estimate for company-operated shop revenues is pegged at $290 million, suggesting a 27.8% year-over-year rise. The consensus estimate for franchising and other revenues is pegged at $29 million, implying 8.5% year-over-year growth.
However, Dutch Bros’ bottom is likely to have been hurt by high costs. The company is making significant investments in its development and construction teams to strengthen its growth pipeline. While these investments are strategic, they may lead to higher expenses in the short term, impacting net earnings.
Price Performance & Valuation
BROS shares have skyrocketed 139.7% in the past year compared with the Zacks Retail – Restaurants industry’s 9.4% growth. Over the past year, Dutch Bros has outperformed its peers, including McDonald's Corporation (MCD - Free Report) , Kura Sushi USA, Inc. (KRUS - Free Report) and Potbelly Corporation (PBPB - Free Report) .
BROS’s Price Performance
Image Source: Zacks Investment Research
From a valuation perspective, Dutch Bros’ stock is trading at a premium. The company has a forward 12-month price-to-earnings of 123.3X, significantly above the industry average of 27.16X.
Conclusion
Dutch Bros has demonstrated strong revenue growth and brand expansion, benefiting from investments in technology, advertising and new market penetration. However, despite these positives, the company faces near-term headwinds, including rising operational costs and a significant premium valuation compared with its industry peers. While Dutch Bros continues to expand its footprint and drive customer engagement, the anticipated earnings decline and high forward price-to-earnings ratio suggest limited upside in the short term.
Given these factors, existing investors may consider holding on to their positions as the long-term growth strategy remains intact. However, new investors should wait for a more attractive entry point, especially with potential near-term volatility surrounding the upcoming earnings report.