Dutch Bros. (Nyse: bros) Shares fell by 22% in March according to the data given by Intelligence on the global market of S&P. Investors may be concerned about how the tariffs It can affect the price of coffee beans, and moreover, younger, riskier stocks are more prone to fall when the market is unstable.
The Dutch Bros. is a small but fast -growing cafe -based cafe on the West Bank, but is rapidly moving across the country. Recently exceeded 1,000 stores and is live in 18 countries.
Between new stores and sales growth at the same store, revenue is increasing at double -digit rates. Due to 35% in the fourth quarter driven by new stores and selling the same store. Open 32 new stores in the quarter and reported an increase of 6.9% in the sale of the same store over a year.
It also becomes very profitable in volume. A contribution margin, which is an operational margin at a restaurant level, expanded from 26.5% to 28.9% in the fourth quarter, and net income increased from 3.8 million to $ 6.4 million.
Management expects to speed up stores in 2025 from 151 last year to around 160 this year, and has long -term targets of 20% annual revenue growth.
For some time, the management said there was an opportunity for 4,000 stores. Recently got new management and has made a lot of changes, including what it considers a market opportunity. Its new goal is to reach 2,029 stores by 2029, more than doubling the current storage of stores, with a long -term opportunity to reach 7,000 stores.
Another exciting opportunity is in packaged goods. It has only announced a partnership with trilling food and diet to launch a new line of packed coffee and other products to be sold in retail stores.
Dutch brosus actions hit astronomical values before a recent decline, and that is a good lesson as to why valuation is important. Highly esteemed stocks are likely to diminish when the market gets nervous. However, even down last month, Bros. Dutch stocks are still beating the market, which is 20% to date.
At the current price, it’s not yet cheap, trading a Forward one -year ratio p/e of 76. There is a chance to go even lower, but you can’t market time. If you have a risk appetite and a long time horizon, you can buy some actions at this price. You may want to use an average dollar price strategy to open a position today and benefit from better prices at another point.
Before you buy actions of Dutch Bros., take a look at this:
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