Why Is Dutch Bros Stock Up Today?

Why Is Dutch Bros Stock Up Today?

Dutch Bros has quietly established itself as a true competitor in the coffee industry, but can it prise investors away from its main rivals?

Since debuting on the public market in September of last year, Dutch Bros (NYSE: BROS) has done a fantastic job of cementing itself as a real player in the coffee industry. The chain now has a whopping 538 stores across 12 states – not bad for a company that started with a single coffee cart in its local town.

Yesterday saw Dutch Bros stock soar more than 5% following some positive news for investors in a preliminary report around fourth-quarter sales.

What happened with Dutch Bros stock?

Dutch Bros’ preliminary fourth-quarter numbers were overwhelmingly positive yesterday. The company surpassed expectations for new shops opened, opening 98 over the course of the year as opposed to the expected 92. Due to this success, the firm also raised its guidance for new shop opens in 2022 from 112 to 125 in a striking display of confidence.

BROS also stated that it experienced “strong same shop sales momentum in the fourth quarter,” with growth of 10.1% compared to the previous quarter. This has led to the firm predicting quarterly revenue growth exceeding the higher end of its previous expectations.

All of this news bodes extremely well for any current shareholders or potential investors. Wall Street will be eager to see Dutch Bros’ final earnings report for the fiscal year to find out just how much these positive results translate to revenue.

So should I buy Dutch Bros stock?

Dutch Bros is one of the few success stories from last year’s record number of IPOs. The company is up over 15% on its initial price and looks to be growing at a steady and manageable rate. The raising of expectations across areas such as shop numbers and overall revenue should be seen as massively positive signs for the future of the company. With the global coffee market currently slated to be worth over $102 billion, Dutch Bros is well-positioned to carve out its own distinct share of the market.

That’s not to say the industry isn’t competitive, however. Industry leader Starbucks doesn’t seem to be slowing down either having reported a 17% year-over-year increase in global sales in its last quarterly earnings report. Despite having now established a foothold in the west of the United States, a lot of work remains to truly expand and become regarded nationally as a true rival to many of the existing big chains. 

If Dutch Bros can continue its rapid expansion and remain profitable throughout its growth, it could very well become a highly lucrative stock for investors willing to give it a chance in these early stages.

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