Dutch Bros Stock Rockets 90% After IPO: A Green Flag for Long-Term Investors

Dutch Bros stock has climbed nearly 90% since 2023, after disappointing performance following its IPO in 2021. The company has tailored its strategy to appeal to Gen Z, with competitive pricing for its "handcrafted" beverages and a strong brand presence. Dutch Bros has delivered nine consecutive quarters of positive same-store sales growth, while Starbucks has experienced six consecutive quarters of declining comp sales. The stock is still undervalued and worth buying, with growth potential and expanding margins.

Dutch Bros Inc. (BROS) has seen significant growth since its initial public offering (IPO) in 2021, with its stock climbing nearly 90% since 2023 [1]. The company has strategically positioned itself to appeal to the Gen Z demographic, which has contributed to its strong performance. Dutch Bros offers "handcrafted" beverages at competitive prices, and its brand has resonated well with younger consumers. This has resulted in nine consecutive quarters of positive same-store sales growth, while Starbucks has experienced six consecutive quarters of declining comp sales [2].

The company's marketing strategy has been successful in winning over the younger generation, with 67% of its customers being female and only 23% over the age of 36 at the time of its IPO [1]. This focus on Gen Z is a key factor in Dutch Bros' growth, as brands that connect with this demographic tend to drive long-term growth. The company's success in this area has even led to a market share gain, as Starbucks has struggled with sales growth in recent quarters [2].

Despite the impressive growth, Dutch Bros' stock remains undervalued. It was trading at a low price-to-sales multiple a year ago, which led to a rerating by investors. Now, the stock is trading at a more appropriate sales multiple for its growth potential. As the company continues to grow, margins are expected to expand, and earnings per share are likely to increase [1].

Investors should be cautious, however. While Dutch Bros has shown strong growth and potential, it is not recommended by The Motley Fool Stock Advisor's analyst team. The team has identified 10 other stocks that they believe are better investments for the coming years [3]. Before making a decision, investors should consider the advice of professional analysts and conduct their own research.

In conclusion, Dutch Bros has shown impressive growth and potential, driven by its successful marketing strategy and appeal to the Gen Z demographic. However, investors should approach the stock with caution and consider all available information before making a decision.

References:
[1] https://www.fool.com/investing/2025/08/03/1-green-flag-for-dutch-bros-stock-right-now/
[2] https://finance.yahoo.com/news/dutch-bros-bros-falls-more-220002069.html
[3] https://www.nasdaq.com/articles/1-green-flag-dutch-bros-stock-right-now