Drive-through beverage business Dutch Bros (BROS 1.49%) has notched some impressive feats. For instance, its debut as a public company back in 2021 saw its stock shoot past its IPO price of $23 per share to close around $37.

But while the stock rose even higher in the ensuing months, it eventually returned to earth, hitting a 52-week low of $22.67 last September. Since then, however, the stock price jumped back up as the company delivered record revenue in its third quarter.

With the share price increase, is it now too late to buy Dutch Bros stock? To answer that question, it's necessary to dig into the business in more detail. Understanding the factors contributing to the company's success can help assess if Dutch Bros makes a good long-term investment.

A key factor in the revenue growth of Dutch Bros

Dutch Bros made a name for itself selling hand-crafted coffee using a drive-through format that emphasized speed of service. This approach proved popular, as evidenced by the company's rapid expansion.

At the end of 2023, the number of Dutch Bros stores stood at 831. That's up from 2022's 671 shops. And for 2024, the company plans to open between 150 to 165 new stores.

As Dutch Bros expanded, so has its revenue. Sales have been on an upward trajectory since its IPO.

BROS Revenue (TTM) Chart

Data by YCharts.

In the third quarter, revenue rose an impressive 33% to $264.5 million compared to $198.6 million in 2022. And for full year 2023, Dutch Bros expects to reach at least $950 million in sales, up from $739 million in 2022.

The company's revenue growth is poised to continue for some time thanks to its expansion plans. Dutch Bros is targeting to reach 4,000 stores over the next ten to fifteen years.

If it achieves this goal, Dutch Bros will notch another amazing accomplishment. And the company has plenty of runway to do this. Through the end of Q3, Dutch Bros had stores in just 16 states, mostly in the western U.S. Also, it's not in some major markets, such as New York and Chicago.

Other Dutch Bros factors to consider

But if Dutch Bros relied only on store expansion for revenue growth, that wouldn't speak to its ability to establish successful shops. So its growth in same store sales is a key performance metric. This reflects the year-over-year change in the revenue of stores open at least 15 months.

You want to see this metric remain a positive number, although it can go up or down from year to year depending on various factors, such as whether Dutch Bros opens stores near existing locations. The company might do that if a particular area experiences increased customer demand. For Q3, the company's same store sales achieved 4% growth compared to the prior year's 1.7%.

The company also turned a corner with profitability in 2023. Through three quarters, Dutch Bros achieved net income of $13.7 million. That's a substantial improvement over the $16.4 million net loss incurred in the initial three quarters of 2022, and demonstrates Dutch Bros can expand locations profitably.

However, one key unknown enters the picture in 2024. Dutch Bros is now under new leadership as Christine Barone became CEO at the start of this year. The first quarterly results under her tenure are months away, so it'll take time before investors can assess her ability to maintain or improve the company's current success.

But she recognized that about 63% of transactions are from members of the company's loyalty program. As a result, she's embracing promotions to keep these repeat customers coming back, and reaching new clientele through increased use of advertising. These are promising signs, especially if the efforts can grow the company's same store sales.

Deciding on Dutch Bros stock

In terms of whether it's too late to capture upside with Dutch Bros shares, consider the stock is well off its 52-week high of $41.44, and even below the nearly $37 closing price on the day of its IPO, at the time of this writing. In addition, the average price target for the stock among Wall Street analysts is $34.33.

Given these factors, and assuming new CEO Christine Barone can continue the company's current success, it's not too late to buy Dutch Bros stock.

Add to this the beverage purveyor's successful revenue growth to date, its profitability, and its impressive store expansion plans spanning many years, and Dutch Bros stock looks like a solid long-term investment.