Dutch Bros (BROS 3.27%) is not a stock for risk-averse investors. In fact, it is very expensive today, with a price-to-earnings ratio that's over 100. For comparison, the S&P 500 index, which is trading near all-time highs, has an average P/E ratio of roughly 29.
But if you can stomach paying a premium price for this coffee shop, there's a huge opportunity for growth ahead.
Image source: Getty Images.
What does Dutch Bros do?
Technically speaking, Dutch Bros is a restaurant chain. However, it is centered on coffee, a beloved drink enjoyed around the world. Customers tend to be fairly loyal to their chosen coffee brand and/or shop. To be fair, it would be way more cost-effective for consumers to brew their own. However, the cost of a cup of coffee remains fairly modest, making it an affordable luxury.
The success of Starbucks (SBUX 1.21%) is a big example of how much consumers love their coffee. Today, Starbucks operates more than 40,000 locations worldwide. However, a look at the income statement is even more telling. The coffee maker generated nearly $37.2 billion in revenues in fiscal 2025, with roughly $30.7 billion of that total coming directly from its company-owned stores. This is a huge business.
Compared to Starbucks, Dutch Bros is a virtual nobody. It ended the third quarter of 2025 with 1,081 locations. The company's financial statements show that it generated revenues of $423.6 million. If you annualize that, Dutch Bros has an annual revenue run rate of nearly $1.7 billion. Starbucks is so much larger, it isn't even funny, but that's why you might want to buy $1,000 of Dutch Bros, which will get you around 18 shares of the stock.
NASDAQ: SBUX
Key Data Points
Dutch Bros has a huge opportunity for growth
There are three reasons to be excited about Dutch Bros' future. The first is that Starbucks demonstrates how large a coffee chain can become. It isn't a stretch to believe that Dutch Bros could double in size to around 2,000 locations. It could double again after that, to around 4,000 locations, and it would still be small compared to Starbucks. Doubling again from there would put it at 8,000 locations, which would make it a huge business but still not even close to the scale that Starbucks has achieved.
The second reason to be excited about Dutch Bros is the revenue growth that accompanies new store openings. Year over year, in the third quarter of 2025, revenues expanded 25%. The company is investing a huge amount of money into capital expenditures, notably the expansion of its store footprint, so earnings aren't growing as quickly as revenues. However, the fact that a fast-growing restaurant is profitable is a very good sign for its ability to keep growing.
NYSE: BROS
Key Data Points
The third reason to be positive about Dutch Bros' growth opportunity is that its stores are doing very well. In the third quarter of 2025, same-store sales increased 5.7%. The bulk of that was from an increase in traffic to the stores, not price increases.
Starbucks, for comparison, saw same-store sales rise 1% worldwide. Dig into that number a bit, however, and the news isn't nearly as good. In the U.S. market, where it competes with Dutch Bros, same-store sales were flat. Price increases led to a 1% uptick, which was offset by a 1% decline in traffic. In other words, Dutch Bros is excelling while its giant rival is, at best, treading water.
Dutch Bros: Paying up for growth
Returning to where things began, Dutch Bros is an expensive stock. Notably, Starbucks' P/E ratio is a little over 50, which is about half the level of Dutch Bros. If you have a value bias, you will not want to own Dutch Bros stock. However, if you see the long-term growth potential here, it seems reasonable that Dutch Bros could grow into its valuation and continue to expand from there. After all, the business could double in size three times over and still have more expansion opportunities ahead than Starbucks.
