What Happened?
Shares of coffee chain Dutch Bros (NYSE: BROS) fell 5.2% in the afternoon session after an analyst at William Blair lowered the company's third-quarter earnings per share (EPS) estimate. The investment banking firm William Blair revised its third-quarter 2025 earnings per share (EPS) forecast for the coffee chain down to $0.16 per share from a previous estimate of $0.17. This downward revision by the analyst appeared to be the primary catalyst for the negative sentiment and subsequent price drop. The consensus estimate for the company's full-year earnings remained at $0.57 per share. No other significant company-specific news was reported that could have explained the stock's movement.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Dutch Bros? Access our full analysis report here, it’s free.
What Is The Market Telling Us
Dutch Bros’s shares are very volatile and have had 26 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 9 months ago when the stock gained 40.3% on the news that the company reported a "beat and raise" quarter, which suggests that its recent sales optimization efforts are resonating with customers. Dutch Bros delivered strong third-quarter earnings, which blew past analysts' revenue and EBITDA expectations as same-shop transaction growth improved. This shows profitable growth. The company is engaging customers by introducing new menus, such as seasonal beverages like the Cookie Butter Latte. The rollout of mobile ordering across most locations has also increased transaction frequency. Lastly, the Dutch Rewards program also contributed to customer retention as the business recorded a high percentage of transactions from members and record-high new memberships. Given the impressive results, management raised full-year revenue and EBITDA guidance. Zooming out, we think this was a standout quarter.
Dutch Bros is up 5.9% since the beginning of the year, but at $59.65 per share, it is still trading 30.1% below its 52-week high of $85.37 from February 2025. Investors who bought $1,000 worth of Dutch Bros’s shares at the IPO in September 2021 would now be looking at an investment worth $1,626.
Do you want to know what moves the business you care about? Add them to your StockStory watchlist and every time a stock significantly moves, we provide you with a timely explanation straight to your inbox. It’s free and will only take you a second.
