Dutch Bros Stock Drops 30% Despite Rapid Expansion and Cash Flow Surge
Dutch Bros, the popular drive-thru coffee chain, has seen its stock plummet by 30% over the past month. Despite this, the company continues to expand and generate substantial cash flow.
Dutch Bros specialises in iced and blended drinks, with a strong focus on drive-thru service. It currently operates over 1,000 locations, having doubled its store count since 2021. The company aims to further expand to 2,029 locations by 2029, indicating a significant growth trajectory.
Last year, Dutch Bros generated $272 million in cash from operations and $73 million in free cash flow. Notably, in late 2024, the company started generating more cash from operations than it spent on capital expenditures for new stores. This shift demonstrates Dutch Bros' ability to balance growth with cash creation.
The company, which went public on October 8, 2025, is currently trading at 35 times its cash flow from operations. However, its total addressable market stands at 7,000-plus stores nationwide, suggesting ample room for growth.
Despite the recent stock decrease, Dutch Bros continues to show strong financial performance and growth potential. With a focus on expansion and cash generation, the company offers a blend of high growth and cash creation. However, shareholders may face dilution as shares outstanding have nearly tripled.
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