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Dutch Bros (BROS) Rises But Trails Market: What Investors Should Know

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Dutch Bros (BROS - Free Report) closed the latest trading day at $39.54, indicating a +0.94% change from the previous session's end. The stock's performance was behind the S&P 500's daily gain of 1.08%. Elsewhere, the Dow saw an upswing of 0.32%, while the tech-heavy Nasdaq appreciated by 1.58%.

Prior to today's trading, shares of the drive-thru coffee chain operator and franchisor had gained 0.28% over the past month. This has outpaced the Retail-Wholesale sector's loss of 0.31% and lagged the S&P 500's gain of 0.43% in that time.

The investment community will be closely monitoring the performance of Dutch Bros in its forthcoming earnings report. The company is expected to report EPS of $0.12, down 7.69% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $316.08 million, up 26.49% from the year-ago period.

In terms of the entire fiscal year, the Zacks Consensus Estimates predict earnings of $0.36 per share and a revenue of $1.22 billion, indicating changes of +20% and +26.81%, respectively, from the former year.

Furthermore, it would be beneficial for investors to monitor any recent shifts in analyst projections for Dutch Bros. Recent revisions tend to reflect the latest near-term business trends. Therefore, positive revisions in estimates convey analysts' confidence in the company's business performance and profit potential.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To utilize this, we have created the Zacks Rank, a proprietary model that integrates these estimate changes and provides a functional rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has remained unchanged. Dutch Bros currently has a Zacks Rank of #1 (Strong Buy).

From a valuation perspective, Dutch Bros is currently exchanging hands at a Forward P/E ratio of 109.57. For comparison, its industry has an average Forward P/E of 19.49, which means Dutch Bros is trading at a premium to the group.

One should further note that BROS currently holds a PEG ratio of 4.01. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. By the end of yesterday's trading, the Retail - Restaurants industry had an average PEG ratio of 1.91.

The Retail - Restaurants industry is part of the Retail-Wholesale sector. This industry, currently bearing a Zacks Industry Rank of 157, finds itself in the bottom 38% echelons of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.


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