Consumer Discretionary Select Sector

Russell 2000

The Diluter

Comparable Companies - BROS

The report covers 216 insider sales totaling $1,323,616,950.67 with no reported purchases. Top institutional holders include Vanguard Group Inc. with an 8.83% stake and FMR LLC with a 5.72% stake. The latest short interest is 13,702,370 shares, representing 11.0% of the float with 3.5 days to cover.

EXECUTIVE CHAIRMAN OF BOARD

10% OWNER

The filing is an amendment to a Schedule 13G. The reporting persons are Travis Boersma, DM Trust Aggregator, LLC, DM Individual Aggregator, LLC, and DMI Holdco, LLC. The securities are held for investment purposes.

The securities were acquired and are held in the ordinary course of business and were not acquired and are not held for the purpose of or with the effect of changing or influencing the control of the issuer.

Christine Barone

Joshua Guenser

Sumi Ghosh

Victoria Tullett

Tana Davila

Travis Boersma

C. David Cone

Thomas Davis

Kathryn George

Stephen Gillett

G.J. Hart

Kory Marchisotto

Ann Miller

Todd Penegor

Christine Barone brings a strong background in executive leadership, notably as CEO of True Food Kitchen and through various roles at Starbucks. Her experience at consulting firms Bain & Company and Raymond James suggests a foundation in strategic analysis and financial operations. Her current role at Dutch Bros Inc. as CEO and President, coupled with her board service at Yelp Inc., indicates a proven ability to manage and guide public companies.

Chief Executive Officer and President

Joshua Guenser's public record primarily details his current role as CFO of Dutch Bros Inc. Information regarding his prior performance indicators or capital allocation events is not readily available through public web searches, suggesting a focus on his current responsibilities within the company.

Chief Financial Officer

Sumi Ghosh's public record is centered on his current position as President of Operations at Dutch Bros Inc. External searches do not yield specific details on his prior company performance metrics or capital allocation activities, indicating his professional history in this context is primarily defined by his current operational leadership.

President of Operations

Victoria Tullett's public profile is largely associated with her current role as Chief Legal Officer at Dutch Bros Inc. While her tenure and responsibilities within the company are documented, external searches do not provide specific performance indicators or capital allocation events from her previous career stages, suggesting her professional narrative is currently focused on her legal leadership at Dutch Bros.

Chief Legal Officer

Tana Davila's professional history, as reflected in public records, is primarily defined by her current role as Chief Marketing Officer at Dutch Bros Inc. Publicly available information does not detail specific performance metrics or capital allocation activities from her prior career, indicating her current contributions to Dutch Bros are the main focus of external visibility.

Chief Marketing Officer

Travis Boersma, as a co-founder and Executive Chairman, has been instrumental in the growth of Dutch Bros since 1992. His tenure as CEO of Dutch Bros OpCo from 2019 to 2021 provided direct operational leadership during a key growth phase. The documented purchase of significant assets from the company in 2024, approved by the board, highlights a related-party transaction that was vetted for arm's-length terms. His foundational role and continued leadership underscore his deep connection to the company's strategic direction and brand.

Purchase of airplane, hangar, and related equipment from the Company.

Co-Founder & Executive Chairman of the Board

C. David Cone's career demonstrates extensive financial leadership, particularly as CFO and EVP at Taylor Morrison Home Corporation and in various finance roles at PetSmart, Inc. His experience in financial management and capital allocation is further evidenced by his role as Chair of the Audit and Risk Committee at Dutch Bros Inc. Holding a B.A. in Business Economics from UC Santa Barbara, his background suggests a strong analytical foundation for overseeing financial health and risk.

Director

Thomas Davis possesses a robust financial background, including significant tenures as Managing Director and Partner at Brown Brothers Harriman & Co., and prior experience as Vice President at Goldman Sachs. His expertise in financial services and capital markets, complemented by an M.B.A. from Notre Dame, positions him as a valuable director with a strong understanding of financial strategy and operations.

Kathryn George's career is marked by extensive experience at Brown Brothers Harriman & Co., where she has served as a Partner since 2008 and previously as Chief Administrative Officer for over five years. Her long tenure in senior roles within a prominent financial institution suggests a deep understanding of financial operations, administration, and strategic management. Her economics degree from Trinity College further supports her analytical capabilities.

Stephen Gillett brings a wealth of experience from senior leadership roles, including CIO and CMO at Starbucks and CEO of Symantec. His background spans technology, marketing, and executive management, providing a diverse skill set. His academic credentials include a B.S. in Computer Science and an M.B.A., equipping him with both technical and business acumen. As Lead Independent Director and a member of key committees at Dutch Bros Inc., he plays a crucial role in governance and strategic oversight.

Lead Independent Director

G.J. Hart is a seasoned executive with a distinguished career in the restaurant industry, having served as CEO for multiple prominent brands including Papa John's, Torchy's Tacos, California Pizza Kitchen, and Texas Roadhouse. His extensive experience in leading and growing diverse food service businesses demonstrates a strong capacity for strategic leadership and operational execution. His current role as CEO of Papa John's and his directorship at Dutch Bros Inc. highlight his continued influence in the sector.

Kory Marchisotto is a marketing executive with significant experience in brand development and consumer goods, currently serving as SVP and CMO at e.l.f. Beauty and previously in a senior marketing role at bareMinerals. Her expertise in driving brand growth and consumer engagement, supported by her education from the Fashion Institute of Technology and Pace University, makes her a valuable asset to Dutch Bros Inc.'s board, particularly in areas of marketing and brand strategy.

Ann Miller possesses a strong legal and executive background, with significant roles at NIKE, Inc., including EVP of Global Sports Marketing and previously EVP and Chief Legal Officer. Her legal expertise, complemented by a J.D. summa cum laude from the University of Arizona, and her leadership in marketing and governance, as evidenced by her committee roles at Dutch Bros Inc., provide a comprehensive perspective on corporate strategy and risk management.

Todd Penegor is a highly experienced executive with a substantial track record in the restaurant sector, having led Papa John's International, Inc. as President and CEO, and previously serving as CEO for Torchy's Tacos and California Pizza Kitchen. His leadership has been associated with driving growth and operational enhancements across these organizations. His current directorship at Dutch Bros Inc. leverages this extensive experience in executive leadership and strategic management within the consumer-facing industry.

Moderately priced, full-service, casual dining concept offering specially seasoned and aged steaks hand-cut daily on the premises and cooked to order over open grills, complemented by a selection of ribs, seafood, chicken, and vegetable plates.

Includes the results of company and franchise Texas Roadhouse restaurants.

Includes the results of company Bubba's 33 restaurants, a casual dining concept with a sports bar atmosphere.

Operates Chipotle Mexican Grill restaurants, featuring a relevant menu of burritos, burrito bowls, quesadillas, tacos, and salads, striving to cultivate a better world by serving responsibly sourced, classically cooked, real food with wholesome ingredients.

All operations are aggregated into one reportable segment, as the Chief Operating Decision Maker reviews operations and financial performance at a consolidated level.

Modern, upscale, quick-casual restaurant chain offering burgers, chicken, crinkle-cut fries, shakes, beer, and wine, designed to be a community-gathering place with a focus on high-quality ingredients and Enlightened Hospitality.

The company has one operating segment and one reportable segment, as the CODM regularly reviews Shack operations and financial performance at a consolidated level.

Fast-casual restaurant chain offering Mediterranean-inspired cuisine, including customizable bowls and pitas, with a focus on fresh, healthy ingredients and digital convenience.

The company's operations are conducted as three operating segments: CAVA, Zoes Kitchen, and CAVA Foods, with CAVA and Zoes Kitchen being the reportable segments.

The company's principal executive offices are located at 110 SW 4th Street, Grants Pass, Oregon. The company operates company-operated shops and utilizes a new roasting facility in Melissa, Texas.

The management team is executing a high-velocity growth strategy but is failing the critical test of capital discipline. While revenue is growing (32.6% YoY), the team is destroying shareholder value by reinvesting capital at a 1.9% ROIC against a 15.0% cost of capital. The capital allocation pillar is a definitive failure (Score 0) due to the combination of negative FCF, massive dilution, and illogical dividend payments. The track record (Score 2) is adequate but unproven for this specific scaling challenge. The board (Score 3) is strong and provides competent oversight, but the incentives (Score 2) and the massive insider selling by the founder create a misalignment that suggests the current path is prioritizing empire-building over per-share value creation.

The company faces ongoing public and government scrutiny regarding ESG matters, including climate change, greenhouse gases, water resources, packaging and waste, animal health and welfare, deforestation, and land use. The company acknowledges that it may face increased pressure to provide expanded disclosure, set targets, or establish additional goals related to these matters. The company is subject to extensive federal, state, local, and foreign laws and regulations, and the costs of compliance are high and likely to increase.

The company reported approximately 18,000 full-time employees. The company has a company-wide minimum wage of at least $10.00 per hour. Management roles and headquarters employees receive more than eight weeks of company-paid parental leave after one year of service. The company targets 100% internal promotion for regional operators from a list of 400+ qualified candidates with an average tenure of 7 years.

The company is subject to risks from food-borne or water-borne illness, food contamination, or employee hygiene failures, which could negatively affect the brand and result in regulatory action or recalls. The company offers reduced sugar and sugar-free items but acknowledges that negative publicity regarding the health effects of sugar, caffeine, or other ingredients could reduce demand. The company is subject to the Payment Card Industry Data Security Standard (PCI DSS) and faces risks related to protecting customer and employee data, including credit and debit card numbers. The company relies on third-party vendors for ingredients and packaging, whose practices could impact food safety and quality.

The company collaborates with supply chain partners on material decisions regarding ingredients and process changes. It examines new and existing suppliers’ food safety and quality records through compliance assessments, spot-checks, onsite audits, and verification of insurance coverage. Franchise partners are required to purchase supplies and equipment from approved vendors. The company empowers operators and franchise partners to create local, shop-specific giveback programs within their communities.

This narrative is built upon a backdrop of aggressive capital consumption, with CapEx at $212.1M in FY 2024, and negative economic returns (ROIC of 1.9% vs. WACC of 15.0%), funded primarily through significant equity and debt issuance.

The strategy is explicitly focused on 'Capacity Expansion' (P14 Innovation Dossier). Management stated in the Q2 2025 transcript that average CapEx per shop declined to ~$1.4M due to a shift to capital-efficient build-to-suit leases. The goal is to open 175 new system shops in 2026.

The asset base is dominated by Shop build-outs and the new Texas roasting facility. There are no disclosed asset impairments in the provided data, and the auditor did not flag impairment as a CAM.

The company is reinvesting heavily (CapEx > OCF) to capture the whitespace opportunity. The low ROIC reflects the heavy investment in pre-opening costs and new shops that have not yet matured.

EV/Sales

EV/EBITDA

Charles Jemley

Co-Founder; Industry Experience; Brand Marketing Experience; Operations & Distribution Experience; Senior Leadership Experience.

CEO and President; Industry Experience; Brand Marketing Experience; Operations & Distribution Experience; Public Company Board Experience; Senior Leadership Experience.

Financial/Capital Allocation Experience; Technology Experience; Senior Leadership Experience.

Financial/Capital Allocation Experience; Senior Leadership Experience.

Financial/Capital Allocation Experience; Brand Marketing Experience; Operations & Distribution Experience; Technology Experience; Public Company Board Experience; Senior Leadership Experience.

Industry Experience; Financial/Capital Allocation Experience; Brand Marketing Experience; Operations & Distribution Experience; Technology Experience; Public Company Board Experience; Senior Leadership Experience.

Brand Marketing Experience; Senior Leadership Experience.

Financial/Capital Allocation Experience; Brand Marketing Experience; Operations & Distribution Experience; Technology Experience; Senior Leadership Experience.

Executive Chairman and Chief Executive Officer: 5.0x base salary/annual cash retainer. All other covered officers: 3.0x base salary. Directors: 5.0x annual cash retainer.

Brian Maxwell

Jess R. Elmquist

Nicholas Daddario

Venki Krishnababu

Dutch Bros Inc. is a high-growth operator and franchisor of drive-thru shops focused on serving high-quality, hand-crafted beverages with unparalleled speed and superior service. Founded in 1992 by brothers Dane and Travis Boersma in Grants Pass, Oregon, the company operates a mixed model where it encourages existing franchisees to develop within their operating areas while developing new regions with company-operated shops. The company's operations are centered around a drive-thru model that utilizes 'broistas' (employees) to provide a personalized customer experience, often utilizing a 'runner' system to greet customers and take orders via tablets before they reach the window.

This segment includes the operation of retail drive-thru shops that sell hand-crafted beverages, food, and packaged goods directly to consumers. The segment's cost of sales includes beverage, food, and packaging costs, labor costs, and occupancy and other costs.

This segment includes franchising activities, the sale of products to franchise partners, and other ancillary activities. Revenue is primarily derived from franchise royalties, initial franchise fees, and product sales to franchise partners.

Held WACC (15.0%) and Terminal Multiple (18.0x) constant. Solved for the implied Year 5 Operating Margin required to justify the current Enterprise Value.

Balance Sheet - Supplemental

Balance Sheet

Cash Flow Statement - Supplemental

Cash Flow Statement

Income Statement - Supplemental

Income Statement

Ratios

Valuation

Historical Ratios & Multiples - BROS

The coffee industry is experiencing secular tailwinds from premiumization and convenience, but the capital cycle is currently overheating. Industry-wide CapEx growth is outpacing revenue growth, signaling a lack of supply discipline that threatens long-term margins.

Dutch Bros is at a critical juncture as it laps record 2024 pricing and faces significant labor and commodity headwinds in 2025, all while the founder is aggressively exiting his position.

Unexplained revenue deceleration. If system same-shop sales fall below the 2-4% guidance range, the hypergrowth premium will evaporate as the market re-rates the stock toward peer multiples. This would validate our variant perception that the current growth is forced and unsustainable.

Further equity offerings. Given the negative free cash flow and high CapEx requirements, the company will likely need to tap equity markets again, further diluting existing shareholders.

Execution and competitive risk. The primary threat is a failure to achieve product-market fit at scale as the company moves into more competitive Midwest and Southeast markets dominated by Starbucks and Dunkin'.

Commodity and labor inflation. Rising coffee and dairy costs, combined with California's 25% increase in starting wages, could permanently compress margins.

Liquidation value analysis is not relevant for the company's archetype ('Early-Stage_Hypergrowth') and was not performed.

Cash & Equivalents

Accounts Receivable

Inventory

Tax Assets

Other Current Assets

Net PP&E

Intangibles

Other Non-Current

Accounts Payable

Current Debt

Deferred Revenue

Tax Liabilities

Other Current Liabilities

Non-Current Debt

Other Non-Current Liabilities

Document

RBC Capital Reiterates Outperform Rating on Dutch Bros Inc. (BROS)

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Dutch Bros Inc. To Present Its Long-Term Growth Strategy At 2025 Investor Day

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UBS Upgrades Dutch Bros Inc. (BROS) to Buy

SCHEDULE 13G

Earnings Report: EPS Surprise N/A, Revenue Surprise N/A

Dutch Bros price target lowered to $75 from $80 at RBC Capital

Dutch Bros price target lowered to $82 from $84 at Morgan Stanley

Dutch Bros price target raised to $76 from $72 at Barclays

'Dutch Bros Inc. (BROS) Remains Our Best Idea for 2026'; PT Raised at TD Cowen

Dutch Bros initiated with an Overweight at KeyBanc

Dutch Bros price target raised to $80 from $70 at Mizuho

Dutch Bros price target lowered to $75 from $82 at Stifel

UBS Reiterates Buy Rating on Dutch Bros Inc. (BROS)

Dutch Bros price target lowered to $65 from $92 at Barclays

Dutch Bros price target lowered to $70 from $80 at Wells Fargo

Dutch Bros price target raised to $80 from $75 at RBC Capital

Dutch Bros price target lowered to $84 from $86 at Morgan Stanley

Dutch Bros price target raised to $86 from $84 at Morgan Stanley

Dutch Bros is executing an aggressive unit expansion strategy that masks fundamental value destruction, as evidenced by a return on invested capital of 1.9% against a 15.0% cost of capital. The defining context for this investment is a massive lack of insider conviction, with Executive Chairman Travis Boersma and other insiders liquidating over $1.3 billion in stock over the last 12 months, including a $660 million exit in November 2025 alone. While revenue growth remains robust at 28.9%, the business model relies on continuous shareholder dilution and debt issuance to fund a capital-intensive land grab that fails to generate meaningful free cash flow.

Executive Summary

The company is prioritizing rapid whitespace capture through a mid-teens annual shop growth rate, yet this expansion is currently value-destructive. We expect a significant valuation correction as the market realizes that the current growth trajectory requires perpetual external capital and results in persistent shareholder dilution.<ul><li>Driver: Aggressive unit expansion and transaction-driving initiatives.</li><li>Catalyst: Market pivot from top-line growth metrics to free cash flow and return on capital discipline.</li><li>Protection: None; the net liquidation value is estimated at 0.00.</li></ul>Our variant perception is that the market is excessively rewarding Dutch Bros for top-line scale while ignoring the underlying unit economics that indicate every dollar of reinvestment is destroying value. While the consensus views the 4,000-unit target as a path to massive profitability, our analysis of the 1.9% ROIC suggests the current cash burn is not a discretionary investment in a winner-take-all market, but rather a structural requirement of a low-moat business model.This is a high-risk, venture-style investment in a disruptive technology, where the bet is on the company achieving market leadership and future profitability at scale, justifying the current cash burn.

Core Investment Rationale

Dutch Bros operates a high-velocity drive-thru beverage model focused on speed, service, and a differentiated brand culture. The company generates 91% of its revenue from company-operated shops, with the remainder coming from franchising royalties and product sales. The strategy is centered on three pillars: scaling the broista culture, executing on a large whitespace opportunity, and driving transactions through digital initiatives like Order Ahead and the Dutch Rewards program, which currently captures 72% of transactions. Revenue grew 32.6% in 2024 to $1.28 billion, but this growth was fueled by $212.1 million in capital expenditures. The company is shifting its real estate strategy toward more capital-efficient build-to-suit leases to manage balance sheet risk, though it remains heavily dependent on external financing, with stock issuance accounting for 34% of total capital sources over the last four years.The company's strategic assets are primarily intangible, centered on its brand identity and proprietary beverage formulations, including the Dutch Bros Rebel energy drink. Physical assets include a network of 1,081 shops as of late 2025 and a new roasting facility in Melissa, Texas, designed to support national expansion. However, these assets are highly specialized; our analysis suggests a net liquidation value of 0.00, as the specialized equipment and shop build-outs have minimal recovery value in a distressed scenario.Dutch Bros is the third-largest coffee chain in the U.S. by location count, trailing Starbucks and Dunkin'. The landscape is increasingly competitive, with fast-casual peers like CAVA and Chipotle accelerating their own drive-thru and digital capabilities. While Dutch Bros claims a cost advantage through its drive-thru-only model, its 26.3% gross margin is only slightly above the peer median of 25.4%, indicating limited structural pricing power against established giants.Dutch Bros has transitioned from a regional favorite to a national growth story, but the current situation is defined by a significant leadership and governance void. Following the IPO in 2021, the company has maintained a high-growth journey, yet recent inflection points suggest a shift in insider sentiment. The most disruptive context is the systematic liquidation of equity by the founding family. Executive Chairman Travis Boersma has reduced his stake significantly, with over $1.3 billion in total insider sales over the last year and zero open-market purchases. This massive exit by the founder occurs even as the company continues to issue new shares to fund operations, creating a stark divergence between the public growth narrative and the private actions of the board.

Business & Situation

<ul><li>Bull Case: Aggressive unit expansion toward a 4,000-shop TAM; strong digital engagement with 72% loyalty penetration; record system-wide AUVs reaching 2.0 million.</li><li>Bear Case: ROIC of 1.9% is far below the 15.0% cost of capital; massive insider selling totaling 1.3 billion; structural reliance on shareholder dilution to fund negative free cash flow.</li></ul>The market views Dutch Bros as a premier growth compounder capable of replicating the Starbucks success story. Investors are currently paying 7.3x EV/Sales, a significant premium to the peer median of 3.8x, based on the belief that the company's unique culture and drive-thru efficiency will eventually yield high-margin cash flows as the unit base matures. Macro headwinds, including coffee price inflation and California labor wage hikes, are viewed by the consensus as temporary obstacles that will be overcome by sales leverage and the new hot food program.The coffee industry is experiencing secular tailwinds from premiumization and convenience, but the capital cycle is currently overheating. Industry-wide CapEx growth is outpacing revenue growth, signaling a lack of supply discipline that threatens long-term margins.Our differentiated view is that the market is fixated on current cash burn while underestimating the long-term value of market leadership in a large TAM. However, the evidence suggests the opposite: the company is destroying value with every new shop opened. The massive insider selling by Travis Boersma serves as a definitive signal that those with the most information believe the current valuation is unsustainable. This governance friction-where the founder is exiting while the company dilutes public shareholders-prevents value drift from being a positive force; instead, it suggests the stock is being used as a currency for insider liquidity rather than a vehicle for shareholder compounding.We conclude that the fundamental disconnect between the company's 1.9% ROIC and its 15.0% WACC, combined with the lack of insider conviction, makes the current valuation indefensible. The growth is not self-sustaining, and the moat is execution-dependent rather than structural.Our analytical edge is a focus on underlying unit economics and customer cohort data, which indicates a clear path to profitability that is being obscured by the market's simplistic focus on current-period GAAP losses. Specifically, our analysis reveals that the reinvestment efficiency is among the lowest in the fast-casual sector, a fact hidden by management's focus on Adjusted EBITDA.

Core Thesis

CEO Christine Barone brings significant industry experience from Starbucks and True Food Kitchen, but her tenure at Dutch Bros has been marked by a continuation of the dilutive capital strategy. While she has successfully overseen the rollout of Order Ahead and the food pilot, she has yet to prove she can pivot the company toward organic free cash flow generation.Capital allocation skill is poor. Management has issued 568.4 million in stock while simultaneously paying 209.1 million in dividends over the last four years. This strategy of raising expensive equity to fund dividends and low-return projects (1.9% ROIC) is fundamentally value-destructive.Management maintains a polished growth narrative in transcripts, but their credibility is undermined by the pattern of underestimating cost pressures, such as the 110 basis point headwind from coffee costs expected in 2025.<ul><li>Board Independence: 60% (6 of 10 directors)</li><li>Chairman/CEO Roles: Separate (Travis Boersma / Christine Barone)</li><li>Chairman Tenure: 4 Years</li><li>Insider Ownership: 2.69% (Public Class A)</li><li>Shareholder Rights: Declassified Board, Majority Voting</li></ul>The stewardship verdict is negative due to the massive insider selling. We outline the following Governance Outcome Tree: 1. Status Quo: Management continues to dilute shareholders to fund low-ROIC expansion, leading to further share price erosion. 2. Compromise: Board seats are granted to a value-oriented activist who forces a slowdown in unit growth to prioritize FCF. 3. Reset: A strategic review is initiated as the capital markets close to the company, forcing a fire sale of assets. Given the founder's current exit strategy, the Status Quo appears most likely, which is detrimental to new investors.

Leadership & Governance

The valuation floor is set at 25.50, representing the Bear Case DCF Value. This serves as the ultimate backstop in a 'broken growth' scenario where unit expansion fails to drive comparable sales and margins compress to 6%.Revenue grows at a 23.3% blended rate in Year 1, decelerating to 13% by Year 5. Operating margins stabilize at 9%, resulting in a fair value of 45.14.The hot food program drives a 4% sustained comp lift, allowing margins to reach 11% and justifying a Blue-Sky Potential of 62.02.The Bear Case is defined by a scenario of execution failure, such as failing to reach scale or achieve profitability. Competitive pressure and rising costs lead to a valuation floor of 25.50.

Valuation Context

<ul><li>Unexplained revenue deceleration. If system same-shop sales fall below the 2-4% guidance range, the hypergrowth premium will evaporate as the market re-rates the stock toward peer multiples. This would validate our variant perception that the current growth is forced and unsustainable.</li><li>Further equity offerings. Given the negative free cash flow and high CapEx requirements, the company will likely need to tap equity markets again, further diluting existing shareholders.</li></ul>Dutch Bros is at a critical juncture as it laps record 2024 pricing and faces significant labor and commodity headwinds in 2025, all while the founder is aggressively exiting his position.

Catalyst Path & Context

<ul><li>Execution and competitive risk. The primary threat is a failure to achieve product-market fit at scale as the company moves into more competitive Midwest and Southeast markets dominated by Starbucks and Dunkin'. ROIC is currently only 1.9%, indicating that new units are not yet generating returns above the cost of capital.</li><li>Commodity and labor inflation. Rising coffee and dairy costs, combined with California's 25% increase in starting wages, could permanently compress margins. Management expects 110 basis points of COGS pressure from coffee alone in 2025.</li></ul>

Primary Risks

<ul><li>Entry Target: N/A for Sell recommendation.</li><li>Stop Loss: N/A for Sell recommendation.</li><li>Position Size: Sizing is None due to the Sell recommendation. The business exhibits low conviction due to the fundamental disconnect between growth and value creation, further exacerbated by the Early-Stage_Hypergrowth archetype's inherent volatility.</li><li>Time Horizon: N/A for Sell recommendation.</li></ul><ul><li>System same-shop sales growth vs. 2-4% guidance</li><li>Insider trading activity (specifically Travis Boersma)</li><li>Quarterly free cash flow generation</li></ul>The killer is unexplained revenue deceleration. If growth slows significantly without a corresponding improvement in profitability, the Hypergrowth premium evaporates.

Actionable Parameters & Monitoring

Dutch Bros is a value-destructive growth story where aggressive unit expansion is being funded by shareholder dilution and debt, yielding returns far below the cost of capital. The massive insider liquidation by the founder confirms a lack of conviction in the current premium valuation. We recommend a Sell with a final valuation target of 45.64, representing 28.1% downside from current levels.

Final Conclusion

Aggressive unit expansion and transaction-driving initiatives.

Driver

Market pivot from top-line growth metrics to free cash flow and return on capital discipline.

Catalyst

None; the net liquidation value is estimated at 0.00.

Protection

Aggressive unit expansion toward a 4,000-shop TAM; strong digital engagement with 72% loyalty penetration; record system-wide AUVs reaching 2.0 million.

Bull Case

ROIC of 1.9% is far below the 15.0% cost of capital; massive insider selling totaling 1.3 billion; structural reliance on shareholder dilution to fund negative free cash flow.

Bear Case

Dutch Bros is executing an aggressive unit expansion strategy that masks fundamental value destruction, as evidenced by a return on invested capital of 1.9% against a 15.0% cost of capital. The defining context for this investment is a massive lack of insider conviction, with Executive Chairman Travis Boersma and other insiders liquidating over $1.3 billion in stock over the last 12 months, including a $660 million exit in November 2025 alone. While revenue growth remains robust at 28.9%, the business model relies on continuous shareholder dilution and debt issuance to fund a capital-intensive land grab that fails to generate meaningful free cash flow.

From aggressive growth-at-all-costs to balanced growth with profitability focus

Method	Implied Value	Weight	Weighted Value
DCF	$44.45	47%	$20.76
Comps	$46.69	53%	$24.89
Total Weighted			$45.64

BROS

Company Overview

Price History