Actions of Dutch brothers (NYSE: BROTHERS) have soared 71% year-to-date as of Dec. 4, with most of its gains coming following the company's third-quarter earnings report on Nov. 6.
Some investors might be hesitant to jump in after the recent share price surge, especially with the stock price at 187 times. winnings.
Missing the morning scoop? Wake up with Breakfast News in your mailbox every market day. Register for free »
However, there is a chart that shows the stock still has huge upside potential, even after its recent rally.
Dutch Bros is reinvesting most of its profits back into the company by opening more locations in the United States. It operates with a low net profit margin of just 3.7% last quarter. That's normal for small restaurant operators, but it also means investors need to look at other metrics to know the stock's true value.
Here is a comparison of price/sales (P/S) ratios of Starbucks (NASDAQ:SBUX) and Dutch Bros on their respective business histories. As you can see, in its three years as a public company, Dutch Bros stock has traded well within the P/S multiple range that Starbucks has experienced in its 30 years of operation. business history.
In fact, Starbucks stock has grown at close to its annual revenue growth rate over the past 30 years. An investor who invested $10,000 in Starbucks on December 4, 1994 would have $1.2 million today, excluding dividends.
With revenue growth and expansion key to Starbucks' decades of earnings, this explains why investors were so excited about Dutch Bros' 28% year-over-year revenue growth in the third quarter. The company had 950 stores open in just 18 states at the end of the quarter, but it will likely open hundreds, if not thousands, of additional stores in the United States over the coming decades.
Have you ever felt like you missed the boat by buying the best performing stocks? Then you will want to hear this.
On rare occasions, our team of expert analysts issues a “Doubled” actions recommendation for businesses that they believe are on the verge of collapse. If you're worried that you've already missed your chance to invest, now is the best time to buy before it's too late. And the numbers speak for themselves:
-
Nvidia: If you invested $1,000 when we doubled down in 2009, you would have $376,143!*
-
Apple: If you invested $1,000 when we doubled down in 2008, you would have $46,028!*
-
Netflix: If you invested $1,000 when we doubled down in 2004, you would have $494,999!*
#Dutch #Bros #shares #expensive #table #change #mind
,
