Dutch Bros (BROS) Stock Slides as Market Rises: Facts to Know Before You Trade

Dutch Bros (BROS) ended the recent trading session at $63.71, demonstrating a -3.94% change from the preceding day's closing price. This change lagged the S&P 500's daily gain of 0.28%. Meanwhile, the Dow gained 0.43%, and the Nasdaq, a tech-heavy index, added 0.09%.

The drive-thru coffee chain operator and franchisor's stock has dropped by 7.21% in the past month, falling short of the Retail-Wholesale sector's gain of 0.87% and the S&P 500's gain of 4.37%.

Investors will be eagerly watching for the performance of Dutch Bros in its upcoming earnings disclosure. The company's earnings per share (EPS) are projected to be $0.18, reflecting a 5.26% decrease from the same quarter last year. Meanwhile, our latest consensus estimate is calling for revenue of $401.06 million, up 23.43% from the prior-year quarter.

Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $0.59 per share and revenue of $1.58 billion. These totals would mark changes of +20.41% and +23.35%, respectively, from last year.

Investors should also pay attention to any latest changes in analyst estimates for Dutch Bros. Recent revisions tend to reflect the latest near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the business outlook.

Our research reveals that these estimate alterations are directly linked with the stock price performance in the near future. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, there's been a 2.52% fall in the Zacks Consensus EPS estimate. Right now, Dutch Bros possesses a Zacks Rank of #4 (Sell).

Investors should also note Dutch Bros's current valuation metrics, including its Forward P/E ratio of 111.6. For comparison, its industry has an average Forward P/E of 22.59, which means Dutch Bros is trading at a premium to the group.

Also, we should mention that BROS has a PEG ratio of 3.45. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company's expected earnings growth trajectory. As the market closed yesterday, the Retail - Restaurants industry was having an average PEG ratio of 2.64.

The Retail - Restaurants industry is part of the Retail-Wholesale sector. With its current Zacks Industry Rank of 160, this industry ranks in the bottom 36% of all industries, numbering over 250.

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

Be sure to use Zacks.com to monitor all these stock-influencing metrics, and more, throughout the forthcoming trading sessions.

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This article originally published on Zacks Investment Research (zacks.com).

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