Can this fast-growing coffee chain be a long-term winner?

The Dutch Brothers (NYSE: BROS) Investor attention has increased in recent years. A unique concept and rapid expansion in the United States led to rapid revenue growth and increased recognition, especially at a time when its biggest competitor, StarbucksLooking for ways to revitalize your brand.

However, Dutch Bros. is still a fraction of Starbucks’ size, and consumers have more choices in coffee and beverages. In those cases, can coffee stocks bring investors back, or should they look elsewhere for a caffeine high?

Dutch Brothers stands out in the crowded coffee market. It operates drive-thru coffeeshops, trying to reach customers by adding personal contact between customers and staff, which it calls “broistas”. It also empowers stores to host local events for organizations that focus on giving back its services to communities.

In addition, it has followed customers with espresso and half-and-half based brew drinks. It also offers tea, smoothies, lemonade, energy drinks, and other beverages.

The company has taken this concept nationwide at a fast pace. By the end of the third quarter of 2025, it operated 1,081 stores in 24 states, up from 471 locations when it announced its IPO in 2021.

Amid that growth, Dutch Bros. reported revenue of nearly $1.2 billion in the first nine months of 2025, a 27% year-over-year increase. This includes 5.2% same-store sales growth over the same period, an indication of its growing popularity.

During that period, the company kept cost and expense growth under control. As a result, it generated $58 million in net income in the first three quarters of 2025, an 85% increase from year-ago levels.

That growth helped the stock in early 2025, but over the past year, it’s up just 12%. Valuations may partly explain that slowdown, as Dutch Bros. trades at a 126 P/E ratio, quite high. S&P 500 Average of 31.

However, Dutch Bros aims to grow to 2,029 stores by 2029. Such growth is encouraging for Dutch Bros., but it remains to be seen whether investors are willing to overlook high valuations to buy into this growth story.

Given its rapid growth, Dutch Bros. stock should be a long-term winner.

Of course, the high valuation and competitive nature of Dutch Bros.’s business may give investors pause. Although its rapid growth commands a premium, it also makes the stock’s near-term direction uncertain. Knowing this, investors should gradually accumulate shares when choosing to invest.