Value
4.7/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 1.9 |
| P/S | 7.5 |
| EV/EBITDA | 0.0 |
| Fwd P/E | 3.3 |
| PEG | 4.7 |
| Analyst target | 9.0 |
- ▸Forward P/E: 33.7x
- ▸PEG: 1.76
BROS · Why this verdict
Why Dutch Bros (BROS) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results. How we score · Editorial policy
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VerdictSELL
Overall score6.0/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
Dutch Bros combines 32% revenue growth and a perfect 4-quarter earnings beat streak with 54% analyst upside, but poor cash conversion (2% FCF/NI), heavy insider selling, 49% short interest and a downtrend make it a speculative growth case.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Dutch Bros is growing revenue about 32% YoY and ranks as an industry growth leader, which supports the case that growth can outpace its 32.8x forward P/E. Growth breakdown | Revenue growth stays above 20% YoY over the next 12 months. | →Stable |
| CounterGross margin and net margin component scores are weak (1.0 and 2.5 out of 10), so fast growth may not turn into profit. | ||
Dutch Bros beat estimates in all 4 recent quarters with an average surprise of 25%, and the next report is in 3 days. Earnings | EPS surprise stays positive at the 2026-11-04 report and the following quarter. | ↑Improving |
| CounterEarnings in 3 days is a binary event with 101% implied volatility, and a stock with 49% short interest can drop sharply even on a small miss. | ||
Earnings quality is a red flag with FCF at only 2% of net income and a quality score of 3.7, below the 4.0 floor, so reported profit is not turning into cash. Quality breakdown | FCF to net income rises above 50% as capital spending on new shops slows. | →Stable |
| CounterHeavy expansion capital spending may depress free cash flow temporarily, and the Piotroski F-Score of 6.7 component still shows reasonable fundamentals. | ||
Insiders sold $53.7M over 90 days (0.71% of market cap) across 12 sales with only one small buy, a BEARISH signal despite institutions accumulating. Insider | Insider selling slows below 0.3% of market cap over the next two quarters. | ↓Deteriorating |
| CounterExecutive sales are often pre-planned diversification and say little about the business, and institutions are accumulating. | ||
The analyst target of $59.33 sits 38.4% above the $42.87 price, with 54% analyst upside noted, though price is in a confirmed downtrend. Analyst target | Price moves toward the $59.33 target while holding above the $39.87 stop. | →Stable |
| CounterPrice is below its 200-day average with a slope of -5.8% per 30 days, and a 42% drawdown plus RSI 71 reads as an overbought bear rally. | ||
Dutch Bros is growing revenue about 32% YoY and ranks as an industry growth leader, which supports the case that growth can outpace its 32.8x forward P/E.
→StableGrowth breakdown
- Expectation
- Revenue growth stays above 20% YoY over the next 12 months.
CounterGross margin and net margin component scores are weak (1.0 and 2.5 out of 10), so fast growth may not turn into profit.
Dutch Bros beat estimates in all 4 recent quarters with an average surprise of 25%, and the next report is in 3 days.
↑ImprovingEarnings
- Expectation
- EPS surprise stays positive at the 2026-11-04 report and the following quarter.
CounterEarnings in 3 days is a binary event with 101% implied volatility, and a stock with 49% short interest can drop sharply even on a small miss.
Earnings quality is a red flag with FCF at only 2% of net income and a quality score of 3.7, below the 4.0 floor, so reported profit is not turning into cash.
→StableQuality breakdown
- Expectation
- FCF to net income rises above 50% as capital spending on new shops slows.
CounterHeavy expansion capital spending may depress free cash flow temporarily, and the Piotroski F-Score of 6.7 component still shows reasonable fundamentals.
Insiders sold $53.7M over 90 days (0.71% of market cap) across 12 sales with only one small buy, a BEARISH signal despite institutions accumulating.
↓DeterioratingInsider
- Expectation
- Insider selling slows below 0.3% of market cap over the next two quarters.
CounterExecutive sales are often pre-planned diversification and say little about the business, and institutions are accumulating.
The analyst target of $59.33 sits 38.4% above the $42.87 price, with 54% analyst upside noted, though price is in a confirmed downtrend.
→StableAnalyst target
- Expectation
- Price moves toward the $59.33 target while holding above the $39.87 stop.
CounterPrice is below its 200-day average with a slope of -5.8% per 30 days, and a 42% drawdown plus RSI 71 reads as an overbought bear rally.
Per-dimension breakdown
Quality
3.7/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 4.9 |
| ROA | 2.5 |
| Gross margin | 1.0 |
| Op margin | 5.2 |
| Net margin | 2.5 |
| Current ratio | 5.1 |
| FCF quality | 0.1 |
| Moat | 5.4 |
| Piotroski F | 6.7 |
- ▸Earnings quality RED FLAG: 2% FCF/NI
- ▸No competitive moat
Growth
9.8/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 10.0 |
| EPS growth | 9.5 |
- ▸Strong growth: 32% YoY
Momentum
7.5/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 3.7 |
| MACD | 10.0 |
| OBV | 10.0 |
| MA position | 6.0 |
| Volume | 10.0 |
| vol acceleration | 5.5 |
- ▸Volume accumulation (rising OBV)
- ▸Below 200-MA, MA slope -5.7%/30d — confirmed downtrend
Sentiment
8.1/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 5.9 |
| Analyst rating | 9.0 |
| Price target | 9.5 |
- ▸Analyst upside: 48%
Insider
5.4/10data confidence 100%| Component | Sub-score |
|---|---|
| materiality | 2.0 |
| insider conviction | 2.5 |
| holder change | 10.0 |
| notable moves | 7.0 |
- ▸Heavy insider selling — $53,715,624 (0.696% of mkt cap)
- ▸Institutions accumulating
Peer rank
5.2/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 1.6 |
| quality rank | 5.0 |
| growth rank | 9.7 |
- ▸Industry growth leader
Technical
2.6/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 2.1 |
| support resistance | 1.6 |
| 52w position | 1.9 |
| gap | 5.0 |
Risk (lower is worse)
3.2/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 0.0 |
| days to cover | 6.1 |
| volatility | 2.3 |
| put call | 5.9 |
| implied vol | 0.0 |
| max pain risk | 3.0 |
| beta | 3.6 |
| debt equity | 4.5 |
- ▸High short interest: 49%
- ▸High IV: 108%
- ▸Above max pain $29
Catalyst
8.2/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| surprise avg | 10.0 |
| news activity | 8.0 |
- ▸Strong earnings: 3B/0M
How the verdict was assembled
Engine trigger
Quality below minimum threshold.
Engine technical detail
verdict_path:
L1:HARD_BLOCK:QUALITY_FLOORPassed (6)
- MOMENTUM:7.5>=5.5
- ASYMMETRY:2.2>=1.5
- 8K:CLEAN
- EARNINGS_PROXIMITY:NO_DATE
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- INSIDER:0.70%=HEAVY
Warning (1)
- DEATH_CROSS:momentum=7.5>=5.0 recovering
Reward-to-Risk
2.24
Upside
+33.6%
Downside
15.0%
Sizing output
AVOID
SetupRecovery — Death cross but MACD improving, RSI 63
EdgeNo clear edge — No clear edge identified
SuitabilitySpeculative — Drawdown -41% (>40% off 52w high)
Investment implication
The SELL_IF_HOLDING verdict reflects the INSIDER gate's 0.70%=HEAVY outcome against Growth at 9.8 and asymmetric R:R of 2.24.
The strongest dimensions are Growth at 9.8, Catalyst at 8.2, and Sentiment at 8.1; the weakest are Technical at 2.6, Risk (lower is worse) at 3.2, and Quality at 3.7. The V9 engine flagged 1 failed gate with 1 warning, producing an asymmetric reward-to-risk of 2.24 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Strong Revenue Growth
Trip ifRevenue growth falls below 15% YoY for 2 consecutive quarters.
- P2Perfect Earnings Beat Streak
Trip ifEPS surprise stays below 0% for 2 consecutive quarters.
- P3Weak Cash Conversion
Trip ifFCF to net income stays below 10% for 4 consecutive quarters.
- P4Heavy Insider Selling
Trip ifInsider selling exceeds 1.5% of market cap over 90 days.
- P5Analyst Upside To 59
Trip ifShare price falls below $39.87, the stop level, from the current $42.87.