Meet the Monster Stock That Continues to Crush the Market

Jennifer Saibil, The Motley Fool

Sun, Apr 13, 2025, 3:30 PM 5 min read

The market's been swinging back and forth over the past few days as companies, and investors, try to follow President Trump's tariff directives. Tariffs, tariff changes, and tariff pauses are creating excitement, although not necessarily the enjoyable kind.

During this time, many stocks are proving their worth. Dutch Bros (NYSE: BROS) is the kind of young, risky stock that doesn't usually do well when there's volatility, but it's up 9% this year, while the S&P 500 index is down 10%. Over the past year, it's absolutely crushed the market.

Let's see why Dutch Bros stock is so hot right now and why it should continue to crush the market.

Starbucks' continued struggles should serve as a cautionary tale to any investor. It's not done for at all, but it's gotten so big that it's hard to steer.

What does that have to do with Dutch Bros? The coffee shop chain saw an opportunity to build its brand just as Starbucks was beginning to have a hard time. Dutch Bros is newer, more agile, and has a different vibe. The stock is also cheaper, which means a lot in this economically challenged environment. The founder-leaders took the leap, and the company has been thriving over the past few years. It's only been a public company since 2021, but it's already almost doubled its store count and more than doubled its revenue over the past three years.

Based in Oregon, the company recently surpassed 1,000 stores, mostly located along with West Coast, with a large presence in California. But it's moving across the country at a steady pace, and it's live in 18 states. Customers enjoy its quick and friendly service, ease of ordering, and fun, custom-crafted beverages.

Revenue increased 35% year over year in the 2024 fourth quarter, driven by 32 new shops and a 6.9% increase in same-store sales. Company-operated shop contribution margin, which measures how profitable it is on a store basis, improved by 2.8 percentage points to 21.4%. Net income increased from a $3.8 million loss in the year-ago quarter to positive $6.4 million, and full-year net income increased from $10 million to $66.5 million.

Management sees a huge opportunity ahead, and considering how well Dutch Bros is capturing market share today, it looks like a very compelling thesis.

It recently raised its long-term store total goal from 4,000 to at least 7,000, or seven times the number it has today, with the short-term goal of hitting 2,029 by 2029. That's an incredible opportunity from an investing perspective, especially because comparable sales growth is accelerating, even in the tough economy. It's likely to accelerate more when the environment is more friendly to discretionary spending.