$4.02
$39.16
bear $4.02
base $20.86
bull $39.16
margin of safety $11.00
market price* $41.16
Dutch Bros runs drive-thru coffee shops: 1,136 at the end of 2025 across 25 states, 811 company-operated and 325 franchised. It sells espresso drinks, its Rebel energy drinks, cold brew and teas, with coffee roasted at its own plants in Grants Pass, Oregon and Melissa, Texas. Revenue grew from $498 million in 2021 to $1.64 billion in 2025, and first-half 2026 revenue of $1.02 billion was up 32%. Most of the growth has come from opening about 150 shops a year (net additions of 160 in 2023, 151 in 2024 and 154 in 2025, with 141 new company shops across 19 states in 2025). Existing shops have also kept selling more. Company-operated shops open at least 15 months averaged $2.06 million in sales in 2025, up from $1.90 million in 2023, even though that group more than doubled in number. Company same-shop sales rose 7.4% in 2025, and the Dutch Rewards app now accounts for 72% of transactions. How we measure earnings. We start from operating cash flow and take out swings in working capital, stock-based pay, and an estimate of the capital spending needed just to keep the business running as it is. We also take out the gap between rent expense and the rent actually paid in cash. Our standard method for separating upkeep spending from growth spending ties growth spending to how much revenue rose. For a company building shops this fast, that method counts about $171 million of 2025's $241 million of capital spending as upkeep, well above the $115 million of depreciation, so it is cautious. On this basis the business earned $12 million for its owners (7 cents per share) in 2024 and $76 million (43 cents) in 2025. From 2021 to 2023 the figure was negative, weighed down by stock awards tied to the September 2021 IPO and by heavy early build-out. Dutch Bros is organised so that the founders and pre-IPO investors own part of the operating company directly. We count all of about 178 million economic units, not just the publicly traded Class A shares, because the cash flows we measure belong to all of them. Starting level. Before interest, the business generated $51 million in 2024 and $115 million in 2025. We start from the midpoint of about $83 million because those are the only two years that reflect today's scale without the heavy IPO-era stock award costs. The stronger first half of 2026 supports the near-term path, but we did not use it to raise that starting level. Owner earnings grew far faster in 2025 than the roughly 3% increase our base case assumes for 2026. Base case, about $20.86 per share. Revenue is about $2.07 billion in 2026, most of it already secured by first-half results and by shops opened in 2025. Openings continue at the demonstrated pace of about 150 a year through 2029, then taper to zero by 2034. The company has kept up this pace every year since 2021 and has paid for it from its own cash flow since 2024. We assume each new shop brings in about $1.8 million, below today's $2.06 million average, to allow for newer markets. Prices at existing shops rise 2% a year through 2035, well below the ticket increases of the last three years. We charge the capital cost of the added revenue plus about $30 million a year of new shop finance leases while building continues. Once building stops, the money spent on new shops stops too. From then on we assume upkeep spending equal to today's depreciation rate of 7% of revenue, against the roughly 17% cash margin before capital spending that the business earned in 2024 and 2025. That gives about a 10% cash margin, held flat in dollars with no growth after 2035. Cash taxes are tiny today because of tax deductions created by the IPO-era share exchanges, and we assume normal taxes from 2041. We gave no credit for the company's long-term shop targets, new menu lines such as hot food, or further margin gains. The business is worth about $4.5 billion in this case. Bear case, about $4.02 per share. Openings slow to 100 a year in 2027 and 2028, each new shop brings in only $1.5 million, and then building stops. This reflects risks the company itself discloses: rising construction and development costs, new markets that may not perform, and ongoing commodity inflation. Prices stay flat, cash margins fall back to about the 2024 level, and upkeep costs more than depreciation. From 2031, sales at existing shops shrink 2% a year as competition and changing tastes wear on the brand. The business is worth about $1.5 billion. Bull case, about $39.16 per share. Openings run at 160 a year through 2031, each new shop matches today's roughly $2.0 million average, and building tapers to zero after 2034. The 2025 cash margin holds. Prices rise 3% a year while building continues and 2% a year after that, in line with ticket increases of 2% to 7% in each of the last three years. The business is worth about $7.8 billion. Debt and other obligations. In every case we subtract about $833 million. That is $200 million of bank borrowing under a credit facility maturing May 29, 2030, plus $411 million of finance leases on shop properties. It also includes about $450 million as today's value of the $821 million owed under tax receivable agreements, which pay pre-IPO owners 85% of certain tax savings as the company realises them over many years. We deduct about $229 million of cash above operating needs. That leaves shareholders about $0.7 billion in the bear case, $3.7 billion in the base case and $7.0 billion in the bull case. Interest of about $39 million a year is covered by cash flow in every case after 2026, and the company held $269 million of cash at June 30, 2026. What could make this wrong. The value rests on two things. New shops must keep bringing in around $2 million a year each as the company moves into newer states, and upkeep spending must fall toward depreciation once expansion slows. The company's 2026 capital budget of $270 to $290 million points to continued building, which fits the base case. If true upkeep spending turns out lower than we assume, the shares are worth more. If tax receivable payments come faster than we assume, or are sped up by a sale of the company, that obligation could approach the full $821 million and would lower each case by about $2 per share. The timing of those payments is not set out in the filings, so the $450 million is our estimate.