Dutch Bros (NYSE:BROS) continues to grow its revenues rapidly regardless of the macroeconomic weakness. For instance, the operator and franchiser of a food chain reported a 44.1% jump in its Q4 sales. However, BROS stock fell about 5.9% in the after-hours of trade, as its Q4 earnings miss and weak adjusted EBITDA outlook didn’t sit well with investors.
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The company’s revenue of $201.8 million in Q4 surpassed the Street’s estimate of $196.44 million. However, its Q4 adjusted EPS remained flat at $0.03 and came significantly lower than analysts’ expectations of $0.08.
Looking ahead, Dutch Bros expects its revenues to fall between $950 million and $1 billion in 2023. This reflects a year-over-year growth of 29-35%. New shop openings will likely give a significant boost to its top line. Meanwhile, management expects to report an adjusted EBITDA of $125 million. This compares unfavorably with the Street’s expectation of $142 million.
While the company’s adjusted EBITDA outlook was below the analysts’ estimate, let’s check what the Street projects for BROS stock.
Is BROS a Buy or Sell?
BROS stock gained about 35% year-to-date and outperformed the benchmark index. Guggenheim analyst Gregory Francfort rated BROS stock a Hold near the current levels. While the analyst likes the company’s solid unit economics, he recommends that investors wait for a better entry point as the stock has already gained quite a lot this year.
Overall, BROS has received two Buy and five Hold recommendations for a Moderate Buy consensus rating. Meanwhile, analysts’ average price target of $39.57 shows a limited upside potential of 4.16%.
