12 Best Restaurant Stocks to Buy According to Hedge Funds

9. Dutch Bros Inc. (NYSE:BROS)

Number of Hedge Fund Holders: 41   

Dutch Bros Inc. (NYSE:BROS) is a drive-thru coffee shop operator and franchisor that specializes in handcrafted beverages. The company’s artisan beverage-focused selection includes tea, lemonade, smoothies, cold brew coffee products, hot and cold espresso-based beverages, and proprietary energy drinks. The company has two reportable operating segments: company-operated shops and franchising. Its primary source of revenue is from Company-operated shops.

In the first quarter, Dutch Bros Inc. (NYSE:BROS) achieved solid results, with total revenue jumping 29% year over year due to strong same-store sales, transaction growth, and ongoing shop expansion. While maintaining strong levels of effectiveness, the company established 30 new stores throughout the quarter, intending to accelerate growth in the second half of the year. The business launched its 1,000th site in Orlando, Florida, marking a key milestone as it moves closer to its strategic target of 2,029 stores by 2029, which is backed by strong market planning and real estate activities. The Dutch Rewards program accounted for 72% of system transactions, a 5-point increase from the previous year, showing rising brand loyalty and new levels of customer engagement. Financially, adjusted EBITDA grew 20% year on year, displaying great cost control and operational efficiency.

Barclays maintained its Overweight rating on BROS and increased its price objective from $76 to $82. In a research note, the analyst informs investors that the company’s traffic momentum is expected to continue into Q2 and that its Q1 offered margin and EBITDA upside. The company purchases Dutch Bros Inc. (NYSE:BROS) stock on any weakness.