We recently published a list of 10 Best Growth Stocks Under $100 to Buy Now. In this article, we are going to take a look at where Dutch Bros Inc. (NYSE:BROS) stands against other best growth stocks under $100 to buy now.
Growth stocks are shares of companies which are expected to grow their revenue and earnings at a faster rate than the market average. These companies typically reinvest profits into expansion rather than paying dividends, aiming for long-term capital appreciation. Their high growth, however, tends to be priced at high valuations by the markets, making them significantly more expensive (in terms of P/E multiple, for example) than their more mature, value counterparts. As a result, the performance of growth stocks often depends on general market sentiment—during economic expansions, these stocks tend to outperform as their high growth expectations translate into reality, and their valuation multiple tends to expand; conversely, upon the slightest headwind or macroeconomic uncertainty, their growth and valuation multiple plummet.
READ ALSO: 12 Best Growth Stocks Under $25 to Buy Now
Growth stocks had a strong period of relative outperformance during 2021, as the zero-interest-rate environment, coupled with government stimulus, facilitated unprecedented growth in many industries, especially the consumer-related ones. This strong expansion fueled inflation, and as a result, growth stocks were hit hard by interest rates rising to more than 5% in the US – 2022 was a bad year for the US stock market and especially growth stocks. However, 2023 brought in a whole new growth story for the global markets – not only did the US economy adjust to the new regime of higher interest rates, but also the proliferation of AI megatrend created whole new giant markets and reinvestment opportunities across different sectors, ranging from software developers, semiconductor equipment manufacturers, automation players, and ending with water management, cooling and other infrastructure needed to support the future AI framework around the world.
The aforementioned developments led to a particularly strong 2023-2024 for the broad market and especially for growth stocks. Market valuations, as well as stock market concentration, reached close to record highs, as investors’ optimism in the “Roaring 2020s” scenario and the tremendous AI growth opportunities far outweighed potential recession fears and the negative impact of still elevated interest rates. The high valuation of the entire market, and particularly that of growth stocks, tends to coincide with the length of the horizon that the markets expect the economy to grow undisrupted with little to no risk. However, the new Trump 2.0 regime puts the previous growth scenario at risk—the “Roaring 2020s” scenario, which assumed significant economic acceleration due to onshoring, government stimulus, and huge productivity gains from AI, is now threatened by big cuts in federal financing of many large projects, as well as by the newly established tariffs potentially fueling a second wave of inflation, which will, in turn, require even higher interest rates in the economy.
The threats are confirmed by several forward-looking indicators and surveys, such as business conditions and CapEx outlook from the management of both large and small businesses, as well as by a new wave of layoffs going on in February. While the layoffs in the public sector were largely expected, February 2025 data also shows accelerating layoffs in the retail and technology sectors, which indirectly signals a weaker economy ahead. It is of no surprise that the broad US market sold off in the last few weeks, with many technology leaders down significantly from their 2024 peaks. We believe that attractive investment opportunities arise at times when fear and doubt take over the investors’ sentiment and lead to cheaper valuations for many growth stocks that would eventually recover as the challenges are navigated.
Our Methodology
We define growth stocks as those that have the potential to deliver future growth significantly above the average company in the universe. Consequently, we use Finviz to filter stocks that trade under $100 and have expected EPS compounded annual growth rate (CAGR) of at least 20% for the next 5 years. For all the companies, we also include the number of hedge funds having stakes in them, according to Insider Monkey’s Q4 2024 database. The stocks are ranked in ascending order of hedge funds having stakes in them.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
A closeup of a customer tasting a freshly-made cold brew coffee product from the company’s shop.
Dutch Bros Inc. (NYSE:BROS)
Number of Hedge Fund Holders: 41
Expected EPS CAGR in the next 5 years: 26.69%
Dutch Bros Inc. (NYSE:BROS) is a drive-thru coffee chain operating primarily in the United States, known for its specialty coffee, energy drinks, teas, and smoothies. The company differentiates itself through a fast-paced service model, a loyal customer base, and a unique culture centered around friendly interactions. BROS operates company-owned and franchised locations, with a focus on expanding its footprint across multiple states. Its product lineup includes proprietary beverages such as the Blue Rebel energy drink, alongside a variety of flavored coffee and non-coffee options. The company’s growth strategy emphasizes new store openings, brand engagement, and a strong emphasis on drive-thru convenience.
Dutch Bros Inc. (NYSE:BROS) delivered outstanding revenue growth of 33% in 2024, driven by 18% new shop growth with 151 new shop openings and 5.3% system same-shop sales growth. The company demonstrated strong Q4 performance with 6.9% same-shop sales growth and the largest quarterly transaction growth since 2022. Company-operated same-shop sales grew impressively at 9.5% in Q4. The company achieved system-wide AUVs of $2 million, maintaining the record posted earlier in the year. Mobile order functionality has been successfully implemented across approximately 96% of system shops and 99% of company-operated shops, contributing to approximately 8% of the channel mix by the end of the year.
For 2025, Dutch Bros Inc. (NYSE:BROS) expects to open at least 160 new shops, representing system growth of 16%, with projected total revenues between $1.555 billion and $1.575 billion, representing approximately 21% to 23% growth year-over-year. The company anticipates adjusted EBITDA to be between $265 million and $275 million, representing 15% to 20% growth YoY, despite expected headwinds from elevated coffee costs. With such strong management guidance in place, BROS is one of the best growth stocks under $100.
Overall, BROS ranks 10th on our list of best growth stocks under $100 to buy now. While we acknowledge the potential of BROS as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than BROS but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.