Dutch Bros Trades At A Luxury Multiple While Its Cash-Flow Math Does Not Add Up

The market has been willing to give Dutch Bros a growth stock valuation while the company is still doing the growth company thing of spending more to build its business than it generates in cash. That is not inherently a problem - but the multiple at which the market is accepting that trade is. Dutch Bros trades at roughly 32.7 times EV/EBITDA (enterprise value divided by earnings before interest, taxes, depreciation and amortization, a proxy for operating cash earnings), which is nearly double the 18.7 times that Chipotle commands and well above Starbucks at roughly 23.5 times. For a company whose operating cash flow cannot yet cover its own expansion, that premium deserves scrutiny.