Dutch Bros heads into the final stretch of the quarter with a stock down 24% over the past month, short sellers adding to positions, and analysts cutting targets in a coordinated sweep that tells a story of recalibrating expectations rather than outright capitulation.
The short side has grown meaningfully. Short interest now accounts for 13.5% of the free float, up 5% on the week and 11% over the past month. The step-up happened sharply: positions jumped from around 15.5 million shares in early September to just over 17 million by mid-month and have held near that level since. At roughly 3.9 days to cover, the position is not extreme by squeeze standards, but it is large enough to matter in a down tape. The lending market remains relaxed, with availability running at 192% of short interest, well above the 52-week low of 138%. Borrowing costs have actually eased, falling 20% on the week to 0.51%. The ORTEX short score of 65.1 places BROS in the 11th percentile of its universe, a clear signal that the market's structural lean here is bearish. Options tell a different story: the put/call ratio of 0.40 is notably below its 20-day average of 0.47 and near the 52-week low of 0.37, suggesting that options traders are not rushing to buy downside protection. That divergence, shorts adding while options remain call-heavy, is the tension worth watching.
The Street has not abandoned the bull case, but it is quietly shrinking the price target. Three firms cut their numbers in a span of three days this week alone. JP Morgan maintained Overweight but trimmed to $60 from $75. Oppenheimer held its Outperform but reduced to $66 from $82. DA Davidson, also staying at Buy, moved from $85 to $60. That brings the consensus mean target to $73.83 against a current price of $38.10, a gap that looks generous but reflects the magnitude of recent estimate cuts rather than renewed confidence. The bull case rests on a model with 1,136 drive-thru units, 73% of orders running through the Dutch Rewards loyalty programme, and full-year revenue guidance raised to $2.10 to $2.13 billion. Bears point to the 92% revenue exposure to company-owned units, founder Travis Boersma controlling 75% of voting power, and geographic concentration with roughly 40% of shops in Texas and California. EV/EBITDA has compressed to 13.5x, down slightly over 30 days, and the PE of 30.8x has fallen sharply from above 40x a month ago, the multiple contraction is moving faster than targets.
Fidelity (FMR) remains the largest institutional holder with 12.1% of shares, and its most recent 13G/A amendment, filed in August, showed the stake growing from 10.7% to 12.2%. BlackRock and T. Rowe Price also hold above 10% each, with T. Rowe adding roughly 1.6 million shares as of its September report. Founder Boersma's Schedule 13G/A in August disclosed 25.6% of the class, down from 27.5% previously, reflecting some reduction in his economic stake even as his voting control remains dominant. The insider data carries a caveat worth noting: the 90-day net share figure reflects option exercises and tax-withholding transactions alongside one modest open-market purchase by a director in August of $103,000 worth of stock at $51.56. That purchase, made above current levels, has not been followed by further open-market activity.
The earnings history here sets a high-stakes backdrop for the next print on November 6. The August report produced a one-day decline of close to 20% and a five-day loss exceeding 22%. The comparable event prior to that showed an almost identical pattern. Two consecutive earnings prints with 16% to 19% one-day drops will keep the options market attentive whatever the current PCR suggests, and BROS is now trading more than 25% below where directors were buying in August. Wikipedia attention has ticked above average for the stock's own recent history, with a z-score of 1.4 as of late September, a sign that retail interest is picking up even as the price continues to slide.
With the November 6 print now 37 days out, the key question is whether the target cuts this week represent the full reset or a first instalment, and whether the short position at 13.5% of float finds a catalyst to accelerate or begins to unwind as the stock approaches levels last seen well before the 2025 growth phase.
See the live data behind this article on ORTEX.
Open BROS on ORTEX →ORTEX Market Intelligence content is generated by AI from a snapshot of ORTEX's proprietary data. Content is informational only and does not constitute investment advice.
