Dutch Bros.: Jim Cramer says investors should wait for a pullback before buying

CNBC's Jim Cramer mentioned Thursday he believes investors should wait to purchase shares of Dutch Bros. Coffee, the Oregon-based chain that went public a month in the past.

"When a great company like Dutch Bros has a super-hyped IPO and the stock explodes higher because people like the product so much, you've got to keep the bat on the shoulder," the "Mad Money" host mentioned, alluding to the actual fact Dutch Bros. priced its IPO at $23 per share and its inventory closed Thursday at $53.

However, Cramer burdened he's a large fan of the corporate — and its espresso, for that matter — and thinks there's an applicable degree to begin snatching up shares.

"I think you can start buying this one if it drops down to $40 on some sort of crazy sell-off. I wouldn't be surprised if it gets there when the lockup on insider selling expires next year," Cramer mentioned.

Founded in 1992, Dutch Bros. grew to 471 retailers in 11 states on the finish of June. Currently, most are concentrated within the Pacific Northwest and southwestern states like Arizona and into Texas. The shops are drive-thru centered, permitting them to serve a giant variety of clients with out a comparatively small bodily footprint, Cramer mentioned.

"Long-term, management thinks they can put up 4,000 stores nationwide before they hit saturation. I think that's way too low. I think they can do many more than that," mentioned Cramer, who additionally touted the corporate's latest profitability and its 51% year-over-year income development within the first six months of 2021.

"This is a regional-to-national growth story. … Those are the best kind. That means it's all about expansion," he mentioned.

Valuation is the one purpose Cramer just isn’t recommending buying the inventory now. He mentioned it's buying and selling at 120 occasions this 12 months's EBITDA projections, which compares to 58 occasions EBITDA for one other fast-growing chain, Wingstop.

"This is one of the rare times that I have to tell you I want you in this stock. I just don't want you in this stock at this price," Cramer mentioned of Dutch Bros.

Jim Cramer analyzes Dutch Bros. Coffee, says the inventory is simply too scorching to suggest proper nowMad Money with Jim Cramer

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