Dutch Bros (NYSE:BROS) Shows High Growth Momentum and Bullish Technical Setup

For investors looking to join solid core business progress with positive chart formations, a multi-layered screening process can be very useful. One way is to select stocks that display three main traits: a high growth momentum profile, sound technical condition, and a favorable price formation. This process tries to find firms that are not only reporting faster earnings and sales but are also placed in the market's leading group and trading in a way that indicates a possible price move upward is close. DUTCH BROS INC-CLASS A (NYSE:BROS) results from this kind of screen, making an argument for investors using this systematic method.

Fundamental Growth Momentum

The center of the high growth momentum process is finding companies with forceful and frequently speeding financial results. Dutch Bros displays a number of these important qualities, giving it a ChartMill High Growth Momentum Rating of 6. This rating combines different growth and momentum elements into one number.

• Solid Earnings Path: The company's earnings per share (EPS) growth over the previous twelve months is 37.5%. More notably, the pattern in recent quarters displays large year-over-year gains: 75.0% three quarters ago, 55.6% two quarters ago, 36.8% last quarter, and 18.75% in the latest quarter. While the consecutive speed has eased from very high points, the growth stays clearly positive.
• Steady Revenue Growth: Top-line growth is equally sound, with revenue rising 28.9% over the last year. Quarterly sales growth has been steadily over 25% for the past four quarters.
• Profitability Growth: A main sign of a developing growth company is growing profit margins. Dutch Bros shows clear advancement here, with its profit margin in the last reported full year at 2.75%, a large rise from 0.18% the year before. This shows the company's fast store growth is turning more efficiently into net income.
• Analyst Trust and Performance: The company has a flawless history of surpassing both earnings and revenue projections over the last four quarters, with an average earnings surprise of over 75%. Also, analysts have been increasing their projections, with the average EPS forecast for the next year adjusted higher by 0.21% over the last three months.

These elements together describe a company performing its growth plan, changing sales into profits, and regularly beating market forecasts, all key features wanted by momentum investors.

Technical Condition and Market Standing

A solid fundamental narrative must be supported by price movement. According to the ChartMill Technical Report, Dutch Bros receives a Technical Rating of 7, showing good technical condition. This rating assesses the stock's trend, comparative performance, and place compared to important moving averages.

• Constructive Trend Formation: The report states that while the long-term trend is neutral, the short-term trend is positive, indicating the stock is gaining approval with traders. The stock is trading above its 20, 50, and 100-day simple moving averages, which are all increasing, a typical signal of positive near- to medium-term momentum.
• Market Outperformance: Inside the competitive Hotels, Restaurants & Leisure field, BROS does better than 80% of its 132 competitors. Its 12-month performance also beats 72% of the wider market, though it has fallen behind the S&P 500's recent advance to new highs.
• Important Support and Resistance: The technical examination finds several key price points. Immediate support is grouped between $57.83 and $58.28, made by a mix of moving averages and trendlines. On the higher side, the closest notable resistance area starts at $62.01.

The Formation for a Possible Price Move

Maybe most interesting for a tactical investor is the stock's present chart formation. Dutch Bros has a Setup Rating of 7, which measures the quality of a pause or base pattern. The report says that "prices have been consolidating lately and the volatility has been reduced."

• Pause Close to Highs: After a solid advance earlier in the year, the stock has been trading in a set band over the past month, between about $49.52 and $62.95. It is now trading near the top of this band.
• Clear Risk and Entry: The mix of a definite resistance level at $62.01 and support near $58.28 forms a clear possible trading situation. A clear move above resistance could show a price move upward and continuation of the rising trend, with the support area below giving a sensible place to set a protective stop-loss order.
• Fit with Process: This formation is exactly what the screening method looks for: a fundamentally solid company in a technical upward trend, holding in a pause that gives a clear entry point following a price move upward. It lets investors join with the existing momentum while controlling risk through set price points.

Conclusion

Dutch Bros Inc. shows a meeting of growth and technical method. The company's speeding financial measures, growing profitability, and steady outperformance versus projections supply the fundamental drive. At the same time, its positive short-term trend, field-leading comparative performance, and narrow pause near resistance show a chart formation that technical traders often prefer. For investors using a process that selects for high growth momentum joined with practical technical formations, BROS justifies further examination.

This examination was built on a particular screen for stocks with a High Growth Momentum Rating over 4, a Technical Rating over 7, and a Setup Rating over 7. You can find more possible choices that match these standards by using the High Growth Momentum Breakout Setups screen.

Disclaimer: This article is for information only and does not form investment guidance, a suggestion, or an offer to buy or sell any security. The examination is based on data and tools given by ChartMill, and past results are not a guide for future outcomes. Investors should do their own research and think about their personal financial position and risk comfort before making any investment choices.