Dutch Bros Inc. (NYSE:BROS) posted some strong gains recently, and the market responded positively. Our analysis has identified a number of other factors that we believe are good for shareholders.

Check out our latest analysis for Dutch Bros

How do unusual items affect profits?

To fully understand Dutch Bros’ earnings results, we need to consider the US$14 million expense attributed to unusual items. It’s never nice to see unusual things costing the company’s profits, but on the plus side, things may improve sooner or later. We looked at thousands of publicly traded companies and found that unusual items are often one-off in nature. And that’s no surprise since these line items are considered unusual. If Dutch Bros doesn’t see these unusual expenses happen again, all else being equal, we can expect profits to rise in the coming year.

You may be wondering what analysts are predicting in terms of future profitability. Fortunately, you can click here to see an interactive graph showing future profitability, based on their estimates.

Our view on Dutch Bros.’s earnings performance

Because unusual items have had a negative impact on Dutch Bros’ profits over the past year, you can say that we can expect a better result in the current quarter. Based on this observation, we think it likely that Dutch Bros’ statutory profit actually underestimates its earnings potential! Furthermore, the company has done an excellent job of growing earnings per share over the past year. Ultimately, if you want to understand the business properly, it is essential to consider more than just the above factors. In light of this, it is essential that you are aware of the risks if you want to do more analysis of the company. While conducting our analysis, we discovered that Dutch Bros 1 warning sign and it would be unwise to ignore it.

Today we zoomed in on a single data point to better understand the nature of Dutch Bros’ profits. But there are plenty of other ways to substantiate your opinion about a company. For example, many people consider a high return on equity as an indication of favorable business economics, while others like to ‘follow the money’ and look for stocks that insiders are buying. While it may take some research for you, you may be able to find this free collection of companies with high return on equity, or this list of stocks with significant insider positions could be useful.

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This article from Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts using only an unbiased methodology and our articles are not intended as financial advice. It is not a recommendation to buy or sell any stock and does not take into account your objectives or financial situation. We aim to provide you with targeted, long-term analysis based on fundamental data. Please note that our analysis may not take into account the latest price-sensitive company announcements or quality material. Simply Wall St has no positions in the stocks mentioned.