DailyPlay – Opening Trade (BROS) – October 22, 2025

BROS Bearish Opening Trade Signal

Investment Rationale

Investment Thesis
Dutch Bros Inc. (BROS) is setting up for a potential downside move as the company approaches its upcoming earnings report on Wednesday, November 5th. While the brand continues to expand its footprint within the specialty coffee market, the stock’s lofty valuation and slowing margin profile suggest the current rally may be short-lived. With sentiment already cautious across the restaurant sector amid elevated input costs and weaker discretionary demand, BROS appears vulnerable to a post-earnings pullback as investors reassess its premium valuation against muted profitability metrics.

Technical Analysis
BROS has recently rallied back toward the key $57.50 resistance level, an area that has consistently capped price advances since mid-summer. The stock remains positioned below both its 50-day and 200-day moving averages, reflecting sustained longer-term weakness despite the short-term recovery from oversold conditions. Notably, inside the OptionsPlay platform yesterday a “Bearish Trend Following” alert was generated, highlighting that it has recently experienced a rally within a longer term bearish trend that may provide a favorable risk/reward for a bearish trade. With relative strength still weak (2/10) and momentum beginning to stall beneath resistance, a renewed decline toward the $35 downside target appears probable if selling pressure intensifies following earnings.

Fundamental Analysis
While BROS demonstrates strong growth characteristics, its profitability and valuation metrics remain materially stretched relative to peers. The company’s forward multiple implies an excessive premium for its earnings trajectory, leaving little room for disappointment as operating costs remain elevated.

• Forward PE Ratio: 61.08x vs. Industry Median 23.51x
• Expected EPS Growth: 32.65% vs. Industry Median 8.90%
• Expected Revenue Growth: 24.16% vs. Industry Median 6.11%
• Net Margins: 3.94% vs. Industry Median 12.57%

Options Trade
A defined-risk bearish setup can be structured using a Put Vertical Spread, specifically buying the Nov 21, 2025 $57.5/$47.5 Put Vertical for approximately $3.67.. This position risks $367 to potentially earn $633, offering an attractive 1.7:1 reward-to-risk ratio if BROS trades below $47.50 by expiration. The spread benefits from both directional downside and potential post-earnings volatility compression. this trade provides a balanced way to express a bearish thesis into earnings while controlling downside exposure.

BROS – Daily

Trade Details

Strategy Details

Strategy: Long Put Vertical Spread

Direction: Bearish Debit Spread

Details: Buy to Open 5 BROS Nov 21 $57.50/$47.50 Put Vertical Spreads @ $3.67 Debit per Contract.

Total Risk: This trade has a max risk of $1,835 (5 Contracts x $367) based on a hypothetical $100k portfolio risking 2%. We suggest risking only 2% of the value of your portfolio and divide it by $367 to select the # contracts for your portfolio.

Trend Continuation Signal: This is a bearish trade on a stock that is expected to continue lower over the duration of this trade.

1M/6M Trends: Mildly Bullish/Bearish

Relative Strength: 2/10

OptionsPlay Score: 118

Stop Loss: @ $1.84 (50% loss of premium)

View BROS Trade

Entering the Trade

Use the following details to enter the trade on your trading platform. Please note that whenever there is a multi-leg option strategy, it should be entered as a single trade. 

PLEASE NOTE that these prices are based on Tuesday’s closing prices. Should the underlying move significantly during the pre-market hours, we will likely adjust the strikes and prices to reflect a more accurate trade entry. 

View BROS Trade