Dutch Bros (BROS -0.08%) shares are soaring, up 87% just in the past three months. Investors are clearly energized about the company's prospects. Starbucks (SBUX 1.49%) shares are on the upswing as well. Bringing in a top restaurant executive to lead the business has sparked investor enthusiasm.

Between these two, which is the top coffee stock to buy right now? The answer might surprise you.

Betting on growth

Dutch Bros is making a name for itself thanks to its customer service and highly customizable menu that's offered through a store base of mostly drive-thru locations. The company's growth is attracting a lot of attention.

Revenue in the third quarter of 2024 of $338 million was 160% higher than in the same period three years before. This was mainly driven by a rapidly expanding store footprint. Dutch Bros currently has 1,000 locations, double the number at the end of Q3 2021.

Over the next 10 to 15 years, executives think there's potential to have 4,000 stores open. Growing locations more than fourfold would certainly lead to tremendous revenue gains. Management likely sees opportunity to penetrate more of the U.S. After all, Dutch Bros is only in 18 states right now, so there's a lot of room just in this country, let alone internationally.

The market loves a good growth story. And Dutch Bros is benefiting. Its shares have jumped 87% since last November. But that means the valuation isn't too compelling. The stock trades at a price-to-sales (P/S) ratio of 4.9, its most expensive level in about three years.

Of course, if Dutch Bros is able to execute on its huge ambitions, then the current valuation might be worth it for growth-oriented investors. That's far from a certainty, though, as the business likely hasn't developed durable competitive advantages yet given its relatively small size.

Hoping for a turnaround

Dutch Bros is getting all the love, but investors shouldn't forget about the longtime leader in the industry. Starbucks has been dominating the retail coffee market, with its 17,049 stores in the U.S. and 40,576 in total worldwide. And it generated $9.4 billion in revenue in its latest fiscal quarter, 28 times higher than the smaller rival.

To be clear, though, Starbucks has been struggling to drive greater foot traffic. As a result, same-store sales (SSS), a critical metric, dropped for the fourth straight quarter in Starbucks' fiscal first quarter of 2025 (ended Dec. 29, 2024). Brian Niccol, the hot-shot former CEO of Chipotle Mexican Grill who led the Tex-Mex chain to monster success in recent years, is now the top man at the coffeehouse chain. He's already taking steps to improve the customer experience and make Starbucks locations a popular place to be.

The company's economic moat is something investors shouldn't forget about. Despite its latest challenges, the Starbucks brand still holds tremendous value on a global stage. Having consumer mindshare is valuable, especially in a crowded industry. It also helps with pricing.

Starbucks' massive scale gives it an advantage as well. It has more leverage on every dollar spent on marketing or on making digital upgrades, while being able to flex its buying power with suppliers.

I think it's valid to say that Dutch Bros doesn't possess the same competitive advantages that Starbucks has built up over the years. This offers investors more confidence that the latter has a lower likelihood of becoming irrelevant, giving it staying power.

As of this writing, the stock trades at a P/S ratio of 3.4, which is 31% below that of Dutch Bros. Starbucks definitely looks like the safer bet, given its leading position in the industry and economic moat. For investors who are more comfortable taking on extra risk, then I can understand why Dutch Bros catches your eye.