Dutch Bros (BROS -6.93%) recently issued new long-term growth targets that have Wall Street analysts raising their near-term price targets for the stock. Wells Fargo analyst Anthony Trainor initiated coverage of Dutch Bros with an overweight (buy) rating and a $80 price target, implying 28% over the current $62.50 share price. Should a long-term investor start a position in the stock right now?

Dutch Bros has lots of room to grow

Dutch Bros stock rocketed to a 52-week high of $86.88 this year. It closed Apr. 2 trading 28% off those highs, bringing its valuation back to a reasonable level. The company said that revenue grew 35% year over year last quarter, with same-shop sales up 6.9%.

Management had previously set its long-term goal at 4,000 locations within 15 years. That would suggest tremendous long-term upside over the 982 locations opened last quarter. However, at a recent investor presentation, management updated its long-term goal to 7,000 shops. The company is aiming for 20% annual revenue growth while growing the number of locations at a mid-teens rate with low-single-digit same-shop sales.

These growth targets should support the stock's current valuation. The shares trade at 5.1 times trailing revenue, which is fair for a fast-growing beverage chain. With the consensus analyst estimate projecting revenue to grow 23% this year, the stock could be trading at $77 this time next year if it's trading at the same multiple of revenue.

Keep in mind that the company experienced inconsistent same-shop sales performance during 2022, when inflation was heating up, so if the economy and consumer spending weaken, the stock could become volatile. There's nothing to prevent the stock from rerating at a lower valuation that sends the stock lower in the near term.

Still, Dutch Bros is clearly growing into a nationwide chain. The stock should continue to grow roughly in line with the company's revenue. Investors that dollar-cost average in the stock should earn excellent returns over the long term.