2 Growth Stocks Down Over 20% to Hold for 10 Years
On Holding (NYSE:ONON) and Dutch Bros (NYSE:BROS) have seen their shares fall over 20%. On reports 17.8% sales growth and record gross margins, maintaining full pricing. Dutch Bros sees 30% revenue growth and strong shop performance, with plans to expand locations. Both companies are expected to deliver long-term earnings growth.
How this was made
The 30-second read
Why it matters
Both companies show strong operational metrics but face short-term price pressure; investors may consider them for long-term holds.
Market read
Provides a perspective on valuation and growth potential for two heavily discounted US-listed growth stocks.
What to watch
On Holding's record gross margin and Dutch Bros' high contribution margins suggest resilience not fully priced in.
Background
The article discusses two growth stocks that have fallen over 20% and evaluates their long-term prospects.
Ticker impact
On Holding shares fell 7.5% after Q3 results and are down 24% YTD, with sales growth below outlook.
likely modest upside over the next decade as earnings grow, but short-term pressure remains.
Earnings miss and guidance below expectations drive near-term downside; forward P/E of 17 and 25% earnings growth suggest long-term upside.
Dutch Bros stock down 43% YTD, Q3 revenue grew 30% to $550M, with expansion plans to 2,029 stores by 2029.
possible gradual recovery as new stores generate cash flow, but volatility may persist.
Robust top-line growth and high contribution margins support a longer-term upside despite current discount.
Market effects
Highlights challenges for growth-oriented consumer discretionary stocks amid higher discounting.
US-listed consumer stocks may see broader pressure as investors reassess valuation multiples.
Limited; primarily relevant to investors tracking US growth stocks.
Counterpoint
Long-term fundamentals and margin expansion could make these stocks attractive entry points despite current declines.
Key entities
- companyOn Holding
Swiss premium footwear and apparel maker listed on NYSE as ONON.
- companyDutch Bros
US drive‑thru coffee chain listed on NYSE as BROS.
