Shares of upstart coffee and hand-crafted beverage chain Dutch Bros (NYSE: BROS) are down 23% over the last month after the company reported underwhelming earnings on Aug. 7.

Now guiding to open “only” 150 stores, versus previous plans for 165 in 2024, Dutch Bros felt the wrath of the market. Following this earnings report, however, TD Cowen analyst Andrew Charles reiterated a buy rating and set a $47 price target over the next year for Dutch Bros, implying a 44% upside.

Here’s why I can’t help but agree with this optimistic outlook, at least over the long term.

Dutch Bros is poised to rebound

One of the main reasons Charles cited for maintaining a buy recommendation was that Dutch Bros is currently implementing mobile ordering across all of its stores. Management hopes to have this process in place at more than half of its 900 stores by the end of the year, which could significantly boost the company’s throughput.

Not only is mobile ordering a no-brainer move, with speed being a core value for the company, but it pairs flawlessly with its Dutch Rewards program, which already accounts for 67% of sales. Furthermore, the majority of Dutch Bros’ locations include “escape lanes,” which would be perfect for mobile orders, as a runner could bring the drinks out to the extra lane, letting the customer skip the line on drive-thru orders.

Is now the time to buy?

As promising as this mobile ordering implementation could be in the short term, management’s stretch goal of 4,000 stores by 2038 could really turn the business into a growth stock over the long haul. Currently, 75% of Dutch Bros’ locations are in just five states, highlighting the massive expansion opportunity.

Despite this growth potential, the company boasts a 17% cash from operations (CFO) margin. Simply put, if the company didn’t spend all of the cash it generated on building new stores, it would be creating gobs of free cash flow. Trading at just 13 times CFO — compared to Starbucks’ mark of 17 — Dutch Bros’ growth story seems to be available at a discount.

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Josh Kohn-Lindquist has positions in Dutch Bros. The Motley Fool recommends Dutch Bros. The Motley Fool has a disclosure policy.