BRCB · Black Rock Coffee Bar
Conviction · Low · more likely to lag the S&P 500 over the next three months
Wrong if: a daily close above $11.10
Note written ·
Price against the kill line
2.8% clear of its kill line on the 13 November 2026 close.
How to read this
This note expects the shares to lag the market, so its kill line sits above the price: a close above the red mark would prove the view wrong. Prices run from low on the left to high on the right. The dot is where the stock closed on 13 November 2026, left of the mark while it is below the line; a dot right of the mark has closed through it.
The scale is stretched near the line, so close calls are easy to see. More than 8% from the line, the stock reads well clear, with a hollow dot to show the figure is off the drawn scale.
The kill line is the research note's own test. The portfolio sells on business facts, not on a price. How the portfolio decides
Three months against the kill line
Daily closes, to . Red: the kill line, a daily close above $11.10, on record since 11 November 2026. The shares are up 36.6% since the close; the S&P 500 is down 2.1% over the same sessions. Figures in the note can cover a different window.
Kill line
A daily close above $11.10, the 9 November 2026 close and the highest of the 20 sessions to that date, would show the shares leading the S&P 500. So would fourth-quarter results with an adjusted EBITDA margin above the third quarter's 12.7%.
Research onlyNot in the portfolio.
Key figures from the filings · Consumer Discretionary
Quarter to 30 September 2026, filed 10 November 2026; valuation at the 13 November 2026 close
- Revenue, latest quarter ($M)
- 66.8
- Revenue, change on a year (%)
- +29.7
- Gross margin (%)
- 29.0
- Operating margin (%)
- 4.2
- Free cash flow, four quarters ($M)
- −29.9
- Net cash, cash less debt ($M)
- −25.4
- Price to earnings (×)
- 142.9
- Enterprise value to sales (×)
- 2.4
All filed numbers
What Black Rock Coffee Bar reports to the SEC in its quarterly and annual filings. Each group states its period and filing date once; a figure dated otherwise says so. Built from the filings known on .
| Quarter to | Revenue ($M) | On a year (%) | Gross margin (%) | Operating margin (%) |
|---|---|---|---|---|
| first filed | 66.8 | +29.7 | 29.0 | 4.2 |
| first filed | 63.0 | +25.0 | 30.3 | 6.5 |
| first filed | 55.5 | +23.7 | 29.7 | 4.8 |
| first filed | 53.6 | +25.3 | 29.5 | 3.3 |
| first filed | 51.5 | +24.2 | 29.7 | −12.4 |
| first filed | 50.4 | — | 29.6 | 6.5 |
| Pre-tax income ($M) | 2.0 |
| Net income ($M) four quarters: 3.8 | 1.5 |
| Diluted shares, change on a year (%) against the quarter to 30 September 2025 | +238.4 |
| Operating cash flow ($M) | 34.2 |
| Capital spending ($M) | 64.1 |
| Free cash flow ($M) | −29.9 |
| Cash and short-term investments ($M) | 13.6 |
| Debt ($M) long-term debt | 39.0 |
| Net cash, cash less debt ($M) | −25.4 |
| Deferred revenue ($M) +55.8% on a year | 2.0 |
| Backlog, orders not yet delivered ($M) | Not reported |
| Receivables ($M) | 5.7 |
| Inventory ($M) | 3.6 |
| Shareholders' equity ($M) | 66.0 |
| Market value ($M) | 541 |
| Enterprise value, market value plus net debt ($M) | 566 |
| Enterprise value to sales (×) | 2.4 |
| Enterprise value to operating income (×) | 49.8 |
| Price to earnings (×) | 142.9 |
| Price to book value (×) | 8.2 |
| Free-cash-flow yield (%) | −5.5 |
Short interest (FINRA, settled 15 October 2026, published 26 October 2026): 3.9% of shares outstanding sold short, 7.0 days of average trading to cover, +2.3% since the previous report.
| Window | Bought | Sold |
|---|---|---|
| 90 daysfrom | $0 | $0 |
| 12 monthsfrom | $73.4M | $0 |
The thesis
Black Rock Coffee Bar's shares are more likely to lag the S&P 500 over the next three months. Third-quarter sales were strong, but margins narrowed, borrowing rose and the shares fell sharply after the report. The fourth-quarter results, expected around early March 2027, will show whether margins recover as management says they will.
The company reported on 10 November 2026 that third-quarter revenue rose 29.7% to $66.8 million. Same-store sales rose 5.8%, up from 4.2% in the second quarter, per its 8-K. It reaffirmed 2026 guidance of $255–257 million in revenue and $34–35 million in adjusted EBITDA (earnings before interest, taxes, depreciation and amortization). It also raised planned 2026 openings to 40 from 38. Benzinga reported that revenue missed the $67.424 million consensus and that diluted earnings per share of $0.05 beat the $0.04 estimate.
Profitability moved the other way. The adjusted EBITDA margin was 12.7%, against 13.4% a year earlier. The store-level profit margin was 28.9%, against 29.6%. Investing.com's account of the earnings call reports that labor rose 110 basis points to 22.1% of revenue because of new-store staffing and longer opening hours.
The shares closed at $10.57 on 10 November 2026 and at $8.76 on 11 November 2026, the first full session after the report. The rating is Low. The faster same-store growth eased the main worry about demand. The report raised new questions about margins and funding, and no scheduled event before the fourth-quarter results can settle them.
Bullish and bearish views on Black Rock Coffee Bar, Inc.
The bull case on Black Rock Coffee Bar, Inc. (BRCB), in brief: same-store sales picked up again. The bear case: margins narrowed at both levels.
Bull case
- Same-store sales picked up again. Same-store sales rose 5.8% in the third quarter, 16.6% on a two-year basis, the 15th straight quarter of growth, per the company's 10 November 2026 release. Gurufocus's summary of the call puts transaction growth at 2.4%.
- New stores are opening faster and selling more. The company had 211 stores on 30 September 2026, against 169 a year earlier, and opened 11 in the quarter. Per Investing.com's account of the call, 35 of the 40 planned 2026 openings were open, and the 2026 stores average about $800,000 in sales each, above the $700,000–750,000 the company expected.
- Management expects faster fourth-quarter profit growth. On the 10 November 2026 call, management said it expects fourth-quarter adjusted EBITDA to grow more than 30% and the quarter to have the strongest same-store sales of 2026. Beverage, food and packaging costs fell 100 basis points to 26.8% of revenue.
- The company is now profitable. Third-quarter net income was $2.7 million, against a $16.2 million loss a year earlier. Nine-month net income was $7.7 million, against an $18.1 million loss, per the 10 November 2026 release.
- Two analysts raised targets after the report. DA Davidson raised its target to $13 and kept a Buy rating on 11 November 2026, according to Benzinga. Baird raised its target to $10 the same day, with a Neutral rating.
Bear case
- Margins narrowed at both levels. Adjusted EBITDA margin fell to 12.7% from 13.4%, and store-level margin fell to 28.9% from 29.6%, per the 10 November 2026 release. Management expects the fourth-quarter store-level margin to look similar to the third quarter's.
- Borrowing rose as cash fell. Cash was $13.6 million on 30 September 2026, down from $16.0 million on 30 June 2026, and total debt rose to $38.1 million from $30.6 million. The company has drawn $4.0 million of its $25 million revolving credit line, which was undrawn in June.
- Spending on new stores exceeds cash from operations. The company guides 2026 capital spending to $47–48 million. Operating cash flow was $29.1 million over the first nine months, and cash fell $14.8 million over the same period, per the release.
- Growth is getting more expensive. Pre-opening costs were $1.9 million, or 2.9% of third-quarter revenue. On the 10 November 2026 call, management said good store sites are getting harder to secure in California, building and labor costs are rising, and customers are highly selective about spending.
- The securities lawsuit is still open. Plaintiff-firm notices dated 17 August 2026 describe a class action for 12 September 2025 to 12 May 2026. It alleges that the company understated how much new stores pulled sales from existing ones. The notices link a 30.3% one-day fall to disclosures on 12 May 2026. These are allegations, and no court has ruled on them.
Price setup
The shares closed at $8.76 on 11 November 2026. That is below the 200-day moving average of $10.26 and above the 50-day moving average of $8.52, both as of that close. On 10 November 2026, before the results came out, the shares fell 4.77% to $10.57, according to Investing.com.
The last close is 9.4% above the $8.01 close of 13 August 2026 and 65.2% below the 52-week intraday high of $25.20, set on 4 December 2025. The 52-week closing low was $6.19 on 8 June 2026. The September 2025 public offering priced at $20.00, according to plaintiff-firm notices citing the offering documents.
The price already reflects doubt about margins. The shares fell from $10.57 to $8.76 in the session after a report that reaffirmed every 2026 financial target. Whether the shares hold above the 50-day average shows if that doubt deepens.
Catalysts ahead
- ~3 March 2027 (est.): Fourth-quarter and full-year 2026 results, with the first 2027 outlook. These results show whether fourth-quarter adjusted EBITDA grew more than 30% as management expects, whether margins stopped narrowing, and how the company will pay for 2027 openings, including 15–20 in California.
What would change the view
A daily close above $11.10, the 9 November 2026 close and the highest of the 20 sessions to that date, would show the shares leading the S&P 500. So would fourth-quarter results with an adjusted EBITDA margin above the third quarter's 12.7%.
What it trades with
Black Rock Coffee Bar belongs to the consumer-discretionary group on this site, alongside the restaurant chain Portillo's. Its largest moves follow its own reports. The shares fell 30.3% on 12 May 2026, according to plaintiff-firm notices, and dropped again after the 10 November 2026 report.
Consumer spending is the main shared factor. Management said on 10 November 2026 that customers are highly selective about spending. Transaction growth of 2.4% in the third quarter is the measure of demand that would weaken first if consumers cut back.
The evidence, claim by claim (8)
- Q3 2026 revenue was $66.8 million, up 29.7%. Same-store sales rose 5.8%, against 4.2% in Q2 and 10.8% in Q3 2025, and 16.6% on a two-year basis. Black Rock Coffee Bar Q3 2026 earnings release (8-K Exhibit 99.1) · as of
- Q3 2026 adjusted EBITDA was $8.5 million, up 22.1%, at a 12.7% margin against 13.4%. Store-level profit margin was 28.9%, against 29.6%. Black Rock Coffee Bar Q3 2026 earnings release (8-K Exhibit 99.1) · as of
- 2026 outlook: revenue of $255–257 million and adjusted EBITDA of $34–35 million reaffirmed, openings raised to 40 from 38, mid-single-digit same-store sales growth, and capital spending of $47–48 million. Black Rock Coffee Bar Q3 2026 earnings release (8-K Exhibit 99.1) · as of
- On 30 September 2026, cash was $13.6 million and total debt $38.1 million, with $4.0 million drawn on the $25 million revolving credit facility. Black Rock Coffee Bar Q3 2026 earnings release; Form 10-Q for the period ended 30 September 2026 · as of
- The company had 211 stores at the end of Q3 2026, against 169 a year earlier, and opened 11 during the quarter. Black Rock Coffee Bar Q3 2026 earnings release (8-K Exhibit 99.1) · as of
- Management expects Q4 2026 adjusted EBITDA growth above 30%, with a store-level margin similar to Q3. Labor rose 110 basis points to 22.1% of revenue in Q3. Q3 2026 earnings call, 10 November 2026 (Investing.com transcript) · as of
- Q3 revenue of $66.755 million missed the $67.424 million estimate, and diluted EPS of $0.05 beat the $0.04 estimate. Benzinga, 10 November 2026 · as of
- After the Q3 report, DA Davidson raised its target to $13 (Buy) and Baird raised its target to $10 (Neutral). Benzinga analyst headlines, 11 November 2026 · as of
Sources
- Black Rock Coffee Bar, Inc. - Form 8-K - FY2026 · sec.gov ·
- Black Rock Coffee Bar, Inc. - Form 10-Q - FY2026 · sec.gov
- Earnings call transcript: Black Rock Coffee Bar tops Q3 2026 EPS forecast · investing.com ·
- Black Rock Coffee Bar Inc (BRCB) Q3 2026 Earnings Call Highlights: 30% Revenue Growth, 15th Straight Positive Comps and Raised Store Guidance · gurufocus.com
- Black Rock Coffee Bar, Inc. Reports Third Quarter 2026 Results · manilatimes.net ·
- Black Rock Coffee Bar, Inc. - Form 8-K - FY2026 · sec.gov
- newsfilecorp.com
- Barchart
Related · shared themes
ARHS
Arhaus
Arhaus's furniture orders are running far ahead of deliveries, giving the shares a modest edge over the S&P 500: Q3 2026 comparable written…
CVNA
Carvana
Carvana is taking share in a flat used-car market, with third-quarter retail units up 39% and more units guided for the fourth quarter. The…
FIGS
FIGS
FIGS, the healthcare-apparel maker, holds a modest edge over the S&P 500 after beating third-quarter estimates and raising its 2026 outlook…
OLLI
Ollie's Bargain Outlet Holdings
Ollie's Bargain Outlet shares are modestly more likely than not to beat the S&P 500, supported by a $500 million buyback and three analyst…
See also · stocks to watch