Jim Cramer says he loves Dutch Bros., but investors should wait for a pullback before buying

• CNBC's Jim Cramer said Thursday he believes investors should wait to buy shares of Dutch Bros. Coffee.
• "I think you can start buying this one if it drops down to $40 on some sort of crazy sell-off," the "Mad Money" host said.

CNBC's Jim Cramer said Thursday he believes investors should wait to buy shares of Dutch Bros. Coffee, the Oregon-based chain that went public a month ago.

"When a great company like Dutch Bros has a super-hyped IPO and the stock explodes higher because people like the product so much, you've got to keep the bat on the shoulder," the "Mad Money" host said, alluding to the fact Dutch Bros. priced its IPO at $23 per share and its stock closed Thursday at $53.

However, Cramer stressed he's a big fan of the company — and its coffee, for that matter — and thinks there's an appropriate level to start snatching up shares.

"I think you can start buying this one if it drops down to $40 on some sort of crazy sell-off. I wouldn't be surprised if it gets there when the lockup on insider selling expires next year," Cramer said.

Founded in 1992, Dutch Bros. grew to 471 shops in 11 states at the end of June. Currently, most are concentrated in the Pacific Northwest and southwestern states like Arizona and into Texas. The stores are drive-thru focused, allowing them to serve a large number of customers without a relatively small physical footprint, Cramer said.

"Long-term, management thinks they can put up 4,000 stores nationwide before they hit saturation. I think that's way too low. I think they can do many more than that," said Cramer, who also touted the company's recent profitability and its 51% year-over-year revenue growth in the first six months of 2021.

"This is a regional-to-national growth story. … Those are the best kind. That means it's all about expansion," he said.

Valuation is the only reason Cramer is not recommending buying the stock now. He said it's trading at 120 times this year's EBITDA projections, which compares to 58 times EBITDA for another fast-growing chain, Wingstop.

"This is one of the rare times that I have to tell you I want you in this stock. I just don't want you in this stock at this price," Cramer said of Dutch Bros.

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