Stocks had a banner year in 2021; most Oregon companies didn’t keep up

view original post

This is Oregon Insight, The Oregonian’s weekly look at the numbers behind the state’s economy. View past installments here.

Wall Street enjoyed a sensational year in 2021, casting off the pandemic recession — if not the pandemic itself — and capitalizing on low interest rates and boundless investor optimism. The S&P 500, a broad measure of the market’s performance, surged an astonishing 27% last year.

Stocks in Oregon and southwest Washington, by contrast, were a decidedly mixed bag. Most underperformed the market in 2021, and several suffered steep declines.

And while Oregon had its first big stock offerings since 2004, the fortunes of the region’s five newly public companies diverged sharply. Two surged and two slumped, underscoring the risks inherent in going public.

Here’s a look at some of the regional businesses that experienced the biggest changes in stock price last year, and how other prominent businesses fared.


Not only was Dutch Bros the state’s best-performing stock last year, the drive-thru chain from small-town Grants Pass registered the biggest initial public offering in Oregon history.

Dutch Bros raised $550 million in its September IPO, the first Oregon company to raise at least $100 million in its public offering since 2004. And the stock just kept climbing.

Debuting at $23 a share, Dutch Bros’ surged 60% on its first day and soared above $81 in subsequent weeks. The stock finished the year at $50.91, well over double its IPO price.

Investors love Dutch Bros, which enjoys low overhead costs operating its tiny kiosks and fanatical enthusiasm from its customers. It’s not just coffee — nearly a quarter of Dutch Bros’ sales come from its own Blue Rebel line of energy drinks.

Dutch Bros aspires to grow from 370 stores at the end of 2019 to more than 650 at the end of next year, and someday to more than 4,000.

“With high-quality hand-crafted customizable beverages served solely through its drive-thru format by energetic and friendly ‘broistas,’ Dutch Bros has hit upon a winning formula delivering all-day appeal while providing convenience alongside impressive customer service,” William Blair analyst Sharon Zackfia raved in a note to clients in October.

Dutch Bros is only thinly profitable because it’s spending prodigiously to finance its expansion. The company’s sales jumped 63% last quarter as the chain expanded rapidly into Texas, California, and other states where it had little presence until recently.

Dutch Bros’ investment bankers plainly mispriced the company’s IPO, underestimating Wall Street’s appetite for the stock by tens or hundreds of millions of dollars. But the markets’ rousing reception for the stock leaves open the possibility Dutch Bros could sell more shares in the future, recouping some of what it left on the table when it went public.

While investors agree Dutch Bros is a winner, though, they haven’t reached consensus on just how much it’s worth. The company finished the year with a market value of approximately $8.6 billion, making it Oregon’s fourth-most-valuable business. But at times last fall its shares were worth 50% more than that.

So 2022 will be another key year for Dutch Bros, as it strives to prove it can achieve its lofty ambitions.

Elsewhere, Hillsboro-based Lattice Semiconductor was Oregon’s second-hottest stock last year. Its shares soared 68%, finishing 2021 at just over $77.

Only four years ago, Lattice waged a protracted, long shot effort to sell itself to a company backed by the Chinese government for just $8.30 a share. The Trump administration blocked the deal on national security grounds, and Lattice went on to thrive in spite of itself.

The company, which designs handy programmable chips for all kinds of consumer gadgets and industrial uses, enjoyed a turnaround under new CEO Jim Anderson and capitalized last year on soaring demand for electronics. Sales were up 28% last quarter compared to the same period in 2020.

Even so, Lattice’s price-to-earnings ratio is an outlandish 117. A P/E ratio, a key metric of corporate value, is more typically around 14. Lattice’s high ratio indicates that investors are betting on expansive growth for some time to come. Any slowdown could trigger a precipitous decline in its share price.

Other big gainers last year include:

· Schnitzer Steel, up 66% on a strong global market for the Portland company’s recycled metals.

· Newly public tech company Expensify, whose technology manages employee expenses. Its sales are booming and investors see a big opportunity. The Portland company’s shares climbed 39% after its November IPO.

· Wilsonville-based battery manufacturer ESS Tech gained 39% after it went public by merging with a publicly traded investment fund known as a special-purpose acquisition company in October. SPAC deals provide stock listings to companies without the expense — and investor scrutiny — associated with a conventional IPO. ESS raised $308 million in its deal, far below the $465 million it targeted. And the company’s sales are negligible; investors are chasing the hope that ESS’ batteries will someday power a green energy revolution by storing electricity from wind and solar farms.

Oregon’s biggest company, Nike, gained 19% in 2021. That would be a robust return most years, and Nike’s sales are growing rapidly. But Nike did even better in 2020 and so perhaps had less room for upside this past year.

Intel, Oregon’s biggest corporate employer, is headquartered in Silicon Valley, and so its stock isn’t ranked alongside companies that are based here. But its performance matters a lot to the regional economy and to Intel’s 21,000 Oregon employees, who receive a portion of their compensation in company stock.

Intel shares gained just 6% last year despite the booming chip market. The company’s sales were flat last year, constrained by limited factory capacity.

And while new CEO Pat Gelsinger has won plaudits inside the company for his ambitious plan to rebuild Intel’s engineering and manufacturing organizations, Gelsinger has spooked investors with its price tag — which includes more than $25 billion a year for the foreseeable future to build and upgrade Intel’s factories.


Shares in plant-based foods company Laird Superfood fared worse than any other Oregon business last year. The business, based in Sisters and co-founded by pro surfer Laird Hamilton, saw its shares plunge 72% to finish 2021 at $13.04.

That’s far below its $22 offering price of Laird’s IPO in the fall of 2020.The stock was briefly trading above $50 last February.

What’s gone wrong? Its sales increased by nearly 50% in the first nine months of 2021 — but its losses more than doubled.

Investors want to see a path to profitability.

Shares in Vancouver exercise equipment brand Nautilus fell by 66% last year, wiping out most of the gains the company enjoyed during the first year of the pandemic. Many other home fitness companies declined last year, too, as people began returning to gyms after vaccines arrived and mandated closures ended for fitness centers.

Two of the region’s newly public companies were among 2021′s biggest disappointments.

Biotech startup Absci fell by nearly half following its July IPO. The company’s artificial intelligence is designed to speed the development and approval of new drugs, but it’s still in the early stages of demonstrating the value of its technology.

With interest rates rising, investors may have less appetite for speculative investments — turning to more established companies late in the year.

Meanwhile, shares in Portland vacation rental management company Vacasa flopped when the company hit the public markets in a SPAC deal last month, dropping 24%. Vacasa raised $340 million in the transaction, well below the $485 million it had anticipated.

Vacasa’s business is strong. Demand for vacation rental homes is soaring, and the Portland company’s most recent report forecast sales of more than $870 million for 2021, up 78%.

The company’s abysmal debut on Wall Street may reflect the potential downside of SPAC deals. SPACs are only recently in vogue as a mechanism for going public, and it’s proving hard to gauge investor sentiment before the companies hit the market.

Even so, Vacasa’s shares now are worth nearly $3.5 billion, making it among Oregon’s most valuable companies. And its ugly first weeks of trading notwithstanding, the company has the business fundamentals in place to fuel years of growth.

— Mike Rogoway | | Twitter: @rogoway | 503-294-7699

Related Posts