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Driven Brands Holdings (DRVN)
NASDAQ:DRVN
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Driven Brands Holdings
(NASDAQ:DRVN)
52Neutral
Positive Factors
Business Model Clarity
Re-segmentation is expected to provide more clarity on DRVN’s core business model and highlight strong growth areas, supporting valuation.
Debt Reduction
The sale of the US car wash business and remaining car wash real estate pipeline will help DRVN reduce debt and focus on growing Take 5 through franchises.
Negative Factors
Macroeconomic Uncertainty
The company highlighted macro-economic uncertainty, continued inflationary pressures on consumer spending, and potential tariffs as drivers for its 'prudent' approach to its FY2025 outlook.
Driven Brands Holdings (DRVN) vs. S&P 500 (SPY)
Market Cap
$2.71B
Dividend YieldN/A
Average Volume (3M)751.00K
Price to Earnings (P/E)552.6
Beta (1Y)1.43
Revenue Growth1.54%
EPS Growth60.18%
CountryUS
Employees10,700
SectorConsumer Cyclical
Sector Strength49
IndustryVehicles
Share Statistics
EPS (TTM)-1.82
Shares Outstanding163,836,640
10 Day Avg. Volume982,503
30 Day Avg. Volume750,998
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)1.16
Price to Cash Flow (P/CF)20.60
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$19.91Price Target Upside20.30% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering12
Driven Brands Holdings Business Overview & Revenue Model
Company DescriptionDriven Brands Holdings Inc is an automotive services company. The company provides an extensive range of core consumer and commercial automotive needs, including paint, collision, glass, vehicle repair, oil change, maintenance and car wash.
How the Company Makes MoneyDriven Brands Holdings generates revenue through its multi-faceted business model, which includes franchise fees, company-operated store sales, and royalties from franchise operators. Franchise fees are collected from franchisees as part of the initial agreement and ongoing operations. Additionally, the company earns revenue from the sale of products and services at its company-operated stores. Driven Brands also benefits from its scale and purchasing power, allowing it to secure favorable terms with suppliers and partners, which improves profitability. The company's diverse brand portfolio and broad geographic presence support stable revenue streams and help mitigate risks associated with market fluctuations.
Driven Brands Holdings Financial Statement Overview
Summary
Driven Brands Holdings exhibits strong revenue growth, but faces significant challenges in profitability and cash flow management. High leverage and negative profitability metrics underscore financial instability.Income Statement
Driven Brands Holdings has shown significant revenue growth over the years, indicating expansion. However, profitability metrics such as net profit margin and EBIT margin are negative, reflecting operational challenges and potential inefficiencies. The negative EBITDA margin further highlights the struggles in generating operating profit.45
Neutral
Balance Sheet
The company has a high debt-to-equity ratio, indicating a significant reliance on debt financing, which poses a risk in terms of financial stability. The equity ratio is low, suggesting limited equity cushion. However, the return on equity has been volatile, with recent years showing negative returns due to net losses.52
Neutral
Cash Flow
Driven Brands Holdings has experienced variable free cash flow, with recent periods showing negative free cash flow, indicating cash management challenges. The operating cash flow to net income ratio suggests that cash generation from operations is better than net income results, but the free cash flow to net income ratio is concerning due to persistent negative values.50
Neutral
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 2.34B | 2.30B | 2.03B | 1.47B | 904.20M | Gross Profit |
| 2.34B | 1.19B | 879.52M | 650.25M | 401.87M | EBIT |
| -140.23M | -686.53M | 346.01M | 242.71M | 94.73M | EBITDA |
| 19.44M | -504.16M | 493.17M | 355.49M | 180.67M | Net Income Common Stockholders |
| -292.50M | -744.96M | 43.19M | 9.63M | -4.22M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 169.95M | 176.52M | 227.11M | 523.41M | 172.61M | Total Assets |
| 5.26B | 5.91B | 6.50B | 5.85B | 4.66B | Total Debt |
| 4.00B | 4.35B | 3.92B | 3.31B | 2.94B | Net Debt |
| 3.83B | 4.10B | 3.69B | 2.79B | 2.77B | Total Liabilities |
| 4.65B | 5.00B | 4.85B | 4.21B | 3.55B | Stockholders Equity |
| 607.33M | 906.08M | 1.65B | 1.64B | 1.10B |
| Cash Flow | Free Cash Flow | |||
| -47.06M | -361.31M | -242.41M | 123.07M | 31.53M | Operating Cash Flow |
| 241.45M | 235.17M | 197.18M | 283.83M | 83.99M | Investing Cash Flow |
| 59.02M | -451.41M | -840.28M | -814.94M | -57.32M | Financing Cash Flow |
| -302.84M | 170.70M | 343.37M | 885.54M | 118.64M |
Driven Brands Holdings Technical Analysis
Positive
16.55
Price Trends
16.08
Positive
16.05
Positive
14.65
Positive
Market Momentum
0.08
Negative
54.44
Neutral
40.00
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DRVN, the sentiment is Positive. The current price of 16.55 is above the 20-day moving average (MA) of 16.10, above the 50-day MA of 16.08, and above the 200-day MA of 14.65, indicating a bullish trend. The MACD of 0.08 indicates Negative momentum. The RSI at 54.44 is Neutral, neither overbought nor oversold. The STOCH value of 40.00 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for DRVN.
Driven Brands Holdings Risk Analysis
Driven Brands Holdings disclosed 63 risk factors in its most recent earnings report. Driven Brands Holdings reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Driven Brands Holdings Peers Comparison
Overall Rating
UnderperformOutperform
Sector (59)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
71 Outperform | $59.53B | 23.78 | -14.95% | ― | 4.72% | 4.69% | |
70 Outperform | $74.99B | 31.71 | -174.09% | ― | 5.67% | 5.40% | |
69 Neutral | $16.84B | 18.74 | 20.69% | 3.30% | 1.71% | -30.78% | |
59 Neutral | $12.50B | 10.40 | 2.26% | 3.63% | 1.65% | -18.81% | |
55 Neutral | $485.18M | 27.43 | 3.02% | 6.98% | -5.25% | -42.25% | |
52 Neutral | $2.71B | 552.59 | -37.95% | ― | 1.54% | 60.18% | |
45 Neutral | $2.25B | 59.62 | -23.45% | 2.66% | -9.34% | -852.37% |
* Consumer Cyclical Sector Average
Performance Comparison
DRVN
Driven Brands Holdings
16.95
2.39
16.41%
AAP
Advance Auto Parts
37.59
-42.60
-53.12%
AZO
AutoZone
3,554.91
430.58
13.78%
GPC
Genuine Parts Company
122.00
-27.04
-18.14%
MNRO
Monro Muffler
16.05
-11.95
-42.68%
ORLY
O'Reilly Auto
1,289.49
176.31
15.84%
Driven Brands Holdings Earnings Call Summary
Earnings Call Date: Feb 25, 2025 | % Change Since: 8.03% | Next Earnings Date: Apr 23, 2025
Earnings Call Sentiment Neutral
Driven Brands showed resilience in revenue and store growth, particularly in the Take 5 Oil Change segment, while also making progress on debt reduction and asset sales. However, the company faced significant challenges with a decline in operating income, net loss, and continued pressures from inflation affecting consumer spending. The sentiment is mixed, reflecting both positive achievements and notable challenges.Highlights
Steady Revenue and Store Growth
Q4 2024 revenue of $564 million, up 2% year-over-year, driven by 70 net new stores and 2.9% same-store sales growth. Fiscal year 2024 revenue reached $2.3 billion with 191 net new stores.
Strong Performance of Take 5 Oil Change
Take 5 Oil Change achieved its 18th consecutive quarter of positive same-store sales growth with 9.2% in Q4 2024 and 6.8% for the fiscal year. Revenue grew by 16% and EBITDA by 21% compared to the previous year.
Debt Reduction and Leverage Improvement
Driven Brands paid down approximately $248 million of debt in 2024, achieving a net leverage ratio of 4.4x in Q4, with a target of less than 3x by year-end 2026.
Divestiture Plan and Asset Sales
Entered into a definitive agreement to sell the U.S. car wash business. Sold $208 million worth of assets in 2024, completing over 75% of the asset divestiture process.
Lowlights
Operating Income and Net Loss Challenges
Operating income declined significantly to negative $318.8 million in Q4, with a net loss of $312 million, primarily due to asset impairments and higher operating expenses.
Challenges in Consumer Spending
Ongoing inflationary pressures are expected to continue affecting consumer spending in 2025, particularly among lower-income households.
Impact of Strategic Reviews
Increased operating expenses due to $317.9 million in asset impairments and $43.4 million in SG&A related to the strategic review of the U.S. car wash segment.
Company Guidance
During the Driven Brands Q4 2024 earnings call, the company provided guidance for 2025, highlighting key financial metrics and strategic priorities. The company expects revenue to range between $2.05 billion to $2.15 billion, with adjusted EBITDA projected between $520 million to $550 million. Adjusted diluted EPS is anticipated to be between $1.15 and $1.25 per share, reflecting continued growth despite macroeconomic pressures. Driven Brands plans to achieve same-store sales growth of 1% to 3% and aims for net store growth of 175 to 200 units. The company is focused on reducing its leverage ratio to less than 3x by year-end 2026, building on the 4.4x achieved in Q4 2024. The sale of the U.S. car wash business, expected to close in Q2 2025, is part of this strategy, alongside a re-segmentation to spotlight the Take 5 Oil Change segment as a standalone growth driver.Driven Brands Holdings Corporate Events
Business Operations and StrategyFinancial Disclosures
Driven Brands Announces Segment Reporting Changes
Neutral
Mar 12, 2025
On March 12, 2025, Driven Brands Holdings Inc. announced a change in its segment reporting, effective from the first quarter of 2025. This change reflects the company’s operational management and value creation strategies, highlighting Take 5 Oil Change as a stand-alone segment and consolidating franchise businesses into one segment. The recast financial information for fiscal year 2024 shows no impact on consolidated historical U.S. GAAP financial results and is available on the company’s Investor Relations website.
Executive/Board ChangesM&A TransactionsBusiness Operations and StrategyFinancial Disclosures
Driven Brands Sells U.S. Car Wash Business
Neutral
Feb 25, 2025
Driven Brands Holdings Inc. announced a definitive agreement to sell its U.S. car wash business to Express Wash Operations, LLC for $385 million. The transaction is expected to streamline the company’s operations and focus on its core businesses, with the sale proceeds aiding in debt reduction and portfolio management. Additionally, the company reported financial results for fiscal year 2024, with a 2% revenue increase to $2.3 billion and a net loss reduction compared to the previous year. In a leadership transition, Jonathan Fitzpatrick will step down as CEO on May 9, 2025, to be succeeded by Daniel Rivera, the current COO. Fitzpatrick will remain as Non-Executive Chair of the Board, ensuring continuity in leadership.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.