Education
About Us
Working with TipRanks
Follow Us
Monro Muffler Brake (MNRO)
NASDAQ:MNRO
Top Page
Monro Muffler
(NASDAQ:MNRO)
55Neutral
Positive Factors
Financial Performance
MNRO's FQ1 update topped expectations with narrowing comp declines, a June tire unit inflection, and signs of controlling the controllables via initiatives.
Profitability
Gross margin expanded by 225 basis points year over year, driven by improvements in technician labor and material costs.
Sales Growth
An upcoming tire cycle is expected to drive future comparable store sales growth.
Negative Factors
Consumer Behavior
The company's customer base, primarily in the low- to mid-income range, is being impacted by inflation, leading to a decrease in demand for Monro's products and services.
Market Shift
The increasing popularity of electric vehicles could adversely affect Monro's service-related revenue due to the different maintenance needs compared to traditional vehicles.
Technological Advances
Advances in automotive technology are resulting in cars that require less frequent servicing, which could negatively impact Monro's revenue as these cars become more widespread.
Monro Muffler (MNRO) vs. S&P 500 (SPY)
Market Cap
$493.57M
Dividend Yield6.55%
Average Volume (3M)978.14K
Price to Earnings (P/E)28.9
Beta (1Y)0.76
Revenue Growth-5.25%
EPS Growth-42.25%
CountryUS
Employees7,660
SectorConsumer Cyclical
Sector Strength50
IndustryVehicles
Share Statistics
EPS (TTM)0.59
Shares Outstanding29,949,383
10 Day Avg. Volume1,010,355
30 Day Avg. Volume978,143
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.42
Price to Cash Flow (P/CF)8.70
P/FCF Ratio11.60
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$25.50Price Target Upside57.41% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering2
Monro Muffler Business Overview & Revenue Model
Company DescriptionMonro, Inc. is a leading provider of automotive undercar repair and tire services in the United States. The company operates under various brand names, including Monro Auto Service and Tire Centers, Mr. Tire, and Tire Choice Auto Service Centers, among others. Monro offers a comprehensive range of services including tire replacement, alignment, brakes, steering, suspension, and other maintenance services. Its extensive network of service centers primarily focuses on providing high-quality, convenient, and affordable automotive services to individual consumers and fleet operators.
How the Company Makes MoneyMonro, Inc. makes money through a combination of service and product sales at its automotive service centers. The company's revenue model is primarily based on providing maintenance and repair services, which include tire installation, brake services, wheel alignments, and general automotive repair. Additionally, Monro generates revenue from the sale of automotive parts and tires. The company benefits from strategic partnerships with tire manufacturers and suppliers, which enable it to offer a wide range of branded tire products. Monro also capitalizes on its extensive store network and customer loyalty programs to drive repeat business and enhance its revenue streams.
Monro Muffler Financial Statement Overview
Summary
Overall, Monro Muffler's financial statements present a mixed picture. While the company demonstrates solid cash flow generation and a stable equity position, it faces challenges with high leverage and inconsistent revenue growth. Profit margins are under pressure, and operational efficiencies need improvement to enhance profitability. The company's financial health is stable but requires careful management to mitigate risks associated with leverage and profitability.Income Statement
Monro Muffler's TTM (Trailing-Twelve-Months) income statement shows mixed results. The gross profit margin is healthy, indicating efficient cost management, but the net profit margin is relatively low, suggesting challenges in translating revenue into profit. Revenue growth has been inconsistent, with a notable decline in recent periods. EBIT and EBITDA margins are moderate, reflecting potential operational inefficiencies.58
Neutral
Balance Sheet
The balance sheet reveals a solid equity ratio, indicating a stable financial structure. However, the debt-to-equity ratio is high, highlighting potential leverage risks. Return on equity has decreased over the years, suggesting weakened profitability. The company's equity position remains strong, providing a buffer against financial volatility.62
Positive
Cash Flow
Cash flow analysis shows a robust operating cash flow to net income ratio, indicating strong cash generation capabilities. Free cash flow growth has been positive but volatile, reflecting fluctuations in capital expenditures and operational results. The free cash flow to net income ratio is favorable, supporting financial stability.65
Positive
| Breakdown | |||||
| TTM | Mar 2024 | Mar 2023 | Mar 2022 | Mar 2021 | Mar 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 1.21B | 1.28B | 1.33B | 1.36B | 1.13B | 1.26B | Gross Profit |
| 430.42M | 452.10M | 456.18M | 481.84M | 395.19M | 476.66M | EBIT |
| 48.17M | 71.42M | 79.75M | 20.75M | -4.88M | 37.50M | EBITDA |
| 99.86M | 144.09M | 156.79M | 101.92M | 72.43M | 166.69M | Net Income Common Stockholders |
| 19.79M | 37.57M | 39.05M | 61.57M | 34.32M | 58.02M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 10.16M | 6.56M | 4.88M | 7.95M | 29.96M | 345.48M | Total Assets |
| 1.67B | 1.69B | 1.78B | 1.87B | 1.81B | 2.05B | Total Debt |
| 538.50M | 611.01M | 591.39M | 803.36M | 734.05M | 1.04B | Net Debt |
| 528.33M | 604.45M | 586.50M | 795.41M | 704.09M | 690.25M | Total Liabilities |
| 1.02B | 1.04B | 1.08B | 1.09B | 1.06B | 1.32B | Stockholders Equity |
| 648.92M | 656.77M | 694.92M | 782.91M | 749.68M | 734.44M |
| Cash Flow | Free Cash Flow | ||||
| 70.46M | 99.72M | 176.03M | 145.93M | 133.18M | 65.41M | Operating Cash Flow |
| 97.72M | 125.20M | 215.02M | 173.76M | 184.91M | 121.33M | Investing Cash Flow |
| -1.56M | -1.96M | 26.55M | -109.80M | -66.26M | -158.81M | Financing Cash Flow |
| -109.85M | -121.56M | -244.63M | -85.97M | -434.16M | 376.74M |
Monro Muffler Technical Analysis
Negative
16.20
Price Trends
19.90
Negative
23.41
Negative
24.08
Negative
Market Momentum
-1.02
Positive
29.68
Positive
24.98
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MNRO, the sentiment is Negative. The current price of 16.2 is below the 20-day moving average (MA) of 17.87, below the 50-day MA of 19.90, and below the 200-day MA of 24.08, indicating a bearish trend. The MACD of -1.02 indicates Positive momentum. The RSI at 29.68 is Positive, neither overbought nor oversold. The STOCH value of 24.98 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for MNRO.
Monro Muffler Risk Analysis
Monro Muffler disclosed 29 risk factors in its most recent earnings report. Monro Muffler 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
Monro Muffler Peers Comparison
Overall Rating
UnderperformOutperform
Sector (59)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
72 Outperform | $75.83B | 32.56 | -174.09% | ― | 5.67% | 5.40% | |
71 Outperform | $59.79B | 23.90 | -14.95% | ― | 4.72% | 4.69% | |
71 Outperform | $11.19B | 16.85 | 11.33% | 2.78% | 3.53% | -25.71% | |
69 Neutral | $17.15B | 19.93 | 20.69% | 3.10% | 1.71% | -30.78% | |
59 Neutral | $12.41B | 10.34 | 1.32% | 3.61% | 1.65% | -18.04% | |
55 Neutral | $493.57M | 28.95 | 3.02% | 6.55% | -5.25% | -42.25% | |
45 Neutral | $2.18B | 59.62 | -23.45% | 2.73% | -9.34% | -852.37% |
* Consumer Cyclical Sector Average
Performance Comparison
MNRO
Monro Muffler
16.20
-12.12
-42.80%
AAP
Advance Auto Parts
37.58
-40.79
-52.05%
AZO
AutoZone
3,547.13
457.89
14.82%
GPC
Genuine Parts Company
121.33
-27.55
-18.50%
LKQ
LKQ
42.54
-8.15
-16.08%
ORLY
O'Reilly Auto
1,309.29
207.89
18.88%
Monro Muffler Earnings Call Summary
Earnings Call Date: Jan 29, 2025 | % Change Since: -25.28% | Next Earnings Date: May 15, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mixed picture, with notable improvements in comparable store sales and service category growth, supported by the success of digital initiatives. However, these were offset by declines in overall sales, operating income, and gross margin, compounded by January's weather-related challenges.Highlights
Sequential Improvement in Comparable Store Sales
Year-over-year comparable store sales percentage change improved by 500 basis points sequentially from the second quarter of fiscal 2025, with positive growth in December.
Growth in Tire and Service Categories
Tire units were up low-single-digits in the third quarter, driven by mid-single-digit growth in December. Service categories like batteries, alignment, and front-end shocks saw year-over-year growth.
Strong Cash Flow and Financial Position
Generated $103 million in cash from operations in the first nine months of fiscal 2025, with an AP to inventory ratio improvement to 179% and total liquidity of $521 million.
Digital Courtesy Inspection Success
The ConfiDrive Digital Courtesy Inspection Process drove improvement in service category sales, particularly in batteries and alignments.
Lowlights
Decline in Sales and Operating Income
Sales decreased by 3.7% year-over-year, with comparable store sales down 1.9%. Operating income declined to $10 million, or 3.3% of sales, from $21.4 million, or 6.7% of sales, in the prior year period.
Gross Margin Pressure
Gross margin decreased by 120 basis points due to higher material costs, an increased level of self-funded promotions, and trade down to Tier-3 tires.
Reduced Net Income and EPS
Net income was $4.6 million, down from $12.2 million in the prior year. Diluted earnings per share decreased from $0.38 to $0.15.
January Sales Challenges
Preliminary fiscal January comp store sales were down 1%, driven by weakness in tire category sales affected by extreme weather.
Company Guidance
During the earnings call for Monro, Inc.'s third quarter of fiscal 2025, the company shared several key metrics and guidance for future performance. Comparable store sales showed a sequential improvement, with a 500 basis point increase from the second quarter, returning to growth in December with a 1% increase. Despite a year-over-year sales decline of 3.7%, driven by a 1.9% decrease in comparable store sales, the company achieved low single-digit growth in tire units during December. Gross margin decreased by 120 basis points due to a mix shift in tire sales and increased promotions, while operating expenses rose to 31% of sales from 28.7% in the prior year. The company reported net income of $4.6 million, down from $12.2 million, with diluted earnings per share at $0.15. Looking ahead, Monro aims to leverage initiatives like the ConfiDrive Digital Courtesy Inspection Process to improve service category sales and expects to generate at least $120 million in operating cash flow for the fiscal year. Despite near-term margin pressures, the company is focused on driving sales and customer growth, targeting a return to pre-COVID gross margin levels with double-digit operating margins in the long term.Monro Muffler Corporate Events
Executive/Board ChangesBusiness Operations and Strategy
Monro Muffler Appoints New Senior VP of Operations
Neutral
Feb 10, 2025
On February 5, 2025, Monro, Inc. appointed Nick Hawryschuk as Senior Vice President of Operations, effective immediately. Previously Vice President of Finance and Operations, Hawryschuk will now oversee the company’s retail and commercial operations. His promotion reflects Monro’s strategic focus on operational improvements and expanding capabilities, as he brings extensive experience in finance and operations from his tenure at Monro and previous leadership roles at Xylem Inc. and Carestream Health, Inc.
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.