Driven Brands Holdings (DRVN) AI Stock Analysis

• Market Cap: $2.59B
• Dividend Yield: N/A
• Average Volume (3M): 780.76K
• Price to Earnings (P/E): 552.6
• Beta (1Y): 1.13
• Revenue Growth: 1.54%
• EPS Growth: 60.18%
• Country: US
• Employees: 10,700
• Sector: Consumer Cyclical
• Sector Strength: 58
• Industry: Auto - Dealerships
• EPS (TTM): -1.82
• Shares Outstanding: 164,274,610
• 10 Day Avg. Volume: 782,730
• 30 Day Avg. Volume: 780,760
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 1.22
• Price to Cash Flow (P/CF): 21.70
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $20.08
• Price Target Upside: 23.19% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 13

Driven Brands' overall score reflects a company with strong revenue growth and effective strategic moves like asset sales, yet challenged by high leverage and negative profitability. Technical indicators suggest limited momentum, and valuation metrics highlight concerns over current pricing. The company's efforts in managing debt and focusing on profitable segments are positive, but macroeconomic pressures and operational inefficiencies remain key risks.

Positive Factors

Restructuring

The company restructures to focus on a higher-growth, higher-margin portfolio, which is expected to unlock shareholder value and drive its next phase of growth.

Take 5 Brand Growth

The Take 5 brand is its largest and fastest-growing segment, poised to gain market share from peers, with plans to add ~1,000 locations.

Negative Factors

Inflationary Pressures

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.

Slower Growth Outlook

The potential for slower growth at Take 5 and the company-wide store growth guidance suggest a cautious outlook on near-term growth.

Driven Brands Holdings Business Overview & Revenue Model

Company Description

Driven Brands Holdings Inc., together with its subsidiaries, provides automotive services to retail and commercial customers in the United States, Canada, and internationally. The company offers various services, such as paint, collision, glass, vehicle repair, car wash, oil change, and maintenance services. It also distributes automotive parts, including radiators, air conditioning components, and exhaust products to automotive repair shops, auto parts stores, body shops, and other auto repair outlets; windshields and glass accessories through a network of distribution centers; and consumable products, such as oil filters and wiper blades, as well as provides training services to repair and maintenance, and paint and collision shops. The company sells its products and services under the Take 5 Oil Change, IMO, CARSTAR, ABRA, Fix Auto, Maaco, Meineke, Uniban, 1-800-Radiator & A/C, PH Vitres D'Autos, Spire Supply, and Automotive Training Institute names. As of December 25, 2021, it operated 4,412 company-operated, franchised, and independently-operated stores. Driven Brands Holdings Inc. was founded in 1972 and is headquartered in Charlotte, North Carolina.

How the Company Makes Money

Driven 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.

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.

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.

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

• Technical Analysis Sentiment: Negative
• Last Price: 16.30
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DRVN, the sentiment is Negative. The current price of 16.3 is below the 20-day moving average (MA) of 16.56, below the 50-day MA of 16.44, and above the 200-day MA of 15.31, indicating a neutral trend. The MACD of -0.19 indicates Positive momentum. The RSI at 43.20 is Neutral, neither overbought nor oversold. The STOCH value of 69.57 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for DRVN.

Driven Brands Holdings Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
PAG	80 Outperform	$10.13B	11.05	18.50%	2.92%	3.14%	-11.22%
ABG	75 Outperform	$4.30B	10.16	12.76%	―	16.11%	-24.72%
LAD	73 Outperform	$7.58B	9.75	12.47%	0.73%	16.75%	-18.09%
SAH	66 Neutral	$1.99B	9.52	22.11%	2.21%	-1.03%	24.64%
AN	65 Neutral	$6.49B	9.75	29.65%	―	-0.68%	-25.24%
Sector *	60 Neutral	$6.54B	11.34	3.27%	4.27%	2.37%	-20.86%
DRVN	52 Neutral	$2.59B	552.59	-37.95%	―	1.54%	60.18%

Driven Brands Holdings Corporate Events

Driven Brands Sells U.S. Car Wash Business

On April 10, 2025, Driven Brands Holdings announced the completion of the sale of its U.S. car wash business to Whistle Express Car Wash for approximately $255 million in cash and a $130 million interest-bearing seller note. This strategic move allows Driven Brands to concentrate on its Take 5 Oil Change business and aims to reduce net leverage to 3x or less by the end of 2026, reflecting a significant shift in the company’s operational focus and financial strategy.

Spark’s Take on DRVN Stock

According to Spark, TipRanks’ AI Analyst, DRVN is a Neutral.

Driven Brands Holdings demonstrates strong revenue growth and resilience in its Take 5 Oil Change segment. However, high leverage, negative profitability, and inflationary pressures pose significant risks. The mixed sentiment from the earnings call reflects these challenges and strategic efforts to improve financial stability.

To see Spark’s full report on DRVN stock, click here.

Driven Brands Announces Segment Reporting Changes

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.

Driven Brands Sells U.S. Car Wash Business

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.