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Driven Brands Holdings (DRVN)
NASDAQ:DRVN
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Driven Brands Holdings
(NASDAQ:DRVN)
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Rating:52Neutral
Price Target:
$15.00
▲(0.00% Upside)
Driven Brands Holdings faces significant financial challenges, with declining revenue growth and high leverage posing risks. However, the company has shown strong performance in the Take 5 Oil Change segment and is making strategic moves to improve its financial position, such as the sale of its international car wash business. Technical indicators suggest a neutral trend, and valuation metrics remain challenging. Overall, the stock score reflects a cautious outlook with potential for improvement if strategic initiatives succeed.
Positive Factors
Cash Flow Improvement
Significant improvement in free cash flow indicates enhanced cash generation ability, providing financial flexibility for reinvestment and debt reduction.
Take 5 Oil Change Performance
Consistent growth in the Take 5 segment underscores strong market demand and operational success, contributing positively to overall company performance.
Leadership Appointments
Strategic leadership appointments reflect strong internal talent development, potentially enhancing operational efficiency and strategic execution.
Negative Factors
High Leverage
Significant leverage poses a risk to financial stability, potentially limiting the company's ability to invest in growth and weather economic downturns.
Declining Revenue Growth
Decreasing revenue growth indicates challenges in maintaining market share and could pressure profitability if not addressed through strategic initiatives.
Franchise Segment Challenges
Challenges in the franchise segment, including revenue decline, suggest potential difficulties in sustaining franchisee satisfaction and network expansion.
Driven Brands Holdings (DRVN) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$2.47B
Dividend YieldN/A
Average Volume (3M)1.25M
Price to Earnings (P/E)―
Beta (1Y)0.84
Revenue Growth-6.96%
EPS Growth-3223.14%
CountryUS
Employees10,700
SectorConsumer Cyclical
Sector Strength84
IndustryAuto - Dealerships
Share Statistics
EPS (TTM)0.34
Shares Outstanding164,454,220
10 Day Avg. Volume1,241,709
30 Day Avg. Volume1,251,220
Financial Highlights & Ratios
PEG Ratio0.15
Price to Book (P/B)4.28
Price to Sales (P/S)1.11
P/FCF Ratio-55.26
Enterprise Value/Market Cap2.10
Enterprise Value/Revenue2.39
Enterprise Value/Gross Profit4.86
Enterprise Value/Ebitda582.46
Forecast
1Y Price Target
$21.11Price Target Upside40.73% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering10
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
Driven Brands Holdings Business Overview & Revenue Model
Company DescriptionDriven Brands Holdings Inc. is a leading automotive services company headquartered in Charlotte, North Carolina. The company operates multiple brands in the automotive aftermarket sector, specializing in vehicle maintenance and repair services, as well as car wash services. Its key brands include Meineke Car Care Centers, Maaco, and Drive N Style, among others. Driven Brands focuses on providing high-quality automotive repair, collision, and appearance services to a diverse customer base through its extensive network of franchise and company-owned locations.
How the Company Makes MoneyDriven Brands generates revenue through multiple streams, primarily from service fees charged at its franchise and company-owned locations. This includes revenue from automotive maintenance and repair services, collision repair, and detailing services. Additionally, the company earns royalties and franchise fees from its franchisees, which contribute significantly to its overall revenue. Partnerships with automotive parts suppliers and other service providers also enhance its revenue model, allowing for discounts and promotions that attract more customers. The company's growth strategy includes expanding its brand portfolio and increasing its market presence through new franchise openings and acquisitions, further driving its earnings.
Driven Brands Holdings Earnings Call Summary
Earnings Call Date:Nov 04, 2025
(Q3-2025)
| % Change Since: |
Next Earnings Date:Feb 19, 2026
Earnings Call Sentiment Neutral
Driven Brands reported strong financial results for the third quarter, with significant growth in revenue and the Take 5 Oil Change segment. However, macroeconomic uncertainties and specific segment challenges, particularly in the franchise and collision industries, present potential headwinds as the company navigates the fourth quarter.Q3-2025 Updates
Positive Updates
Revenue Growth and EBITDA Performance
Driven Brands reported a 7% increase in revenue and achieved an adjusted EBITDA of $136 million. System-wide sales increased by 5% with 167 net new stores added over the past 12 months.
Take 5 Oil Change Success
Take 5 Oil Change delivered its 21st consecutive quarter of same-store sales growth, with system-wide sales growing 18% year-over-year and same-store sales up 7%. Adjusted EBITDA grew by 15%, and margins expanded to 35%.
Franchise and Car Wash Segments Performance
The franchise segment achieved a same-store sales growth of 1% and improved adjusted EBITDA margins by 90 basis points. The car wash segment saw a 4% increase in same-store sales and revenue, with adjusted EBITDA margins at 28%.
Operational Innovations
Implemented a new media mix model for advertising and tested AI-driven camera technology to improve efficiency in staffing and workflow at Take 5 locations.
Leadership Appointments
Mo Khalid appointed as Chief Operating Officer and Tim Austin as President of Take 5 Oil Change, reflecting strong internal talent development.
Negative Updates
Macroeconomic Uncertainty
The fourth quarter is experiencing choppiness due to macroeconomic factors such as a government shutdown and potential disruptions in military and social program funding.
Adjusted EBITDA Margin Decline
Adjusted EBITDA margin decreased by 85 basis points compared to the previous year due to increased operating expenses and investments in growth initiatives.
Franchise Segment Challenges
Revenue in the franchise segment declined by 2.3% due to a decrease in weighted average royalty rate, and Maaco's performance remained pressured.
Collision Industry Headwinds
The collision industry faces ongoing challenges with high insurance premiums and deductibles, impacting performance despite improved sequential results.
Company Guidance
During the Third Quarter 2025 Earnings Conference Call, Driven Brands provided guidance detailing their financial performance and expectations. The company reported a 7% revenue growth and an adjusted EBITDA of $136 million. System-wide sales increased by 5%, supported by 167 net new stores over the past year, including 39 additions this quarter. Same-store sales rose by 3% for the 19th consecutive quarter. The Take 5 Oil Change segment showed robust performance with a 7% growth in same-store sales and an 18% year-over-year increase in system-wide sales, driving a 15% growth in adjusted EBITDA. Adjusted EBITDA margins for Take 5 expanded to 35%. Driven Brands aims to open approximately 170 new Take 5 locations in 2025. The company reduced its net leverage to 3.8x, with a target of 3x by the end of 2026. Despite a dynamic consumer environment and macroeconomic uncertainties, Driven Brands narrowed their full-year guidance, projecting total revenue of $2.1 billion to $2.12 billion and adjusted EBITDA between $525 million and $535 million.Driven Brands Holdings Financial Statement Overview
Summary
Driven Brands Holdings faces challenges with declining revenue growth and profitability, as well as high leverage. Despite these issues, the company has shown improvement in cash flow generation. The financial position indicates potential risks due to high debt levels, but operational efficiencies and cash flow improvements provide some positive outlook.Income Statement
Driven Brands Holdings has experienced declining revenue growth in the TTM period, with a negative revenue growth rate of -2.65%. The company also faces challenges with profitability, as indicated by negative net profit and EBIT margins. However, the gross profit margin remains relatively stable, suggesting some operational efficiency.45
Neutral
Balance Sheet
The balance sheet shows a high debt-to-equity ratio of 3.90 in the TTM period, indicating significant leverage. Return on equity is negative, reflecting losses. The equity ratio is not provided, but the high leverage poses a risk to financial stability.40
Negative
Cash Flow
Cash flow analysis reveals a strong free cash flow growth rate of 3698.57% in the TTM period, indicating improved cash generation. However, the operating cash flow to net income ratio is low, suggesting limited cash flow relative to earnings. The free cash flow to net income ratio is positive, showing some ability to generate cash despite net losses.50
Neutral
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 2.17B | 2.34B | 2.30B | 2.03B | 1.47B | 904.20M |
| Gross Profit | 1.07B | 1.23B | 1.03B | 967.51M | 725.01M | 557.24M |
| EBITDA | 8.91M | 27.71M | -506.24M | 329.59M | 223.58M | 164.92M |
| Net Income | -198.04M | -292.50M | -744.96M | 43.19M | 9.63M | -4.20M |
Balance Sheet | ||||||
| Total Assets | 4.15B | 5.26B | 5.91B | 6.50B | 5.86B | 4.66B |
| Cash, Cash Equivalents and Short-Term Investments | 225.98M | 169.95M | 176.52M | 227.11M | 523.41M | 172.61M |
| Total Debt | 2.76B | 4.00B | 4.28B | 3.92B | 3.31B | 2.94B |
| Total Liabilities | 3.36B | 4.65B | 5.00B | 4.85B | 4.21B | 3.55B |
| Stockholders Equity | 793.49M | 607.33M | 906.08M | 1.65B | 1.64B | 1.10B |
Cash Flow | ||||||
| Free Cash Flow | 41.33M | -47.06M | -361.31M | -239.03M | 123.07M | 31.53M |
| Operating Cash Flow | 269.10M | 241.45M | 235.17M | 197.18M | 283.83M | 83.99M |
| Investing Cash Flow | 257.44M | 59.02M | -451.41M | -840.28M | -814.94M | -57.32M |
| Financing Cash Flow | -572.41M | -302.84M | 170.70M | 343.37M | 885.54M | 118.64M |
Driven Brands Holdings Technical Analysis
Neutral
15.00
Price Trends
14.88
Positive
16.16
Negative
16.63
Negative
Market Momentum
>-0.01
Negative
55.27
Neutral
80.94
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DRVN, the sentiment is Neutral. The current price of 15 is above the 20-day moving average (MA) of 14.21, above the 50-day MA of 14.88, and below the 200-day MA of 16.63, indicating a neutral trend. The MACD of >-0.01 indicates Negative momentum. The RSI at 55.27 is Neutral, neither overbought nor oversold. The STOCH value of 80.94 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral 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
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | $7.96B | 9.50 | 13.44% | 0.66% | 8.56% | 17.84% | |
72 Outperform | $10.86B | 11.62 | 17.30% | 3.14% | 2.25% | 8.92% | |
70 Outperform | $7.77B | 12.70 | 27.16% | ― | 6.06% | -1.71% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% | |
61 Neutral | $2.20B | 17.39 | 12.51% | 2.22% | 9.09% | -33.59% | |
59 Neutral | $5.70B | 11.40 | 8.42% | ― | 2.17% | 28.59% | |
52 Neutral | $2.47B | ― | -24.67% | ― | -6.96% | -3223.14% |
* Consumer Cyclical Sector Average
DRVN
Driven Brands Holdings
15.00
-1.76
-10.50%
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Driven Brands Holdings Corporate Events
M&A TransactionsBusiness Operations and StrategyFinancial Disclosures
Driven Brands Sells IMO to Focus on Core Operations
Positive
Dec 2, 2025
Driven Brands Holdings Inc. announced on December 2, 2025, that it has entered into a definitive agreement to sell its international car wash business, IMO, to Franchise Equity Partners for €406 million. This divestiture is part of Driven Brands’ strategy to focus on its core North American operations, particularly scaling Take 5 and enhancing cash generation through its Franchise Brands. The transaction, expected to close in the first quarter of 2026, aims to reduce the company’s net leverage ratio and strengthen its balance sheet, with proceeds primarily used to pay down debt. The company has updated its financial outlook for fiscal year 2025 to reflect the reclassification of the international car wash business as discontinued operations, anticipating adjusted diluted EPS from continuing operations to range from $1.18 to $1.23.
Private Placements and FinancingBusiness Operations and Strategy
Driven Brands Holdings Closes $500M Senior Secured Notes
Neutral
Oct 21, 2025
On October 20, 2025, Driven Brands Holdings Inc. announced the closure of a $500 million offering of Series 2025-1 Fixed Rate Senior Secured Notes, Class A-2, with an anticipated repayment date in October 2030 and a final maturity in October 2055. This issuance, part of a whole business securitization, aims to refinance existing debt, pay transaction-related fees, and support general corporate purposes, reflecting Driven Brands’ strategic financial management and positioning within the automotive services industry.
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.