European Wax Center (EWCZ) AI Stock Analysis

• Market Cap: $313.57M
• Dividend Yield: N/A
• Average Volume (3M): 844.13K
• Price to Earnings (P/E): 27.9
• Beta (1Y): 1.56
• Revenue Growth: -2.93%
• EPS Growth: -17.72%
• Country: US
• Employees: 124
• Sector: Consumer Cyclical
• Sector Strength: 73
• Industry: Household & Personal Products
• EPS (TTM): 0.20
• Shares Outstanding: 43,339,565
• 10 Day Avg. Volume: 675,201
• 30 Day Avg. Volume: 844,134
• PEG Ratio: -3.36
• Price to Book (P/B): 2.41
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 3.53
• Enterprise Value/Market Cap: 1.69
• Enterprise Value/Revenue: 0.60
• Enterprise Value/Gross Profit: 3.42
• Enterprise Value/Ebitda: 1.93
• 1Y Price Target: $6.71
• Price Target Upside: 17.72% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 8

• Rating: 68 Neutral
• Price Target: $6.00 ▲(5.26%Upside)

European Wax Center scores moderately due to strong cash flow and operational efficiency, despite low net profit margins and some technical concerns. The company's strategic initiatives and fair valuation contribute positively, although challenges remain with store closures and tariff impacts.

Positive Factors

Financial Performance

Raising target price from $4.50 to $6 reflects higher estimates and a higher terminal multiple in the DCF, given underlying comps have stabilized and no more franchise store closures were announced.

Leadership and Strategy

New leadership is doing what they can to reignite comp growth and get better visibility into franchise-level store profitability, including retooling their marketing efforts to bring new customers into centers.

Profitability and Cash Flow

EWCZ’s profitable model and strong free cash flow warrant a higher multiple than the current 7x EV/EBITDA.

Negative Factors

Business Visibility

Analyst remains Underweight rated given limited visibility on how EWCZ's initiatives will unfold and whether unit growth can resume by the end of '26.

Market Challenges

Near-term macro challenges are also weighing, with transactions declining and lower engagement from new guests.

Store Closures and Unit Growth

Shares are down (~15%) as the number of store closures in '25 will likely be more than previously expected.

European Wax Center Business Overview & Revenue Model

Company Description

European Wax Center, Inc. operates as the franchisor and operator of out-of-home waxing services in the United States. The company offers body and facial waxing services; and pre- and post-service products, including ingrown hair serums, exfoliating gels, brow shapers, and skin treatments. As of March 26, 2022, it had a portfolio of centers operating in 874 locations across 44 states, including 868 franchised centers and six corporate-owned centers. European Wax Center, Inc. was founded in 2004 and is headquartered in Plano, Texas.

How the Company Makes Money

European Wax Center generates revenue primarily through its franchise model, where it licenses its brand and business model to franchisees who operate the individual locations. The company earns money from franchise fees, which include initial setup fees and ongoing royalties based on the franchisees' sales. Additionally, the company sells proprietary skincare products, such as exfoliants and lotions, both in-store and online, which contribute to its revenue stream. Partnerships with vendors for skincare products and collaborations in marketing and promotions also play a role in enhancing its brand presence and revenue potential.

European Wax Center Financial Statement Overview

Summary

European Wax Center demonstrates solid revenue growth and strong cash flow management, although profitability margins are inconsistent. The balance sheet shows high leverage, posing a risk, but improvements in equity position are promising.

Income Statement

The income statement shows steady revenue growth with a slight dip in the latest year. Gross profit margin remains healthy, indicating efficient cost management. However, net profit margin and EBIT margins show some fluctuations, suggesting challenges in maintaining profitability. Despite this, the company has shown improvement in EBITDA margin over time.

Balance Sheet

The balance sheet highlights a high debt-to-equity ratio, indicating significant leverage. However, the company has improved its equity position over time. Return on equity is moderate, suggesting decent profitability relative to shareholders' equity. The equity ratio is low, reflecting a reliance on debt financing.

Cash Flow

Cash flow analysis indicates strong free cash flow growth, showcasing effective cash generation capabilities. The operating cash flow to net income ratio is robust, indicating good cash conversion efficiency. Additionally, free cash flow to net income ratio demonstrates strong cash profitability.

Breakdown
Mar 2025	Mar 2024	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
216.92M	221.02M	207.35M	178.68M	103.41M
	Gross Profit
159.60M	158.39M	148.12M	131.84M	67.90M
	EBIT
47.76M	44.86M	-15.95M	24.37M	-2.17M
	EBITDA
62.64M	65.44M	4.28M	45.03M	16.36M
	Net Income Common Stockholders
10.46M	8.93M	13.61M	3.97M	-39.77M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
49.73M	52.73M	44.22M	43.30M	36.72M
	Total Assets
707.07M	735.73M	716.03M	613.44M	606.90M
	Total Debt
380.82M	380.39M	380.47M	178.23M	265.40M
	Net Debt
331.09M	327.65M	336.25M	134.93M	228.68M
	Total Liabilities
615.48M	619.11M	585.73M	272.20M	288.88M
	Stockholders Equity
64.05M	83.34M	79.00M	-3.53M	-62.00M
Cash Flow		Free Cash Flow
55.98M	54.82M	44.11M	33.14M	-35.45M
	Operating Cash Flow
56.51M	55.60M	44.35M	41.35M	1.40M
	Investing Cash Flow
-386.00K	-785.00K	-245.00K	-8.20M	-36.84M
	Financing Cash Flow
-59.15M	-46.38M	-36.62M	-26.56M	61.90M

European Wax Center Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 5.70
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For EWCZ, the sentiment is Positive. The current price of 5.7 is above the 20-day moving average (MA) of 4.93, above the 50-day MA of 4.07, and below the 200-day MA of 5.86, indicating a neutral trend. The MACD of 0.44 indicates Negative momentum. The RSI at 69.45 is Neutral, neither overbought nor oversold. The STOCH value of 66.47 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for EWCZ.

European Wax Center Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
EWCZ	68 Neutral	$313.57M	27.91	11.85%	―	-2.93%	-17.72%
ACU	68 Neutral	$149.81M	16.13	9.68%	1.52%	2.56%	-47.22%
Sector *	62 Neutral	$6.93B	11.25	2.95%	3.88%	2.69%	-24.71%
TANH	56 Neutral	$2.76M	1.82	-1.68%	―	6.27%	-34.07%
SKIN	56 Neutral	$207.92M	―	-70.44%	―	-17.97%	49.13%
NUS	54 Neutral	$395.80M	―	-4.93%	3.00%	-11.85%	-1080.00%
GROV	46 Neutral	$54.34M	―	-180.03%	―	-19.83%	22.76%

European Wax Center Corporate Events

European Wax Center Elects New Board Directors

On June 3, 2025, European Wax Center, Inc. held its annual meeting of stockholders, where key proposals were voted upon. The stockholders elected directors Alexa Bartlett and Julia Hunter to the Board of Directors for a three-year term. Additionally, the selection of Deloitte & Touche LLP as the company’s independent registered public accounting firm for the year ending January 3, 2026, was ratified.

The most recent analyst rating on (EWCZ) stock is a Buy with a $6.00 price target. To see the full list of analyst forecasts on European Wax Center stock, see the EWCZ Stock Forecast page.

European Wax Center Approves 2025 Inducement Plan

On March 21, 2025, European Wax Center’s board approved the 2025 Inducement Plan, allowing the company to grant up to 4,000,000 shares of Class A Common Stock as stock-based awards to new or returning employees. This strategic move, not requiring stockholder approval, aims to enhance the company’s ability to attract and retain talent, potentially strengthening its market position and operational capabilities.

European Wax Center Appoints New CFO Amid Strategic Shifts

European Wax Center announced the appointment of Thomas Kim as Chief Financial Officer, effective April 7, 2025, succeeding Stacie Shirley who will remain as a strategic advisor until April 30, 2025. The company reported its fiscal 2024 results, highlighting a 21.9% increase in GAAP net income and a 15.2% rise in adjusted net income, despite a slight decrease in system-wide sales and total revenue. Looking forward, the company anticipates a transitional year in 2025, with plans to open 10-12 new centers and close 40-60 centers, while focusing on improving its marketing and support infrastructure to drive long-term growth.