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European Wax Center (EWCZ)
NASDAQ:EWCZ
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European Wax Center (EWCZ) AI Stock Analysis

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EWCZ

European Wax Center

(NASDAQ:EWCZ)

Rating:65Neutral
Price Target:
$5.00
▲(16.55% Upside)
European Wax Center's overall stock score reflects solid financial performance and promising strategic initiatives, tempered by current bearish technical indicators and moderate valuation. Leadership changes and improved marketing efficiency are positive, but challenges in sales and regional performance weigh on the outlook.
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.
Long-term Outlook
European Wax Center remains highly profitable with a still-compelling long-term outlook.
Negative Factors
Market Challenges
New guest acquisition could be tempered as the consumer environment is pressured and tariffs add uncertainty to the mix.
Store Closures
Shares are down (~15%) as the number of store closures in '25 will likely be more than previously expected.
Unit Growth
Closures to outweigh openings in '25, resulting in a ~4% decline in units.

European Wax Center (EWCZ) vs. SPDR S&P 500 ETF (SPY)

European Wax Center Business Overview & Revenue Model

Company DescriptionEuropean Wax Center (EWCZ) is a leading personal care brand specializing in hair removal services. The company is renowned for its unique waxing techniques and high-quality products, offering a comprehensive range of services including body and facial waxing for both men and women. With a strong presence in the beauty and wellness sector, European Wax Center is committed to providing exceptional customer experiences through its network of franchised locations across the United States.
How the Company Makes MoneyEuropean Wax Center primarily generates revenue through its franchised locations, where franchisees pay initial franchise fees and ongoing royalties based on their sales. Additionally, the company earns income from the sale of proprietary waxing products, which are used in their services and also available for purchase by customers. These products contribute to both in-store sales and online revenue. The company's earnings are further supported by strategic marketing partnerships and customer loyalty programs that enhance brand visibility and customer retention.

European Wax Center Earnings Call Summary

Earnings Call Date:Aug 13, 2025
(Q2-2025)
|
% Change Since: |
Next Earnings Date:Oct 30, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mix of positive and negative aspects. The company showed early signs of success in strategic initiatives, leadership enhancements, and improved marketing efficiency. However, challenges include a slight decline in system-wide sales, revenue, and ongoing regional difficulties in California. Despite these challenges, the strong EBITDA margin and leadership changes suggest potential for future growth.
Q2-2025 Updates
Positive Updates
Encouraging Early Signs of Strategy Success
The company reported $257.6 million in system-wide sales and a 30 basis point increase in same-store sales growth. Adjusted EBITDA reached $21.6 million, with early signs of strategy success and improvement in transaction growth year-over-year.
Leadership Enhancements
European Wax Center expanded its leadership team with Angela Jaskolski as Chief Operating Officer and Kurt Smith as Chief Development Officer, enhancing capabilities in operations and development.
Improved Marketing Efficiency
The company reported a 40% improvement in cost per acquisition since the beginning of the year, enhancing marketing efficiency and guest targeting.
Strong Adjusted EBITDA Margin
Adjusted EBITDA margin increased 420 basis points to 38.7%, reflecting disciplined execution and operational efficiency.
Wax Pass Sales Growth
Wax Pass sales increased almost 2% year-over-year, indicating strong guest engagement with the product offering.
Negative Updates
System-Wide Sales Decline
System-wide sales decreased 1% year-over-year, attributed to a decrease in same-day services and retail sales.
Revenue and Center Closures
Total revenue dropped by 6.6% to $55.9 million, and 5 centers were closed in the quarter, with additional closures expected in Q3 and Q4.
Challenges in the West Coast
The West Coast, particularly California, continues to face challenges, impacting regional performance.
Company Guidance
During the European Wax Center's Second Quarter 2025 Earnings Call, the company reported $257.6 million in system-wide sales, a 30 basis point increase in same-store sales, and $21.6 million in adjusted EBITDA. While system-wide sales decreased by 1% compared to the previous year, there was a noted improvement in year-over-year transaction growth, with same-store sales rising by 1.7% in June and 1.5% in the early weeks of Q3. The company opened two new centers but closed five, maintaining 1,059 centers by quarter-end. Revenue decreased by 6.6% due to lower product and retail sales, while the gross margin increased to 74.6%. The company expects system-wide sales to reach between $940 million and $950 million for the full year, with same-store sales projected to be flat to up by 1%. Adjusted EBITDA guidance remains steady at $69 million to $71 million, reflecting strong operational efficiency.

European Wax Center Financial Statement Overview

Summary
European Wax Center exhibits solid financial health with strong operational efficiency and cash flow management. Despite a lower net profit margin, the company maintains healthy revenue growth and effective leverage control. The balance sheet poses some stability concerns with low equity levels, yet cash flow metrics strongly support liquidity and operational sustainability.
Income Statement
75
Positive
European Wax Center shows a strong performance with a notable TTM (Trailing-Twelve-Months) gross profit margin of approximately 73.6% and consistent revenue growth over previous years. However, net profit margin is relatively low at about 4.4% for TTM, reflecting some profit retention challenges. The company has improved its EBIT margin to 21.8% in TTM, indicating efficient operating performance.
Balance Sheet
60
Neutral
The balance sheet reveals a moderate debt-to-equity ratio of 0.11 in TTM, showing effective leverage management. However, the equity ratio stands at approximately 9.9%, which is relatively low, indicating potential financial stability risks. Return on equity is at a satisfactory level of 13.5% in TTM, showcasing decent equity efficiency.
Cash Flow
80
Positive
The company demonstrates robust cash flow management with a strong free cash flow to net income ratio of 6.04 in TTM, indicating excellent cash generation relative to net income. The operating cash flow to net income ratio is also healthy at 6.16, underscoring solid operational cash efficiency. Free cash flow growth has been positive, contributing to overall financial resilience.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue161.04M216.92M221.02M207.35M178.68M103.41M
Gross Profit118.98M159.60M158.39M148.12M131.84M67.90M
EBITDA47.65M62.64M65.44M60.51M45.03M16.36M
Net Income8.01M10.46M8.93M7.31M6.91M-21.50M
Balance Sheet
Total Assets713.79M707.07M734.12M716.03M613.44M606.90M
Cash, Cash Equivalents and Short-Term Investments58.33M49.73M52.73M44.22M43.30M36.72M
Total Debt381.33M380.82M380.39M380.47M178.23M265.40M
Total Liabilities615.28M615.48M619.11M585.73M272.20M288.88M
Stockholders Equity70.45M64.05M82.02M79.00M179.39M-62.00M
Cash Flow
Free Cash Flow42.58M55.98M54.82M44.11M33.14M-35.45M
Operating Cash Flow43.67M56.51M55.60M44.35M41.35M1.40M
Investing Cash Flow-1.09M-386.00K-785.00K-245.00K-8.20M-36.84M
Financing Cash Flow-37.03M-59.15M-46.38M-36.62M-26.56M61.90M

European Wax Center Technical Analysis

Technical Analysis Sentiment
Negative
Last Price4.29
Price Trends
50DMA
4.94
Negative
100DMA
4.70
Negative
200DMA
5.31
Negative
Market Momentum
MACD
-0.11
Negative
RSI
41.46
Neutral
STOCH
30.02
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For EWCZ, the sentiment is Negative. The current price of 4.29 is below the 20-day moving average (MA) of 4.47, below the 50-day MA of 4.94, and below the 200-day MA of 5.31, indicating a bearish trend. The MACD of -0.11 indicates Negative momentum. The RSI at 41.46 is Neutral, neither overbought nor oversold. The STOCH value of 30.02 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for EWCZ.

European Wax Center Risk Analysis

European Wax Center disclosed 69 risk factors in its most recent earnings report. European Wax Center 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

European Wax Center Peers Comparison

Overall Rating
UnderperformOutperform
Sector (63)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
76
Outperform
$162.95M16.299.50%1.42%0.70%-48.75%
74
Outperform
$604.37M6.0913.68%1.97%-11.79%
65
Neutral
$243.53M21.8110.98%-5.04%-22.01%
63
Neutral
$20.54B14.34-2.77%3.14%2.08%-6.12%
60
Neutral
$263.80M-26.54%-15.33%75.52%
57
Neutral
$2.74M1.82-1.68%-9.25%-109.49%
48
Neutral
$62.34M-197.15%-18.44%37.92%
* Consumer Defensive Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
EWCZ
European Wax Center
4.29
-2.61
-37.83%
ACU
Acme United
43.02
-0.40
-0.92%
NUS
Nu Skin
12.17
3.49
40.21%
TANH
Tantech Holdings
2.02
-3.44
-63.00%
SKIN
Beauty Health
2.08
0.29
16.20%
GROV
Grove Collaborative Holdings
1.52
0.23
17.83%

European Wax Center Corporate Events

Executive/Board ChangesBusiness Operations and Strategy
European Wax Center Announces New Leadership Appointments
Positive
Jul 16, 2025

On July 16, 2025, European Wax Center, Inc. announced the appointment of Angela Jaskolski as Chief Operating Officer and Kurt Smith as Chief Development Officer, effective August 18, 2025, and July 22, 2025, respectively. These appointments aim to enhance the company’s operational efficiency and franchise development, with Jaskolski bringing extensive experience in operations and Smith in franchise development. The leadership changes are expected to support the company’s growth strategy and strengthen its franchisee network.

Executive/Board ChangesShareholder Meetings
European Wax Center Elects New Board Directors
Neutral
Jun 5, 2025

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.

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.Date of analysis: Aug 26, 2025