DRVN Stock Forecast & Price Target

Driven Brands Holdings Inc is experiencing positive growth, evidenced by a 1.0% increase in the satisfaction index for its Take 5 segment, outpacing competitors. The company is positioned for expansion with plans to open 170 new Take 5 locations in the current year, and strong performance metrics, such as vehicles serviced per day at mature stores rising to 52.9 in 2022 from 44.6 in 2018. Additionally, the diversity of revenue streams, particularly from the Maintenance segment, and improved financial health demonstrated by the prepaid securitized notes, highlight the company's solid operational foundation and potential for continued success.

Driven Brands Holdings Inc faces a negative outlook due to a significant reduction in its target multiple for the Take 5 segment from 11x to 9x FY27E EBITDA, driven by a decline in shares of its public oil change peer and a broader pullback in discretionary spending among lower-income consumers. The collision industry, a critical segment for the company, has experienced a downturn for several quarters, with estimates currently reflecting a decline in high-single digits percentage terms, further exacerbated by weak consumer sentiment at historically low levels. Additionally, full-year same-store sales are now projected to be at the low end of the previous 1-3% range, raising concerns about potential negative comparables in the fourth quarter.