DRVN Stock Forecast & Price Target

Driven Brands Holdings Inc. is anticipating same-store sales (SSS) growth of 1% to 3%, with a net store growth forecasted between 175 and 200 locations, showcasing an expansion strategy that is on track. The company's Maintenance segment, particularly the Take 5 Oil Change, is demonstrating solid performance, with EBITDA margins improving to 17.4% and SSS growth reaching 9.2% in the fourth quarter, outperforming other segments. Furthermore, the integration of cross-selling initiatives and enhanced member penetration could lead to an earnings potential of $2.00 per share, highlighting positive attributes that could significantly enhance the company’s stock valuation moving forward.

Driven Brands Holdings Inc. has indicated a stagnant EBITDA margin outlook for 2025, with an implied margin of 25.3% reflecting minimal improvement from the previous year and lower guidance than market expectations, primarily due to divesting $50 million in car wash EBITDA. The company's reported Q4 results showcased sales falling approximately 1% short of consensus, coupled with disappointing same-store sales growth of 1.3%, which was below anticipated figures, suggesting waning consumer demand amid deteriorating franchisee relationships and declining discretionary income. Additionally, macroeconomic challenges, including inflationary pressures and uncertainty, have contributed to a cautious FY2025 outlook, pointing to potential risks from increased competition and the impact of electric vehicle adoption on market share and margins.