Investment firm Stephens has adjusted its price target for Mister Car Wash (MCW, Financial), reducing it from $9 to $8.50. Despite maintaining an Equal Weight rating on the stock, the firm expresses a cautious outlook as the company prepares to announce its first-quarter earnings on April 30.
The firm anticipates that Mister Car Wash's Q1 financial performance will meet market expectations. Looking forward, Stephens identifies several factors that could boost optimism for the company's second-quarter results. However, the firm remains cautious, opting to observe how recent pricing changes in the Unlimited Wash Club (UWC) and the subsequent effects on membership retention and the re-engagement of infrequent customers impact overall business performance.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 12 analysts, the average target price for Mister Car Wash Inc (MCW, Financial) is $9.72 with a high estimate of $11.00 and a low estimate of $6.00. The average target implies an upside of 36.85% from the current price of $7.10. More detailed estimate data can be found on the Mister Car Wash Inc (MCW) Forecast page.
Based on the consensus recommendation from 15 brokerage firms, Mister Car Wash Inc's (MCW, Financial) average brokerage recommendation is currently 1.9, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Mister Car Wash Inc (MCW, Financial) in one year is $10.45, suggesting a upside of 47.18% from the current price of $7.1. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Mister Car Wash Inc (MCW) Summary page.
MCW Key Business Developments
Release Date: February 19, 2025
- Revenue Growth: 7% increase for the full year 2024.
- Adjusted EBITDA Growth: 12% increase for the full year 2024.
- Adjusted Earnings Per Share Growth: 16% increase for the full year 2024.
- Same-Store Sales Growth: 6% increase in Q4 2024.
- New Store Openings: 40 new locations in 2024, surpassing 500 total stores.
- UWC Membership: Over 2.1 million members, a 2% increase year-over-year.
- EBITDA Margin: Increased 100 basis points to 31.2% in Q4 2024.
- Net Income: $31 million in Q4 2024.
- Net Income Per Diluted Share: $0.09 in Q4 2024.
- Cash and Cash Equivalents: $67 million at the end of Q4 2024.
- Long-Term Debt: $920 million, a $22 million sequential decrease.
- Sale-Leaseback Transactions: 21 transactions for $98 million in Q4 2024.
- 2025 Revenue Outlook: $1.38 billion to $1.64 billion.
- 2025 Comparable Store Sales Growth: 1% to 3% expected.
- 2025 Adjusted EBITDA Outlook: $334 million to $346 million.
- 2025 Adjusted Net Income Per Diluted Share: $0.43 to $0.45.
- 2025 Capital Expenditures: $275 million to $305 million.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Mister Car Wash Inc (MCW, Financial) reported a strong fourth quarter with comp store sales growth of 6%, marking the seventh consecutive quarter of comp growth.
- The company achieved record revenues and EBITDA for the full year 2024, with sales up 7% and adjusted EBITDA growing by 12%.
- Mister Car Wash Inc (MCW) successfully opened 40 new locations in 2024, surpassing the 500-store milestone.
- The introduction of the premium Titanium service exceeded expectations, with 23% of UWC membership penetration.
- The company maintained strong cost discipline, resulting in adjusted EBITDA and adjusted net income that exceeded guidance.
Negative Points
- Consumer behavior remains difficult to predict, and the non-subscription business is sensitive to weather, leading to a cautiously optimistic view for retail trends.
- The competitive environment remains crowded, with new entrants expected to continue entering the market, albeit at a slower pace.
- Retail sales are anticipated to face continued headwinds in 2025, with a mid-single-digit decline expected.
- The company is experiencing increased labor rates and higher rent expenses due to new store growth and sale leasebacks.
- Mister Car Wash Inc (MCW) is cautious about extrapolating current trends due to unpredictable consumer patterns and external factors like inflation.
