DRVN Stock Forecast & Price Target

Driven Brands Holdings Inc. has demonstrated a positive outlook through significant improvements in customer satisfaction, with its Take 5 segment achieving a +1.0% increase year-over-year, outpacing its competitors. The company has shown strong growth metrics, as evidenced by the increase in vehicles serviced per day at mature stores, rising from 44.6 in 2018 to 52.9 in 2022, alongside encouraging trends in attachment rates moving from the mid-to-high 40s to the low 50s. Additionally, plans to open 170 new Take 5 locations in 2023 and the substantial revenue growth reflected in the average unit volumes of Take 5 franchises suggest a robust expansion strategy and a solid foundation for future financial performance.

Driven Brands Holdings Inc. faces a negative outlook primarily due to a reduction in the target multiple for its Take 5 segment, reflecting a broader decline in its peer group and pressures from decreased discretionary spending among lower-income consumers. The collision service sector has been experiencing a downturn for several quarters, with projections indicating a high-single-digit percentage decline, further compounded by expectations of same-store sales landing at the lower end of the previous 1-3% growth range. Additionally, broader economic concerns, highlighted by low consumer sentiment, alongside risks such as deteriorating franchisee relationships and increased competition, threaten the company’s revenue stability and growth potential.