In this pitch deck, analysts Linus Öberg, Filip Berg, and Axel Andersson deliver a
comprehensive analysis of Driven Brands. The company is the largest comprehensive
automotive service platform in the U.S. with well-renowned brands. Recent
overreactions to short-term headwinds have provided an attractive entry point for
investors. Utilizing both a DCF and SoP-peer valuation, a target price of $28, equivalent
to a 130% upside, is justified.
Key takeaways
● The hidden gem, Take 5 Oil, is set for continued growth with its best-in-class unit
economics, strong tailwinds, and long-term market potential.
● Issues in the car wash and auto glass segments that caused stock declines will
be resolved. As the consolidation phase passes, underperforming locations are
closed, and new stores ramp up.
● Geared for significant cash conversion: Capex is set to decrease materially as
the car wash and auto glass businesses complete their integration, and operating
cash flow increases with new franchised and company-operated Take 5 Oil
changes.