Mister Car Wash: UBS lowers PT to $7.25 from $8.25, maintains Neutral rating.

Mister Car Wash: UBS lowers PT to $7.25 from $8.25, maintains Neutral rating.

UBS has revised its price target for Mister Car Wash (MCW) to $7.25 from $8.25, while maintaining a Neutral rating on the stock. The move comes following the company's second-quarter earnings report, which saw a miss on both earnings per share (EPS) and revenue forecasts. The company reported an EPS of $0.11, falling short of the projected $0.1247, and revenue came in at $265 million, below the expected $271.82 million [1].

Despite the earnings miss, the stock saw a minor increase in aftermarket trading, rising by 1.28% to $6.33, after closing at $6.25 during regular trading hours. This mixed reaction reflects investor uncertainty, likely influenced by the earnings miss but buoyed by the company's strong subscription model and revenue growth [1].

Mister Car Wash's overall performance in the second quarter indicates growth challenges. While total revenue increased by 4% year-over-year, the company faced hurdles in achieving its earnings and revenue targets. The subscription-based Unlimited Wash Club (UWC) continues to drive sales, accounting for 76% of total revenue [1].

UBS analysts noted that the company's strong subscription model and the resilience of its UWC membership base provide a solid foundation for future growth. However, they expressed concerns about the company's ability to maintain growth while moderating new store openings and managing its debt burden [1].

Looking forward, Mister Car Wash has modestly revised the upper end of its full-year guidance. The company anticipates stronger comparable store sales growth in the third quarter compared to the fourth and plans to moderate new store openings in 2025 to focus on high-performing markets [1].

References:
[1] https://www.investing.com/news/transcripts/earnings-call-transcript-mister-car-wash-q2-2025-misses-forecasts-stock-mixed-93CH-4161474