Mister Car Wash's Earnings Miss Due to Weather and Macro Headwinds, BMO Lowers Price Target to $9

BMO Capital analyst Tristan Thomas-Martin has lowered Mister Car Wash's (MCW) price target to $9 from $11 and maintains an Outperform rating. Q2 earnings were negatively impacted by unfavorable weather and macro headwinds, while EBITDA was pressured by investments in repair and maintenance. However, the company is poised to benefit from a more rational industry backdrop and self-help initiatives.

Mister Car Wash (MCW) reported its second-quarter earnings for 2025, revealing a miss on both earnings per share (EPS) and revenue forecasts. The company posted an EPS of $0.11, falling short of the projected $0.1247. Revenue came in at $265 million, below the expected $271.82 million. Despite this, the stock saw a minor increase in aftermarket trading, rising by 1.28% to $6.33, after closing at $6.25, a 1.68% decrease during regular trading hours. The company's stock is trading near its 52-week low of $5.84, with 8 analysts recently revising their earnings estimates downward.

Key Takeaways

Mister Car Wash missed both EPS and revenue forecasts. The stock showed mixed reactions, declining during trading hours but recovering slightly in aftermarket trading. Revenue increased by 4% year-over-year, while comparable store sales grew by 1.2%. The subscription-based Unlimited Wash Club (UWC) continues to drive sales, accounting for 76% of total revenue. The company's overall performance in the second quarter indicates growth challenges, with total revenue increasing by 4% compared to the same period last year, but the company faced hurdles in achieving its earnings and revenue targets.

Financial Highlights

- Revenue: $265 million, a 4% increase year-over-year.
- Earnings per share: $0.11, below the forecasted $0.1247.
- Adjusted EBITDA: $87 million, a 2% decrease from the previous year.
- UWC membership: Over 2.2 million members.

Earnings vs. Forecast

Mister Car Wash reported an EPS of $0.11, missing the forecast of $0.1247 by approximately 11.6%. Revenue also fell short, coming in at $265 million against an anticipated $271.82 million. The earnings miss marks a deviation from any prior trend of meeting or exceeding expectations.

Market Reaction

The company's stock closed at $6.25, down 1.68% from the previous trading session. However, in aftermarket trading, the stock rose by 1.28% to $6.33. This mixed movement reflects investor uncertainty, likely influenced by the earnings miss but buoyed by the company’s strong subscription model and revenue growth.

Outlook & Guidance

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. It plans to moderate new store openings in 2025 to focus on high-performing markets. InvestingPro data indicates the company operates with a significant debt burden and a current ratio of 0.34, suggesting potential challenges in meeting short-term obligations.

BMO Capital Analyst Lowering Price Target

BMO Capital analyst Tristan Thomas-Martin has lowered Mister Car Wash's (MCW) price target to $9 from $11 and maintains an Outperform rating. Q2 earnings were negatively impacted by unfavorable weather and macro headwinds, while EBITDA was pressured by investments in repair and maintenance. However, the company is poised to benefit from a more rational industry backdrop and self-help initiatives.

References:

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