Will Revenue Growth and Upbeat Guidance Reshape Driven Brands Holdings' (DRVN) Investment Narrative?

• Driven Brands Holdings Inc. recently reported third quarter results, delivering year-over-year revenue growth to US$535.68 million, a turnaround to net income of US$60.86 million, and raised its full-year earnings guidance for 2025.
• The company's continued expansion of its Take 5 Oil Change segment, alongside organizational changes and improved leverage, signals a focus on strengthening both operational and financial stability.
• Let's examine how Driven Brands' improved profitability and updated outlook may shape its investment narrative moving forward, especially given ongoing momentum in same-store sales growth.

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Driven Brands Holdings Investment Narrative Recap

Investors who see long-term value in Driven Brands Holdings are likely focused on its ability to grow recurring service revenues, expand its Take 5 Oil Change footprint, and deliver improved profitability, even as competition, changing vehicle technology, and slowing same-store sales growth pose pressures. The latest quarterly results highlight continued revenue growth and a significant swing to profitability, but ongoing softness in the Franchise Brands segment remains the most important near-term challenge. Short-term momentum from Take 5 is helping offset these risks for now.

One of the most relevant recent developments is Driven Brands' updated fiscal year 2025 guidance, which confirms revenue expectations between US$2.10 and US$2.12 billion and narrows same-store sales growth to the low end of the initial 1 percent to 3 percent range. This more cautious outlook comes as management sustains its net new store targets, keeping store network growth a key element of the near-term story.

However, even as results improve, investors should be mindful of the persistent weakness in same-store sales for legacy Franchise Brands, since ...

Read the full narrative on Driven Brands Holdings (it's free!)

Driven Brands Holdings' outlook anticipates $2.6 billion in revenue and $250.1 million in earnings by 2028. Achieving this would require 2.8% annual revenue growth and a $556.7 million increase in earnings from the current level of -$306.6 million.

Uncover how Driven Brands Holdings' forecasts yield a $21.92 fair value, a 55% upside to its current price.

Exploring Other Perspectives

Retail investors in the Simply Wall St Community provided fair value estimates for Driven Brands ranging from US$21.92 to US$38.68 based on two distinct forecasts. In contrast, continued soft same-store sales in Franchise Brands may affect the company’s future earnings power, so it is important to explore how various investors are assessing these risks.

Explore 2 other fair value estimates on Driven Brands Holdings - why the stock might be worth just $21.92!

Build Your Own Driven Brands Holdings Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Driven Brands Holdings research is our analysis highlighting 4 key rewards and 1 important warning sign that could impact your investment decision.
• Our free Driven Brands Holdings research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Driven Brands Holdings' overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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