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Investing.com - Guggenheim lowered its price target on Mister Car Wash (NYSE:MCW) Inc. (NASDAQ:MCW) to $8.00 from $9.50 on Monday, while maintaining a Buy rating on the stock. The company’s shares, currently trading at $5.75, have declined over 21% year-to-date, according to InvestingPro data.
The price target reduction follows what Guggenheim described as a "surprising" second-quarter shortfall in both top and bottom lines for the conveyorized car wash industry leader. InvestingPro analysis reveals significant debt concerns, with short-term obligations exceeding liquid assets and a current ratio of 0.33.
The firm attributed the underperformance primarily to "very weak retail, or non-member consumption trends," which has raised questions about the company’s near-to-intermediate-term growth algorithm.
Despite the 4-5% misses, which Guggenheim noted were meaningful for a predictable membership model, the company only slightly reduced its 2025 guidance at the high end, with base membership pricing and stepped-up marketing initiatives still being rolled out.
Guggenheim lowered its estimates and now projects high-single-digit EBITDA growth versus the previous low-double-digit algorithm, but maintained its Buy rating with shares trading at 8.2x 2026E EBITDA, representing a sub-1.0x PEG rate.
In other recent news, Mister Car Wash reported its second-quarter earnings for 2025, which did not meet analysts’ expectations. The company announced an earnings per share (EPS) of $0.11, which was below the projected $0.1247. Revenue also fell short of forecasts, coming in at $265 million compared to the expected $271.82 million. Despite the earnings miss, there was a slight increase in aftermarket trading. Analysts had anticipated better financial results, but the company did not meet these projections. These recent developments may influence investor sentiment and future analyst evaluations. The company’s performance in this quarter highlights the challenges it faced in aligning with market expectations.
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