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Investing.com - Piper Sandler downgraded Mister Car Wash Inc (NASDAQ:MCW) from Overweight to Neutral on Friday, while reducing its price target to $6.00 from $8.00. The stock, currently trading at $5.15, has declined over 32% in the past six months, according to InvestingPro data.
The downgrade comes as the car wash chain faces sluggish comparable sales trends and challenging upcoming quarterly comparisons that could potentially lead to negative comparable sales in the next two quarters. While the company maintains a healthy gross profit margin of 32.2%, InvestingPro analysis indicates the company operates with a significant debt burden, with short-term obligations exceeding liquid assets.
Piper Sandler noted that Mister Car Wash has experienced declining members per store year-over-year for six consecutive quarters with no clear end to this trend in sight.
The research firm acknowledged recent media speculation about "strategic options" for the company but indicated this was not sufficient reason to maintain a more positive rating on the stock.
Despite the near-term challenges prompting the downgrade, Piper Sandler still sees long-term growth potential for Mister Car Wash amid broader consolidation in the car wash industry.
In other recent news, Mister Car Wash reported its second-quarter earnings for 2025, which fell short of analyst forecasts. The company posted an earnings per share of $0.11, missing the projected $0.1247, while revenue reached $265 million, below the expected $271.82 million. Following this performance, Mizuho lowered its price target for Mister Car Wash to $9.00, maintaining an Outperform rating, due to the weaker-than-expected second-quarter results. Similarly, Guggenheim reduced its price target to $8.00, maintaining a Buy rating, citing a surprising shortfall in both earnings and revenue.
Additionally, Mister Car Wash has expanded its presence in Lubbock, Texas, by acquiring five Whistle Express car wash locations, increasing its total locations in the city from four to nine. The company is also reportedly exploring strategic options, as discussions with advisors are underway regarding a potential strategic review. These developments reflect Mister Car Wash’s ongoing efforts to strengthen its market position and explore future growth opportunities.
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