Mister Car Wash Inc. , the only pure-play car wash company on public markets after an initial public offering in late June, is expected to easily grow market share, thanks to a strong loyalty program and low costs, analysts said Tuesday.
At BMO, analyst Simeon Siegel agreed, assigning the stock an outperform rating and $25 price target, on expectations the biggest U.S. car wash operator will grow its market share beyond the current more than 5%, by integrating companies it has acquired, through greenfield developments, and growing membership of its loyalty program, Unlimited Wash Club, or UWC.
Management is targeting high single-digit unit growth driven by an average of about 10 M&A deals a year and about 20 greenfield openings, said Siegel. “With minimal variable costs, revenue growth should drive operating leverage, which along with labor efficiencies, and process-flow optimization should drive margin expansion, with management expecting +low double-digit long term EBITDA growth,” he wrote.
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