Critical Review: Driven Brands (DRVN) and The Competition

Driven Brands (NASDAQ:DRVN) is one of 168 publicly-traded companies in the “Diversified Consumer Services” industry, but how does it compare to its competitors? We will compare Driven Brands to related companies based on the strength of its analyst recommendations, valuation, risk, dividends, institutional ownership, profitability and earnings.

Institutional & Insider Ownership

77.1% of Driven Brands shares are held by institutional investors. Comparatively, 48.1% of shares of all “Diversified Consumer Services” companies are held by institutional investors. 4.4% of Driven Brands shares are held by insiders. Comparatively, 19.8% of shares of all “Diversified Consumer Services” companies are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Profitability

This table compares Driven Brands and its competitors’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Driven Brands	9.08%	25.70%	4.96%
Driven Brands Competitors	-1.99%	-38.76%	2.99%

Earnings & Valuation

This table compares Driven Brands and its competitors top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Driven Brands	$1.86 billion	$140.16 million	13.01
Driven Brands Competitors	$3.22 billion	$218.13 million	16.56

Driven Brands’ competitors have higher revenue and earnings than Driven Brands. Driven Brands is trading at a lower price-to-earnings ratio than its competitors, indicating that it is currently more affordable than other companies in its industry.

Analyst Recommendations

This is a summary of recent recommendations and price targets for Driven Brands and its competitors, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Driven Brands	0	7	5	2	2.64
Driven Brands Competitors	1366	3357	5239	186	2.42

Driven Brands currently has a consensus price target of $17.18, indicating a potential upside of 17.88%. As a group, “Diversified Consumer Services” companies have a potential upside of 57.09%. Given Driven Brands’ competitors higher probable upside, analysts clearly believe Driven Brands has less favorable growth aspects than its competitors.

Risk & Volatility

Driven Brands has a beta of 0.95, meaning that its stock price is 5% less volatile than the S&P 500. Comparatively, Driven Brands’ competitors have a beta of 0.48, meaning that their average stock price is 52% less volatile than the S&P 500.

Summary

Driven Brands beats its competitors on 7 of the 13 factors compared.

About Driven Brands

Driven Brands Holdings Inc., together with its subsidiaries, provides automotive services to retail and commercial customers in the United States, Canada, and internationally. It offers various services, such as paint, collision, glass, repair, car wash, oil change, and maintenance services. The company also distributes automotive parts, including radiators, air conditioning components, and exhaust products to automotive repair shops, auto parts stores, body shops, and other auto repair outlets; windshields and glass accessories through a network of distribution centers; and consumable products, such as oil filters and wiper blades, as well as training services to repair and maintenance, and paint and collision shops. It sells its products and services under the CARSTAR, IMO, MAACO, Meineke Car Care Centers, PH Vitres D’Autos, Take 5 Oil Change, Take 5 Car Wash, Auto Glass Now, Fix Auto USA, and 1-800-Radiator & A/C, Spire Supply, and Automotive Training Institute brands. The company was founded in 1972 and is headquartered in Charlotte, North Carolina.