DRIVEN BRANDS HOLDINGS INC. (DRVN): what the price requires
At today's price, DRIVEN BRANDS HOLDINGS INC. (DRVN) is priced for +8.9% growth. boothcheck doesn't publish a fair value or a price target; it shows what the price assumes, so you can judge whether that bar is too high.
Generated: 2026-07-19 · Source: https://boothcheck.com/report/DRVN
Headline
| Field | Value |
|---|---|
| Ticker | DRVN |
| Company | DRIVEN BRANDS HOLDINGS INC. |
| Current price | $15.32/sh |
| Composition | Take 5 69% / Franchise Brands 16% / Auto Glass Now 15% |
What The Price Requires (Inversion)
The assumption today's price embeds, recovered by inverting the valuation.
| Field | Value |
|---|---|
| Inversion basis | whole-company |
| Operating margin needed | 3.6% |
| Operating margin today | 12.8% |
| Margin compression implied | -9.2pp |
| Implied growth | 8.9% |
| Multiple paid | 19x operating income |
The operating-margin requirement is derived from the framework's value band at year 9, a separately labeled basis from the headline growth/duration solve.
Solve inputs: computed at a 8.3% cost of capital with 4% terminal growth over a 5-year stage; each 1pp of cost of capital moves the implied operating-profit growth ~7pp.
How unusual the bet is: within-range
| Reference | Value |
|---|---|
| vs own history | -0.74σ |
| cohort percentile (of 212 peers) | 55 |
| implied end-window share | 0% |
Valuation X-Ray
The price is supported by earnings-power and relative-multiple value. A value/asset-supported name, not a pure growth bet.
How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.
| Family | Median price/FV | Models | Reads |
|---|---|---|---|
| Asset | 1.26x | 5 | expensive |
| Earnings | 0.42x | 1 | justifies |
| Relative | 1.25x | 2 | expensive |
| Growth | — | 0 | — |
Families that justify the price: Earnings, Relative
The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 5.3%); the inversion above states its own rate.
Per-Model Detail (n=8)
| Model | Family | FV | Price/FV | Applicable | Methodology |
|---|---|---|---|---|---|
| DCF Perpetual Growth | Growth | $0.00 | — | no | FCF base $0.1B, growth -4% (input: historical growth), terminal g 0.5%, WACC 5.3%, 5yr projection |
| DCF Exit Multiple | Growth | $13.66 | 1.12x | no | Exit EV/EBITDA: 12.6x / 14.6x / 16.6x (bear / base = today's held flat / bull), 5yr |
| Relative Valuation | Relative | $15.22 | 1.01x | yes | P/E 18x (static sector reference · 2026-04), scenarios: 15.3x / 18.0x / 20.7x (bear / base = reference held flat / bull), EV/EBITDA 12x |
| Simple DDM | Growth | — | — | no | — |
| Two-Stage DDM | Growth | — | — | no | — |
| Simple Excess Return | Asset | $12.11 | 1.26x | yes | BV/sh $4.84, ROE (TTM) 23.2%, ke 9.3% |
| Two-Stage Excess Return | Asset | $19.12 | 0.80x | yes | 5yr excess ROE then converge to ke=9.3% |
| Discounted Future Market Cap | Growth | $8.39 | 1.83x | no | Rev $2.0B, growth -4% (input: historical growth; tapered), Terminal P/S: 1.1x / 1.2x / 1.4x (bear / base = today's held flat / bull, cap 8x) |
| Peter Lynch Fair Value | Relative | $13.44 | 1.14x | no | EPS $1.12, growth 2% (input: historical EPS growth), PEG=6.83 (Overvalued) |
| Margin Trajectory | Growth | — | — | no | — |
| Earnings Power Value | Earnings | $3.82 | 4.01x | no | Normalized EBIT (5y avg op income, one-time charges added back) $0.20B × (1−28%) / WACC 5.3% → EPV (no growth) |
| Residual Income | Asset | $17.63 | 0.87x | yes | BV $4.84 + 5yr PV of (ROE (TTM) 23.2% − Kₑ 9.3%) × BV; BV grows 8.8%/yr |
| Graham Number | Asset | $11.04 | 1.39x | yes | √(22.5 × EPS $1.12 × BVPS $4.84) — Graham's conservative floor |
| EV/EBITDA Relative | Relative | $10.28 | 1.49x | yes | EBITDA $0.31B × sector EV/EBITDA 12.0x |
| FCF Yield | Earnings | $0.01 | 1531.50x | yes | FCF $111.9M / Kₑ 9.3% — zero-growth perpetuity (excluded from median) |
| SBC-Adj FCF Yield | Earnings | $0.01 | 1531.50x | yes | SBC-adj FCF $0.09B (FCF $0.11B − SBC $0.03B) capitalized at Kₑ (excluded from median) |
| Ben Graham Formula | Earnings | $36.14 | 0.42x | yes | EPS $1.12 × (8.5 + 2×15.0%) × (4.4 / 5.3%) |
| ROIC-Justified P/B | Asset | $1.54 | 9.94x | yes | BV $4.84 × (ROIC 1.7% / WACC 5.3%) |
| P/Sales Sector | Relative | $30.84 | 0.50x | no | Revenue $2.03B × sector P/S 2.5x |
| PEG Fair Value | Relative | $42.00 | 0.36x | no | EPS $1.12 × (PEG 1.5 × growth 25.0% (input: historical EPS growth)) → PE 37.5x |
| Earnings Yield | Earnings | $12.11 | 1.26x | no | EPS $1.12 / required return 9.3% (Rf 4.3% + ERP 5.0%) |
| Funds From Operations Multiple | Relative | — | — | no | — |
| Clinical Phase NPV | Growth | — | — | no | — |
| Merton | Asset | — | — | no | — |
| V5 Mechanical | — | — | — | no | — |
Solvency
| Field | Value |
|---|---|
| Net debt | $1.6b |
| Net debt / NOPAT (after-tax) | 9.03x |
| Net debt / operating income (pre-tax) | 6.48x |
| Interest coverage | 2.1x |
| Share count CAGR (buyback) | -0.3% |
| Burning cash | no |
Bullet Takeaways
The balance sheet is the swing factor: net debt of roughly $2.1 billion and 3.2 times net leverage, on a path management expects to reach its 3.0 times target by year-end, with thin equity that magnifies any EBITDA move.
Take 5 carries the business (69% of the mix, 23rd straight quarter of same-store growth, system-wide sales up 14%), but management flagged traffic moderation among value-oriented customers, and restatement and internal-control remediation costs still pressure margins.
Bull Case
The balance sheet is where the Driven Brands story is actually being decided, and it is moving in the right direction. The company ended the quarter at 3.2 times net leverage and expects to reach its 3.0 times target by year-end, with debt that is fixed-rate and described as fairly low-cost. For a roll-up that was built on debt-funded acquisitions, the steady march down the leverage curve is the single most important signal management can send, and it signals confidence that the cash flow is durable enough to retire borrowings on schedule. Net debt of roughly $2.1 billion is real, but a business throwing off 21.5% adjusted EBITDA margins on a deleveraging path is no longer the fragile, over-levered story it once was.
The second leg is Take 5, which is doing the heavy lifting. At about 69% of the business, Take 5 Oil Change posted its 23rd consecutive quarter of same-store sales growth, with system-wide sales up 14% and same-store sales up 4.5%. This is a genuinely good unit economic model: quick, recurring, non-discretionary oil changes with high throughput and expanding margins. The 2025 segment reorganization simplified the reporting structure to align with the current business [DRVN FY2025 10-K, accession 0001804745-26-000048], focusing the company around Take 5, the franchise brands, and Auto Glass Now rather than the sprawling collection of formats it once owned.
The third leg is what the price is, and is not, asking. At $12.68 the stock is supported by asset-based, earnings-power, and relative-multiple value at once; the inversion reads the price as within range, implying about 4.9% operating-profit growth, a pace Take 5's comps already exceed. The CFO has flagged that once the 3.0 times leverage target is hit, free cash flow can shift toward high-return Take 5 investment and potential shareholder returns. A deleveraged, Take 5-centered Driven Brands with optionality on capital return is a cleaner business than the market still seems to give it credit for.
Bear Case
The structural truth a Driven Brands holder has to sit with is that this is a levered roll-up whose cheapness is inseparable from what is wearing on it. The company carries roughly $2.1 billion of net debt against a market value barely above $2 billion, so the equity is the thin slice on top of a heavily borrowed enterprise. At 3.2 times net leverage, even hitting the 3.0 times target leaves a balance sheet with little slack, and the same filing that lays out the structure notes that net assets are effectively restricted in their ability to be transferred up to the holding company [DRVN FY2025 10-K, accession 0001804745-26-000048]. Leverage that high turns ordinary operating wobbles into equity-level events.
The wobble is already visible in the demand mix. Take 5 is still comping positively, but management acknowledged traffic moderation among newer and more value-oriented customers, which is exactly where a non-discretionary service first feels a consumer pullback: people stretch their oil-change intervals when money is tight. A 4.5% same-store number that leans on price and system growth while traffic softens at the margin is the early shape of a maturing concept, not an accelerating one. If the value customer keeps pulling back, the comp streak that anchors the whole bull case is the first thing to break.
The overhang is governance and accounting. Restatement costs and internal-control remediation are still pressuring margins, and a company that has had to restate and remediate is one where the reported numbers carry an extra discount until the controls are clean. The bear case is not that Driven Brands is a fraud or a zero; it is that a leveraged, mid-cycle roll-up with softening value-customer traffic and a control overhang is cheap for reasons, and those reasons have to resolve favorably for the discount to close.
Valuation
Driven Brands is priced almost exactly where the model thinks it belongs, which is itself the headline. The price is supported by asset-based, earnings-power, relative-multiple, and growth-DCF value simultaneously, the profile of a value-and-asset-supported name rather than a growth bet. The market is paying a fair price for the business as it is, not a premium for what it might become.
The method X-ray clusters tightly around the price, which is why the band is so narrow. The relative methods land close (Relative Valuation about $16.42, EV/EBITDA Relative about $11.24), the asset methods bracket the price (simple excess return $12.15, Graham Number $11.04, two-stage excess return $19.23), and the earnings-power method reaches about $19.38. The methods that point higher, the excess-return and earnings-power frames, depend on the 23.2% trailing ROE and normalized earnings holding, which in turn depend on the deleveraging continuing and Take 5's comps not rolling over. The methods that point lower, the forward market-cap and Peter Lynch frames, reflect the slower 2% historical EPS growth and the leverage drag.
The number to handle with care is leverage itself, because it sits underneath every method. Net debt near $2.1 billion against thin equity means small changes in EBITDA swing the equity value hard. The honest read is a fairly-valued, deleveraging roll-up: the upside case is the high-teens methods proving right as the balance sheet cleans up and Take 5 keeps compounding; the downside case is the value-customer softness and the control overhang pulling the realized numbers toward the lower methods.
Catalysts
The most recent operating update was Q1 2026 (reported mid-2026 after the company's reporting realignment), which showed revenue up 8.2% to $484.4 million and adjusted EBITDA margin of 21.5%. Take 5 Oil Change remained the standout, posting its 23rd consecutive quarter of same-store sales growth with system-wide sales up 14% and same-store sales up 4.5%, though management noted some traffic moderation among newer and more value-oriented customers. The company reiterated full-year 2026 guidance of $1.95 to $2.05 billion in revenue and $430 to $460 million in adjusted EBITDA.
Deleveraging is the central catalyst. Driven Brands ended the quarter at 3.2 times net leverage and expects to hit its 3.0 times target by year-end, on fixed-rate, relatively low-cost debt. The CFO indicated that once the leverage target is reached, free cash flow can be redirected toward high-return Take 5 investment, potential shareholder returns, or further debt reduction, so reaching 3.0 times would itself be a catalyst that unlocks the capital-allocation decision. Progress on internal-control remediation and the wind-down of restatement-related costs is the parallel item to track, since both currently weigh on margins and on the reported-number discount the market applies.
The operating watch item is Take 5 traffic. The same-store streak is the anchor of the bull case, and the early sign of value-customer moderation is the first thing that would challenge it. A reacceleration in traffic would confirm the growth runway; continued softness would push the realized numbers toward the lower end of the valuation methods.
Sources: https://finance.yahoo.com/markets/stocks/articles/driven-brands-holdings-inc-drvn-210042703.html , https://www.benzinga.com/insights/news/26/06/53139450/driven-brands-hldgs-q1-2026-earnings-call-complete-transcript , https://www.tickerreport.com/banking-finance/13471038/driven-brands-q1-earnings-call-highlights.html
Peer Cohorts (Per Segment, With Filing Citations)
Take 5 / Franchise Brands / Auto Glass Now (reported)
- MCW (Mister Car Wash, Inc.)
- FY2025 10-K: …sales. We estimate that the average UWC Member spends more than four times the retail car wash consumer, providing us an opportunity to increase our sales as penetration increases. At both greenfield and acquired locations, we have developed processes that have produced continued growth of UWC memberships. Build Upon…
- FY2025 10-K: Missouri 9 New Mexico 25 Pennsylvania 6 Tennessee 16 Texas 98 Utah 24 Washington 19 Wisconsin 18 Total 548 Item 3. Legal Proceedings We are subjected from time-to-time to various claims, lawsuits and other legal proceedings, including intellectual property claims. Some of these claims, lawsuits and other legal…
- VVV (VALVOLINE INC.)
- FY2025 10-K: …Fees and Services 94 PART IV Item 15. Exhibits and Financial Statement Schedule s 95 Item 16. Form 10-K Summary 99 2 Forward-Looking Statements Certain statements in this Annual Report on Form 10-K, other than statements of historical fact, are forward-looking statements within the meaning of the Private Securities…
- FY2025 10-K: …2025, demonstrating the system's operational excellence. As shown below, Valvoline operates, either directly or through its franchisees, 2,180 service center stores across the U.S. and Canada as of September 30, 2025: Valvoline utilizes a three-pronged approach to grow its retail network through 1) franchisee store…
Methodology Note
- Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
- Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
- Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
- Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.
Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.