Kyle Mowery of GrizzlyRock Capital presented his in-depth investment thesis on Driven Brands Holdings (US: DRVN) at Best Ideas 2025, held from January 9-24.
Thesis Summary
Driven Brands offers the best of both worlds: private equity control and stewarship as well as public market liquidity and the ability to purchase an equity stake at a discounted valuation.
Kyle sees Driven Brands as a classic “GoodCo/BadCo” setup, with Maintenance, Collision and Glass Repair, and International Car Wash as the good businesses (90% of 2024E EBITDA) and United States Car Wash as the bad business (10% of 2024E EBITDA).
DRVN shares are down ~50% over the past 18 months due to poor US car wash performance and CFO turnover. DRVN trades at a low stock price and valuation even as earnings growth appears set to inflect materially higher.
Kyle sees several upside catalysts, including (1) a sale or stabilization of the car wash segment (early 2025); (2) growth in the “Take 5” business may drive improved investor perception (2025); (3) resegmentation (2025); and (4) 2025 and 2026 earnings guidance (February 2025 and February 2026).
Slides
Let’s listen to the full session and look over the transcript.
