Driven Brands Holdings Inc. Fundamental Analysis
Driven Brands Holdings Inc. (DRVN) shows weak financial fundamentals with a PE ratio of 15.10, profit margin of 7.53%, and ROE of 19.02%. The company generates $1.9B in annual revenue with weak year-over-year growth of 1.54%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 31.0/100 based on profitability, valuation, growth, and balance sheet metrics. The F grade reflects weak fundamentals and significant financial concerns.
Fundamental Health Score
We analyze DRVN's fundamental strength across five key dimensions:
Efficiency Score
WeakDRVN struggles to generate sufficient returns from assets.
Valuation Score
ExcellentDRVN trades at attractive valuation levels.
Growth Score
ModerateDRVN shows steady but slowing expansion.
Financial Health Score
WeakDRVN carries high financial risk with limited liquidity.
Profitability Score
ModerateDRVN maintains healthy but balanced margins.
Key Financial Metrics
Is DRVN Expensive or Cheap?
P/E Ratio
DRVN trades at 15.10 times earnings. This indicates a fair valuation.
PEG Ratio
When adjusting for growth, DRVN's PEG of 0.06 indicates potential undervaluation.
Price to Book
The market values Driven Brands Holdings Inc. at 2.76 times its book value. This may indicate undervaluation.
EV/EBITDA
Enterprise value stands at -1.35 times EBITDA. This is generally considered low.
How Well Does DRVN Make Money?
Net Profit Margin
For every $100 in sales, Driven Brands Holdings Inc. keeps $7.53 as profit after all expenses.
Operating Margin
Core operations generate 12.41 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $19.02 in profit for every $100 of shareholder equity.
ROA
Driven Brands Holdings Inc. generates $3.37 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Driven Brands Holdings Inc. produces operating cash flow of $337.06M, showing steady but balanced cash generation.
Free Cash Flow
Driven Brands Holdings Inc. produces free cash flow of $119.81M, offering steady but limited capital for shareholder returns and expansion.
FCF Per Share
Each share generates $0.73 in free cash annually.
FCF Yield
DRVN converts 5.49% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
15.10
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
0.06
vs 25 benchmark
P/B Ratio
Price to book value ratio
2.76
vs 25 benchmark
P/S Ratio
Price to sales ratio
1.15
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
3.47
vs 25 benchmark
Current Ratio
Current assets to current liabilities
0.75
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.19
vs 25 benchmark
ROA
Return on assets percentage
0.03
vs 25 benchmark
ROCE
Return on capital employed
0.07
vs 25 benchmark
How DRVN Stacks Against Its Sector Peers
| Metric | DRVN Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 15.10 | 23.90 | Better (Cheaper) |
| ROE | 19.02% | 1176.00% | Weak |
| Net Margin | 7.53% | 2549.00% | Weak |
| Debt/Equity | 3.47 | 0.73 | Weak (High Leverage) |
| Current Ratio | 0.75 | 2.83 | Weak Liquidity |
| ROA | 3.37% | -8407.00% (disorted) | Weak |
DRVN outperforms its industry in 1 out of 6 key metrics, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Driven Brands Holdings Inc.'s 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
306.99%
Industry Style: Cyclical, Growth, Discretionary
High GrowthEPS CAGR
-4050.77%
Industry Style: Cyclical, Growth, Discretionary
DecliningFCF CAGR
509.41%
Industry Style: Cyclical, Growth, Discretionary
High Growth