William Blair & Company initiated research coverage of Driven Brands Holdings, Inc. (DRVN $31.77). Driven Brands is the largest auto services company in North America, featuring a diversified platform of well-known brands that meet a range of vehicle maintenance needs.
Analyst Sharon Zackfia estimates the company can generate revenue of $898.1 million in 2020, $1.26 billion in 2021, and $1.38 billion in 2022. She expects Driven’s unit growth to accelerate and reach roughly 6% by 2024, translating to more than 5,000 locations.
Zackfia said, “Driven Brands is unique in the public equity markets as a broadly diversified, asset-light franchisor in the auto services space. As a result, Driven has healthy EBITDA margins of 20%-plus alongside substantial cash flow generation, while driving significant value to its franchisees by leveraging its commercial relationships (insurance and fleet), data analytics, and purchasing power. Driven has also quickly become the de facto M&A option within the space, completing more than 40 acquisitions since early 2015. We believe Driven Brands is well positioned within the large and fragmented $300 billion-plus U.S. automotive care industry, with relatively open-ended growth prospects from a market share of only 1%. With a development pipeline that has grown during the pandemic, we expect Driven’s unit growth will accelerate, and ultimately, we view management’s goal of more than 12,000 units across its existing business segments as reasonable.”
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