Fact based stock research
European Wax Center (NasdaqGS:EWCZ)

US29882P1066

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For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".

Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".

Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.

Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.

(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).

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European Wax Center stock research in summary

waxcenter.com

ANALYSIS: With an Obermatt Combined Rank of 37 (worse than 63% compared with investment alternatives), European Wax Center (Specialized Consumer Services, USA) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of European Wax Center are low in value (priced high) with a consolidated Value Rank of 49 (worse than 51% of alternatives) and show below-average growth (Growth Rank of 25) but are safely financed (Safety Rank of 64), which means low debt burdens. ...read more

RECOMMENDATION: A Combined Rank of 37, is a hold recommendation based on European Wax Center's financial characteristics. As the company European Wax Center's critical financial metrics exhibit below-average performance, such as low value (Obermatt Value Rank of 49) and low growth (Obermatt Growth Rank of 25), it is a somewhat questionable stock investment, where the risk of paying too much for the shares is significant, unless the company has an exceptionally bright future. In this case, good financing practices (Obermatt Safety Rank of 64) are a positive sign, because it may allow the company to weather challenging times until the hoped-for cash flows materialize. This may be true for high-tech or biotechnology companies with enough cash to sustain prolonged business development. If they own properties that only provide cash flows in the future, the stock may look excessively expensive and unattractive today. In such cases, the Obermatt Method has limited value, as it is based on facts we can observe today. If the facts lie all in the future, stock investing becomes guesswork, and this should only be a driver in a limited number of investments that account for a small fraction of a safe portfolio. Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more

Latest Obermatt Ranks


360° View^new
Sentiment Rank^new
Value Rank	49
Growth Rank	25
Safety Rank	64
Combined Rank	37

Country	USA
Industry	Specialized Consumer Services
Index	NASDAQ
Size class	Small

14-Nov-2024. Stock data may be delayed. Log in or sign up to get the most recent research.

Further information

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Review the performance ranks of the individual metrics that form each investment strategy.

Research History: European Wax Center

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	n/a	13	8	49
GROWTH
GROWTH	n/a	31	47	25
SAFETY
SAFETY	n/a	60	45	64
SENTIMENT
SENTIMENT	n/a	94	57	^new
360° VIEW
360° VIEW	n/a	41	22	^new

Most recent update of the stock research: 14-Nov-2024. Financial reporting date used for calculating ranks: 6-Jul-2024. Stock research history is based on the Obermatt Method. The higher the rank, the better European Wax Center is in the corresponding investment strategy.
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Combined financial peformance in Detail

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	n/a	13	8	49
GROWTH
GROWTH	n/a	31	47	25
SAFETY
SAFETY	n/a	60	45	64
COMBINED
COMBINED	n/a	26	6	37

Last update of combined financial performance: 14-Nov-2024. Stock analysis on combined financial performance: The higher the rank of European Wax Center the better the performance.

Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 49 (worse than 51% compared with alternatives), European Wax Center shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators, with three out of four indicators below average for European Wax Center. Only the metric dividend yield has an above-average rank, reflecting that dividend practices are expected to be higher than 64% of comparable companies, making the stock an attractive buy for dividend investors. However, dividend investors may get disappointed because all other critical financial indicators are below the market median: Price-to-Sales is 31 which means that the stock price compared with what market professionals expect for future profits is higher than 69% of comparable companies, indicating a low value concerning European Wax Center's sales levels. The same is valid for Price-to-Profit (also referred to as price-earnings, P/E) with a rank of 41 which means that the stock price compared with what market professionals expect for future profit levels is higher than 59% of comparable companies. In addition, Price-to-Book (also referred to as market-to-book ratio) with a Price-to-Book Rank of 45 is also low. Compared with invested capital, the stock price is higher than for 55% of comparable investments. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 49, is a hold recommendation based on European Wax Center's stock price compared with the company's operational size and dividend yields. Should dividend investors pick European Wax Center? The company-reported financials speak against it. The company is expensive compared with revenue and invested capital levels, two reliable company size indicators. In addition, it currently has a low level of profits. How can future dividends be paid in the case that profits remain low? Dividend investors should choose European Wax Center only if they reasonably expect the low current profit levels to be transitory. We recommend further analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks, including the 360° View, before making an investment decision, which is essential in this case, as the financial indicators are inconclusive. ...read more

VALUE METRICS	2021	2022	2023	2024
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	n/a	7	13	31
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	n/a	25	25	41
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	n/a	58	28	45
DIVIDEND YIELD
DIVIDEND YIELD	n/a	1	1	64
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	n/a	13	8	49

Last update of Value Rank: 14-Nov-2024. Stock analysis on value ratios: The higher the rank, the lower the value ratio of European Wax Center; except for dividend yield where the rank is higher, the higher the yield.

Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 25 (better than 25% compared with alternatives), European Wax Center shows a below-average growth dynamic in its industry. There is limited momentum in this company. The Growth Rank is based on consolidating four value indicators, with all four metrics below average for European Wax Center. Sales Growth has a rank of 41, which means that currently professionals expect the company to grow less than 59% of its competitors. The same is valid for Profit Growth, with a rank of 34, and Capital Growth with 49. In addition, Stock Returns have a below market rank of 11, which means that the stock returns have recently been below 89% of alternative investments. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 25, is a hold recommendation for growth and momentum investors. These are all bad growth momentum indicators. These are negative signals for investors interested in growth companies. Value is likely good for this company, as investors may have left this stock in the cold. If that is the case, investors should look at the company's outlook, especially Sentiment performance, because it may be a turnaround situation that could entail above-average stock returns in the future. But it remains a risky bet, as no growth signals are in the green zone yet. While momentum is a popular investment factor, the value aspect might be the more important one, in the longer term. We recommend analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks to arrive at a 360° View of the stock purchase case, especially since the growth performance is low here. ...read more

GROWTH METRICS	2021	2022	2023	2024
REVENUE GROWTH
REVENUE GROWTH	n/a	47	57	41
PROFIT GROWTH
PROFIT GROWTH	n/a	56	8	34
CAPITAL GROWTH
CAPITAL GROWTH	n/a	29	95	49
STOCK RETURNS
STOCK RETURNS	n/a	61	39	11
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	n/a	31	47	25

Last update of Growth Rank: 14-Nov-2024. Stock analysis on growth metrics: The higher the rank, the higher the growth and returns of European Wax Center.

Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 64 (better than 64% compared with alternatives), the company European Wax Center has financing practices on the safer side, which mean that their overall debt burden is lower than average. This doesn't mean that the business of European Wax Center is safe, it only means that the company is on the safer side regarding possible bankruptcy, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with just one indicator above average for European Wax Center and the other two below average. Refinancing is at 88, meaning the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 88% of its competitors. But Leverage is high with a rank of 41, meaning the company has an above-average debt-to-equity ratio. It has more debt than 59% of its competitors. Liquidity is also on the riskier side with a rank of 40, meaning the company generates less profit to service its debt than 60% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 64 (better than 64% compared with alternatives), European Wax Center has a financing structure that is safer than that of its competitors. A good Refinancing Rank means that the problems of the company may not be around the corner. But high Leverage is only good if things go well, and low Liquidity is a signal for caution. The financing signals for European Wax Center are on the riskier side, requiring the company's future to be on the safer side. Investors may want to look at Growth and Sentiment ranks before making an investment decision. In the long-term, investors may have a debt challenge with European Wax Center and should also compare Obermatt’s Value, Growth, and Sentiment Ranks before making a decision. ...read more

SAFETY METRICS	2021	2022	2023	2024
LEVERAGE
LEVERAGE	n/a	66	42	41
REFINANCING
REFINANCING	n/a	47	78	88
LIQUIDITY
LIQUIDITY	n/a	54	32	40
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	n/a	60	45	64

Last update of Safety Rank: 14-Nov-2024. Stock analysis on safety metrics: The higher the rank, the lower the leverage of European Wax Center and the more cash is available to service its debt.

Sentiment Metrics in Detail

SENTIMENT	2021	2022	2023	2024
ANALYST OPINIONS
ANALYST OPINIONS	n/a	77	77	^new
OPINIONS CHANGE
OPINIONS CHANGE	n/a	75	50	^new
PRO HOLDINGS
PRO HOLDINGS	n/a	64	28	^new
MARKET PULSE
MARKET PULSE	n/a	66	58	^new
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	n/a	94	57	^new

Last update of Sentiment Rank: 14-Nov-2024. Stock analysis on sentiment metrics: The higher the rank, the more positive the sentiment for European Wax Center.
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