EUROPEAN WAX CENTER INC-A (EWCZ) Stock Fundamental Analysis
NASDAQ:EWCZ - Nasdaq - US29882P1066 - Common Stock - Currency: USD
Overall EWCZ gets a fundamental rating of 5 out of 10. We evaluated EWCZ against 71 industry peers in the Diversified Consumer Services industry. EWCZ has an excellent profitability rating, but there are some minor concerns on its financial health. EWCZ may be a bit undervalued, certainly considering the very reasonable score on growth With these ratings, EWCZ could be worth investigating further for value investing!.
1. Profitability
1.1 Basic Checks
EWCZ had positive earnings in the past year.
EWCZ had a positive operating cash flow in the past year.
In multiple years EWCZ reported negative net income over the last 5 years.
EWCZ had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
With a Return On Assets value of 1.71%, EWCZ perfoms like the industry average, outperforming 52.11% of the companies in the same industry.
Looking at the Return On Equity, with a value of 17.31%, EWCZ belongs to the top of the industry, outperforming 84.51% of the companies in the same industry.
Looking at the Return On Invested Capital, with a value of 6.57%, EWCZ is in the better half of the industry, outperforming 74.65% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for EWCZ is significantly below the industry average of 10.20%.
The 3 year average ROIC (4.95%) for EWCZ is below the current ROIC(6.57%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.71% | ||
| ROE | 17.31% | ||
| ROIC | 6.57% |
ROA(3y)1.23%
ROA(5y)-0.08%
ROE(3y)12.06%
ROE(5y)5.51%
ROIC(3y)4.95%
ROIC(5y)N/A
1.3 Margins
EWCZ has a Profit Margin of 4.55%. This is in the better half of the industry: EWCZ outperforms 61.97% of its industry peers.
Looking at the Operating Margin, with a value of 21.71%, EWCZ belongs to the top of the industry, outperforming 88.73% of the companies in the same industry.
In the last couple of years the Operating Margin of EWCZ has grown nicely.
Looking at the Gross Margin, with a value of 73.69%, EWCZ belongs to the top of the industry, outperforming 91.55% of the companies in the same industry.
In the last couple of years the Gross Margin of EWCZ has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 21.71% | ||
| PM (TTM) | 4.55% | ||
| GM | 73.69% |
OM growth 3Y16.57%
OM growth 5Y19.69%
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y-0.08%
GM growth 5Y0.03%
2. Health
2.1 Basic Checks
EWCZ has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
The number of shares outstanding for EWCZ has been reduced compared to 1 year ago.
EWCZ has less shares outstanding than it did 5 years ago.
The debt/assets ratio for EWCZ is higher compared to a year ago.
2.2 Solvency
Based on the Altman-Z score of 0.77, we must say that EWCZ is in the distress zone and has some risk of bankruptcy.
With a Altman-Z score value of 0.77, EWCZ perfoms like the industry average, outperforming 43.66% of the companies in the same industry.
The Debt to FCF ratio of EWCZ is 6.59, which is on the high side as it means it would take EWCZ, 6.59 years of fcf income to pay off all of its debts.
EWCZ has a Debt to FCF ratio of 6.59. This is in the better half of the industry: EWCZ outperforms 67.61% of its industry peers.
EWCZ has a Debt/Equity ratio of 5.30. This is a high value indicating a heavy dependency on external financing.
Looking at the Debt to Equity ratio, with a value of 5.30, EWCZ is doing worse than 81.69% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 5.3 | ||
| Debt/FCF | 6.59 | ||
| Altman-Z | 0.77 |
ROIC/WACC0.83
WACC7.96%
2.3 Liquidity
EWCZ has a Current Ratio of 2.71. This indicates that EWCZ is financially healthy and has no problem in meeting its short term obligations.
The Current ratio of EWCZ (2.71) is better than 80.28% of its industry peers.
EWCZ has a Quick Ratio of 2.18. This indicates that EWCZ is financially healthy and has no problem in meeting its short term obligations.
EWCZ has a better Quick ratio (2.18) than 77.46% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.71 | ||
| Quick Ratio | 2.18 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 50.00% over the past year.
Looking at the last year, EWCZ shows a very strong growth in Revenue. The Revenue has grown by 20.33%.
EWCZ shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 7.06% yearly.
EPS 1Y (TTM)50%
EPS 3YN/A
EPS 5YN/A
EPS Q2Q%144.44%
Revenue 1Y (TTM)20.33%
Revenue growth 3Y6.67%
Revenue growth 5Y7.06%
Sales Q2Q%-0.86%
3.2 Future
EWCZ is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 4.93% yearly.
EWCZ is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 1.92% yearly.
EPS Next Y-3.13%
EPS Next 2Y2.12%
EPS Next 3Y4.93%
EPS Next 5YN/A
Revenue Next Year-3.11%
Revenue Next 2Y-0.51%
Revenue Next 3Y1.92%
Revenue Next 5YN/A
3.3 Evolution
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 6.68, the valuation of EWCZ can be described as very cheap.
EWCZ's Price/Earnings ratio is rather cheap when compared to the industry. EWCZ is cheaper than 92.96% of the companies in the same industry.
When comparing the Price/Earnings ratio of EWCZ to the average of the S&P500 Index (26.73), we can say EWCZ is valued rather cheaply.
With a Price/Forward Earnings ratio of 7.98, the valuation of EWCZ can be described as very cheap.
Based on the Price/Forward Earnings ratio, EWCZ is valued cheaper than 97.18% of the companies in the same industry.
When comparing the Price/Forward Earnings ratio of EWCZ to the average of the S&P500 Index (34.61), we can say EWCZ is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 6.68 | ||
| Fwd PE | 7.98 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, EWCZ is valued cheaper than 80.28% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, EWCZ is valued cheaper than 97.18% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 4.25 | ||
| EV/EBITDA | 7.02 |
4.3 Compensation for Growth
EWCZ has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y2.12%
EPS Next 3Y4.93%
5. Dividend
5.1 Amount
EWCZ does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
4.41
+0.21 (+5%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Services
GICS IndustryDiversified Consumer Services
Earnings (Last)
Earnings (Next)
Inst Owners62.53%
Inst Owner Change0.57%
Ins Owners3.2%
Ins Owner Change26.93%
Market Cap243.48M
Analysts75.71
Price Target6.85 (55.33%)
Short Float %8.63%
Short Ratio4.05
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
Yearly Dividend0.01
Dividend Growth(5Y)N/A
DP0.92%
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)255.48%
Min EPS beat(2)189.86%
Max EPS beat(2)321.1%
EPS beat(4)4
Avg EPS beat(4)171.32%
Min EPS beat(4)78.25%
Max EPS beat(4)321.1%
EPS beat(8)8
Avg EPS beat(8)104.9%
EPS beat(12)12
Avg EPS beat(12)213.62%
EPS beat(16)16
Avg EPS beat(16)235.5%
Revenue beat(2)1
Avg Revenue beat(2)-2.54%
Min Revenue beat(2)-6.52%
Max Revenue beat(2)1.45%
Revenue beat(4)2
Avg Revenue beat(4)-2.26%
Min Revenue beat(4)-6.52%
Max Revenue beat(4)1.45%
Revenue beat(8)3
Avg Revenue beat(8)-2.17%
Revenue beat(12)5
Avg Revenue beat(12)-1.75%
Revenue beat(16)7
Avg Revenue beat(16)-1.47%
PT rev (1m)0%
PT rev (3m)8.51%
EPS NQ rev (1m)14.84%
EPS NQ rev (3m)51.05%
EPS NY rev (1m)0%
EPS NY rev (3m)70.91%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-1.29%
Revenue NY rev (1m)0%
Revenue NY rev (3m)0.33%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 6.68 | ||
| Fwd PE | 7.98 | ||
| P/S | 0.91 | ||
| P/FCF | 4.25 | ||
| P/OCF | 4.16 | ||
| P/B | 3.46 | ||
| P/tB | N/A | ||
| EV/EBITDA | 7.02 |
EPS(TTM)0.66
EY14.97%
EPS(NY)0.55
Fwd EY12.53%
FCF(TTM)1.04
FCFY23.55%
OCF(TTM)1.06
OCFY24.02%
SpS4.86
BVpS1.28
TBVpS-7.17
PEG (NY)N/A
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.71% | ||
| ROE | 17.31% | ||
| ROCE | 8.58% | ||
| ROIC | 6.57% | ||
| ROICexc | 7.19% | ||
| ROICexgc | 28.99% | ||
| OM | 21.71% | ||
| PM (TTM) | 4.55% | ||
| GM | 73.69% | ||
| FCFM | 21.37% |
ROA(3y)1.23%
ROA(5y)-0.08%
ROE(3y)12.06%
ROE(5y)5.51%
ROIC(3y)4.95%
ROIC(5y)N/A
ROICexc(3y)5.33%
ROICexc(5y)N/A
ROICexgc(3y)23.62%
ROICexgc(5y)N/A
ROCE(3y)6.46%
ROCE(5y)N/A
ROICexcg growth 3Y-54.19%
ROICexcg growth 5Y-26.67%
ROICexc growth 3Y18.53%
ROICexc growth 5Y24.42%
OM growth 3Y16.57%
OM growth 5Y19.69%
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y-0.08%
GM growth 5Y0.03%
F-Score6
Asset Turnover0.38
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 5.3 | ||
| Debt/FCF | 6.59 | ||
| Debt/EBITDA | 4.76 | ||
| Cap/Depr | 5.68% | ||
| Cap/Sales | 0.43% | ||
| Interest Coverage | 2.67 | ||
| Cash Conversion | 74.49% | ||
| Profit Quality | 470.1% | ||
| Current Ratio | 2.71 | ||
| Quick Ratio | 2.18 | ||
| Altman-Z | 0.77 |
F-Score6
WACC7.96%
ROIC/WACC0.83
Cap/Depr(3y)2.57%
Cap/Depr(5y)47.24%
Cap/Sales(3y)0.24%
Cap/Sales(5y)8.19%
Profit Quality(3y)589.72%
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)50%
EPS 3YN/A
EPS 5YN/A
EPS Q2Q%144.44%
EPS Next Y-3.13%
EPS Next 2Y2.12%
EPS Next 3Y4.93%
EPS Next 5YN/A
Revenue 1Y (TTM)20.33%
Revenue growth 3Y6.67%
Revenue growth 5Y7.06%
Sales Q2Q%-0.86%
Revenue Next Year-3.11%
Revenue Next 2Y-0.51%
Revenue Next 3Y1.92%
Revenue Next 5YN/A
EBIT growth 1Y14.76%
EBIT growth 3Y24.34%
EBIT growth 5Y28.14%
EBIT Next Year42.68%
EBIT Next 3Y18.14%
EBIT Next 5YN/A
FCF growth 1Y34.09%
FCF growth 3Y19.09%
FCF growth 5YN/A
OCF growth 1Y35.8%
OCF growth 3Y10.97%
OCF growth 5Y30.9%