European Wax Center, Inc.
$5.82
+0.0000%European Wax Center, Inc. operates as the franchisor and operator of out-of-home waxing services in the United States. The company offers body and facial waxing services; and pre- and post-service products, including ingrown hair serums, exfoliating gels, brow shapers, and skin treatments. As of March 26, 2022, it had a portfolio of centers operating in 874 locations across 44 states, including 868 franchised centers and six corporate-owned centers. European Wax Center, Inc. was founded in 2004 and is headquartered in Plano, Texas.
At a Glance
Live SnapshotIntrinsic Alpha Methodology
Thesis Lenses
Signal
High confidenceValuation multiple is mid-range (P/E 17.4).
Valuation inputs: P/E 17.4, earnings yield +5.7%, momentum 0.0%.
If multiples stay elevated while momentum fades, downside repricing risk rises.
Driver
High confidenceReturn profile is soft (ROE +10.8%, ROIC +4.5%).
Profitability stack: net margin +4.1%, ROE +10.8%, ROIC +4.5%.
Quality deterioration often appears in margins before it shows up in headline EPS.
Risk
High confidenceDownside profile is elevated and scenario stress-testing is essential.
Risk factors: liabilities/assets +85.5%, momentum 0.0%, net margin +4.1%.
Higher leverage with weak momentum and thin margins can amplify drawdown severity.
European Wax Center, Inc. Market vs Earnings Trajectory
Performance Analysis
EPS Growth
Slight earnings decline may be temporary. Monitor future quarters for trend reversal.
Price-EPS Relationship
Price is rising despite declining earnings—caution advised as valuation may be stretched.
Stock Price Change
Over the 1Y period, stock price has increased by 2.1%.
P/E Ratio (TTM)
Moderate P/E ratio suggests fair market valuation relative to earnings.
Key Insight
Despite declining earnings (-9.5%), the stock price has risen (+2.1%). This disconnect suggests investors may be optimistic about future turnaround, but earnings recovery is critical to sustain the valuation.
European Wax Center, Inc. Fair Value Envelope
European Wax Center, Inc. Profit Bridge
Profitability Analysis
Gross Margin
Exceptional pricing power and cost management. The company retains over half of revenue after direct costs.
Operating Margin
Healthy operating margins demonstrate effective cost control and strong business fundamentals.
Net Profit Margin
Minimal profitability after all expenses. Limited financial flexibility for reinvestment or shareholder returns.
Effective Tax Rate
Higher tax burden may reflect limited tax optimization or operations in high-tax jurisdictions.
Profitability Insight
Interest or tax burden: Strong operational performance but thin net margins indicate high interest expenses or unfavorable tax position eating into profits.
European Wax Center, Inc. Cash Conversion Engine
Cash Flow Quality Analysis
FCF Conversion Rate
Excellent cash generation. The company converts earnings to cash at or above 100%, indicating high-quality earnings.
CapEx Intensity
Asset-light business model. Low capital requirements leave more cash available for shareholders and growth investments.
FCF Growth Trend
Declining FCF warrants attention. Investigate whether due to temporary factors or fundamental deterioration.
Working Capital Impact
Working capital inflow boosted cash flow. Efficient management of receivables, inventory, and payables contributing positively.
Cash Flow Quality Insight
Asset-light with strong cash conversion: Low capital requirements combined with efficient cash generation creates significant shareholder value through dividends, buybacks, or strategic investments.
European Wax Center, Inc. Funding & Solvency Profile
Financial Health Analysis
Current Ratio
Excellent liquidity position. The company can easily cover its short-term obligations with substantial cushion.
Debt-to-Equity Ratio
High financial leverage. Heavy reliance on debt may indicate increased financial risk and potential solvency concerns.
Working Capital
Strong working capital position provides significant operational flexibility and financial cushion.
Asset Composition
Capital-intensive business with significant long-term investments in property, equipment, or intangibles.
Financial Health Insight
Mixed signals: Strong short-term liquidity provides comfort, but high overall leverage requires careful monitoring of debt servicing capabilities and refinancing risk.
European Wax Center, Inc. Street Expectations Map
Wall Street analysts project that EWCZ stock may see slight declines over the coming 12 months. The consensus 1-year price target stands at 5.80, with estimates ranging from a low of 5.80 to a high of 5.80.
The consensus 1-year price target stands at 5.80, with estimates ranging from a low of 5.80 to a high of 5.80.
Analyst Consensus Analysis
Upside Potential
Fair value territory. Stock trading near consensus target suggests limited near-term catalysts. Focus on fundamental developments.
Analyst Agreement
High analyst agreement. Narrow target range indicates strong consensus on valuation, suggesting clear investment thesis and predictable outlook.
Risk-Reward Profile
Balanced risk-reward. Upside and downside potential relatively symmetric. Suitable for moderate risk tolerance with conviction in thesis.
Analyst Conviction
Neutral sentiment. Fair value pricing with moderate agreement suggests wait-and-see approach or catalyst-driven opportunity.
Market Sentiment Insight
Efficient pricing: Stock trading at fair value with strong consensus suggests market has priced in expectations. Look for fundamental inflection points or new catalysts to drive meaningful moves.
European Wax Center, Inc. Insider Positioning
During the last 12 months, insiders have sold $953K worth of EWCZ shares, with no buying activity reported.
3 Months
0
0.00
51.8K
952.92K
-953K
-$953K
3-6 Months
0
0.00
0
0.00
+0
+$0
6-9 Months
0
0.00
0
0.00
+0
+$0
9-12 Months
0
0.00
0
0.00
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Top Buyers
No buying activity
Top Sellers
Larkin Joel
Officer: See Remarks
$953K
Insider Activity Analysis
Net Insider Sentiment
Strong bearish signal with $953K net selling. Heavy insider selling may indicate concerns about valuation or near-term prospects.
Buy/Sell Ratio
Very poor ratio. Heavy selling with minimal buying suggests insiders may be concerned about valuation or outlook.
Recent Trend (3 Months)
Heavy recent selling activity. Recent insider sales notably exceed purchases—may warrant investigation into company developments.
Insider Participation
1 insider sellers vs. 0 buyers. Widespread selling across multiple insiders may signal concerns.
Insider Activity Insight
Persistent selling pressure: Consistent insider selling with weak buy/sell ratio suggests insiders may be capitalizing on current valuation. Exercise caution and review recent earnings quality and management commentary.
ewcz Dividend History
Learning Layer
Related Guides
Build conviction on EWCZ by pairing this stock hub with focused valuation guides.
Research Paths
Snapshot
Start with context, operating signals, and key market metrics.
Value Model
Stress test fair value across bear, base, and bull assumptions.
Statements
Validate revenue quality, margins, and balance sheet durability.
Earnings Call
Read management commentary and compare it with reported outcomes.
Dividends
Check payout sustainability and long-term distribution behavior.
Analyst Expectations
Review consensus spread and where estimate risk is concentrated.