What Happened?
Shares of conveyorized car wash service company Mister Car Wash (NYSE:MCW) jumped 2.1% in the afternoon session after the stock's positive momentum continued as investment firm Stephens upgraded the stock to "Overweight" from "Equal Weight."
The analyst argued that industry headwinds and tough comparisons drove sentiment lower, which created a buying opportunity. Stephens saw the company's efforts to strategically manage pricing as driving “a positive dynamic between price/traffic.” Despite the rating upgrade, the firm lowered its price target on the shares to $6.25 from a previous $7.50. This suggested the improved rating was based on the stock's value after its price had fallen. The upgrade came ahead of the company's scheduled third-quarter 2025 earnings release.
After the initial pop the shares cooled down to $5.13, up 2% from previous close.
Is now the time to buy Mister Car Wash? Access our full analysis report here.
What Is The Market Telling Us
Mister Car Wash’s shares are somewhat volatile and have had 12 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 4 days ago when the stock dropped 2.5% on the news that Piper Sandler downgraded the company to Neutral from Overweight and lowered its price target to $6.00 from $8.00. The analyst pointed to slowing comparable sales trends and difficult upcoming quarterly comparisons that could result in negative sales growth over the next two quarters. The firm also highlighted a consistent decline in members per store, which had fallen for six straight quarters with no clear end in sight. Furthermore, the company faced challenges from a significant debt load, with its short-term obligations exceeding its liquid assets. This downgrade followed the company's recent second-quarter earnings report, which had missed analysts' expectations.
Mister Car Wash is down 29.5% since the beginning of the year, and at $5.13 per share, it is trading 39.6% below its 52-week high of $8.49 from February 2025. Investors who bought $1,000 worth of Mister Car Wash’s shares at the IPO in June 2021 would now be looking at an investment worth $252.46.
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