Mister Car Wash Inc.

Mister Car Wash, Inc. (NYSE: MCW) operates a network of more than 440 facilities, making it the largest car wash subscription program provider in North America. The company has a dedicated team of experts, cutting-edge technology, and it places a high priority on responsible environmental practices and resource management.

Recent Financial and Business Updates:

• Second Quarter Income Statement Review:
  • Total revenues rose by 5.2% to reach USD236.9 million, up from USD225.2 million in the second quarter of 2022.
  • Sales at comparable stores increased by 0.3%, as opposed to a 2.4% increase during the same period in 2022.
  • During the second quarter, the company gained 59,000 net new UWC (Unlimited Wash Club) Members.
  • In the second quarter of 2023, the company launched nine new car wash locations and acquired one, bringing the total number of car wash locations to 449 as of June 30, 2023.
  • Net income amounted to USD27.1 million, with net income per diluted share at USD0.08.
  • Adjusted net income stood at USD29.0 million, with diluted adjusted net income per share at USD0.09.
  • Adjusted EBITDA decreased by less than 1% to USD73.9 million from USD74.5 million in the second quarter of 2022.
• Six-month period ended June 30, 2023, Income Statement Review:
  • Total revenues saw a 4.1% increase, reaching USD462.9 million.
  • Sales at comparable stores declined by 0.6%, in contrast to the 6.5% growth seen in the same period of the previous year.
  • The company gained around 181,000 new UWC (Unlimited Wash Club) Members.
  • Net income amounted to USD48.3 million, with net income per diluted share at USD0.15.
  • Adjusted net income stood at USD55.7 million, with diluted adjusted net income per share at USD0.17.
  • Adjusted EBITDA decreased by 3.0% to USD144.8 million from USD149.3 million in the comparable period of the previous year.
• Balance Sheet Review:
  • On June 30, 2023, the company had USD136.2 million in cash and cash equivalents, and there were no outstanding borrowings under the Company's Revolving Commitment.
  • Additionally, net cash generated from operating activities amounted to USD117.1 million for the initial six months of 2023, as opposed to USD134.6 million for the same period in 2022.

Technical Observation (on the daily chart)

Presently, the stock has corrected by approximately 42.73% since reaching its highest point in the past 52 weeks, which occurred on November 11, 2022. The Relative Strength Index (RSI) over a 14-day period stands at 30.611, correcting again into the oversold zone, with expectations of some further correction or a consolidation in the short-term period. Lastly, the current price is below both the 21-period SMA as well as 50-period SMA, indicating a downward trend and these SMAs will act as a resistance in case of upward movement.

As per the above-mentioned price action, recent key business and financial updates, momentum in the stock over the last month, and technical indicators analysis, a ‘WATCH’ recommendation is given on Mister Car Wash Inc. (NYSE: MCW) at the current market price of USD 6.38 as of September 12, 2023, at 06:48 am PDT. 

Individuals can evaluate the stock based on the support and resistance levels provided in the report in case of keen interest taking into consideration the risk-reward scenario.

Markets are trading in a highly volatile zone currently due to certain macro-economic issues and prevailing geopolitical tensions. Therefore, it is prudent to follow a cautious approach while investing. 

Related Risk: This report may be looked at from a high-risk perspective and a recommendation is provided for a short duration. This report is solely based on technical parameters, and the fundamental performance of the stocks has not been considered in the decision-making process. Other factors which could impact the stock prices include market risks, regulatory risks, interest rates risks, currency risks, social and political instability risks etc. 

How to Read the Charts?

The yellow colour line reflects the 21-period simple moving average (SMA) while the blue line indicates the 50- period simple moving average (SMA). SMA helps to identify existing price trends. If the prices are trading above the 21-period and 50-period moving average, then it shows prices are currently trading in a bullish trend.

The orange colour line in the chart’s lower segment reflects the Relative Strength Index (14-Period) which indicates price momentum and signals momentum in trend. A reading of 70 or above suggests overbought status while a reading of 30 or below suggests an oversold status.

The red and green colour bars in the chart’s lower segment show the volume of the stock. The volume is the number of shares that changed hands during a given day. Stocks with high volumes are more liquid than stocks with lesser volume as liquidity in stocks helps with easier and faster execution of the order.

The Orange colour lines are the trend lines drawn by connecting two or more price points and used for trend identification purposes. The trend line also acts as a line of support and resistance.

Technical Indicators Defined: -

Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock. 

Resistance: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Resistance 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Resistance 2 may act as the crucial resistance level for the stock. 

Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices. 

The reference date for all price data, currency, technical indicators, support, and resistance levels is September 12, 2023. The reference data in this report has been partly sourced from REFINITIV. 

Abbreviations

CMP: Current Market Price

SMA: Simple Moving Average

RSI: Relative Strength Index

USD: United States dollar

Note: Trading decisions require a thorough analysis by individual. Technical reports in general chart out metrics that may be assessed by individuals before any stock evaluation. The above are illustrative analytical factors used for evaluating the stocks; other parameters can be looked at along with additional risks per se. Past performance is neither an indicator nor a guarantee of future performance.

Disclaimer

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