5 Most Promising Car Stocks According to Analysts

2. Driven Brands Holdings Inc. (NASDAQ:DRVN)

Average Analyst Price Target Upside: 47.33%

Average Analyst Price Target: $20.70

Driven Brands Holdings Inc. (NASDAQ:DRVN) is a North Carolina-based company that provides diversified automotive services, including vehicle repair, oil change, paint, collision and cosmetic solutions, and more.

On December 13, Driven Brands Holdings Inc. (NASDAQ:DRVN) reported the launch of its new B2B digital marketplace called Driven Advantage. Through the marketplace, more than 5,000 of the company’s automotive corporate locations, shop owners, franchises, and affiliates will be connected to over 80,000 third-party handpicked products.

According to Insider Monkey’s database, the hedge fund sentiment was positive toward Driven Brands Holdings Inc. (NASDAQ:DRVN) in Q3. The number of hedge funds with investments in the stock was 24 in the third quarter, up from 20 in the previous quarter. Israel Englander’s Millennium Management increased its stake by 140% to 6.775 million shares worth $85.3 million, making it the top investor in the company stock.

Baron Funds mentioned Driven Brands Holdings Inc. (NASDAQ:DRVN) in its third-quarter 2023 investor letter. Here is what it said:

“Driven Brands Holdings Inc. (NASDAQ:DRVN) is the largest automotive services company in North America, providing a range of need-based services to consumer and commercial customers through 4,800-plus locations. The company operates many well-known and trusted brands that provide customers with a full suite of automotive services across paint, collision, glass, vehicle repair, oil change (Take 5), maintenance, and car wash. The stock declined significantly during the quarter after the company reduced its revenue and profitability expectations for the balance of the year, driven by weakness in its car wash business and integration delays in the company’s recent foray into the glass repair segment. The company is now in the process of reviewing each of its car wash locations to determine how they fit in the portfolio and have paused future development as the company implements processes to improve operations and use FCF to de-lever the balance sheet. In glass, while Driven remains encouraged by the long-term potential to consolidate the glass industry, they are a few quarters behind where they anticipated due to integration delays of the recent businesses they’ve acquired. Despite these challenges, we think the stock has overreacted to the downside, and are currently evaluating management’s long-term assumptions calling for EBITDA to more than double over the next three years.”