tirc83/E+ via Getty Images Investment Thesis Mister Car Wash (NYSE:MCW) is the largest publicly traded machine car wash operator in the U.S. Since the early 2000s, the firm has grown rapidly to become a nationwide chain of wash centres. Since their IPO, profitability has failed to match lofty valuations. However, solid fiscal improvements in 2023 have coincided with a much fairer share price which, given a base-case outlook for 2024, may suggest a 15% undervaluation in shares. Nevertheless, significant ...

Company Operations - As of December 31, 2023, Mister Car Wash operates 476 locations across 21 states, with 406 Express Exterior Locations and 70 Interior Cleaning Locations[22][44]. - During 2023, Mister Car Wash successfully opened 35 greenfield locations and plans to continue this growth strategy in existing and adjacent markets[29]. - The company has integrated over 100 acquisitions throughout its history, employing a disciplined approach to select and upgrade new locations[30]. - Mister Car Wash's workforce increased by 4% in 2023, reaching approximately 6,600 team members, primarily due to the addition of new locations[44]. - The company operates in a fragmented industry, competing with various operators, but believes its scale and operational consistency provide a competitive advantage[33]. Financial Performance - Net revenues increased by 6% to $927.1 million in 2023 from $876.5 million in 2022, primarily due to growth in car wash sales and the addition of 40 net locations[168]. - Net income for 2023 was $80.13 million, with a net income margin of 8.6%, down from a net income of $112.9 million and a margin of 12.9% in 2022[152][156]. - Adjusted EBITDA for 2023 was $285.92 million, with an adjusted EBITDA margin of 30.8%, compared to $281.65 million and a margin of 32.1% in 2022[152][159]. - Total costs and expenses increased to $748.9 million in 2023, representing 81% of net revenues, compared to 79% in 2022[167]. - Interest expense rose significantly to $75.1 million in 2023, up from $41.9 million in 2022, primarily due to higher average interest rates[173]. Unlimited Wash Club (UWC) - In 2023, the company increased its Unlimited Wash Club (UWC) penetration from 68% to 71% of total wash sales, with UWC Members spending over four times more than retail customers[28][55]. - Mister Car Wash's UWC subscription program accounted for 71% of total wash sales in 2023, highlighting its importance for revenue growth[55]. - The number of Unlimited Wash Club (UWC) Members grew to approximately 2.1 million in 2023, up by about 10.2% from 1.9 million in 2022[157]. - UWC sales accounted for 71% of total wash sales in 2023, an increase from 68% in 2022, reflecting the growing penetration of the subscription model[158]. Challenges and Risks - The company faces challenges in hiring and retaining qualified personnel, which may lead to increased labor costs and negatively affect customer service[72]. - The company is subject to various risks related to credit card and debit card payments, including potential increases in processing fees that could impact operating results[67]. - The company relies on a limited number of suppliers for car wash equipment, which poses risks of supply chain disruptions and increased costs[71]. - Changes in applicable tax laws could adversely affect the company's financial condition and effective tax rate[78]. - The company may face difficulties in negotiating lease renewals on commercially acceptable terms, potentially leading to location closures[75]. Cash Flow and Liquidity - For the year ended December 31, 2023, the net cash provided by operating activities was $204.7 million[83]. - As of December 31, 2023, the company had $19.0 million in cash and cash equivalents for working capital purposes[83]. - Cash and cash equivalents decreased to $19.0 million as of December 31, 2023, from $65.2 million in 2022, indicating a need for improved liquidity management[175]. - Net cash provided by operating activities was $204.7 million in 2023, down from $229.2 million in 2022, with changes in working capital negatively impacting cash flow[178]. Corporate Governance - Leonard Green & Partners, L.P. holds more than 50% of the voting power, classifying the company as a "controlled company" under NYSE rules[109]. - The board of directors is responsible for overall risk oversight, supported by the Audit Committee which reviews cybersecurity policies[123]. - The company has established advance notice requirements for board nominations and actions, which could limit stockholder influence[119]. - The company has provisions in its charter that may discourage or delay potential acquisitions, impacting stockholder interests[116]. Environmental and Regulatory Factors - The company has ceased dispensing gasoline and diesel fuels at all locations as of December 31, 2023, but faces ongoing environmental risks from historical operations[94]. - The company is subject to evolving global climate change regulations that may adversely affect operations and financial performance[95]. - Governmental restrictions on water use may result in decreased access to water supplies, impacting financial condition and results of operations[99]. - The company faces significant costs in complying with various federal, state, and local laws and regulations, which may materially increase operational costs[88]. Stock Performance and Dividends - The company's stock performance since its IPO in June 2021 shows a decline, with the stock value at $43.00 as of December 31, 2023, down from $100.00 at the IPO[140]. - The company does not intend to pay dividends for the foreseeable future, focusing on retaining earnings for business operations and expansion[119]. - Approximately 71% of the outstanding common stock has rights to require the company to file registration statements for public sales, which could adversely affect stock price[115].

Mister Car Wash, Inc. (NYSE:MCW) Q4 2023 Earnings Conference Call February 21, 2024 4:30 PM ET Company Participants John Lai - Chairperson and Chief Executive Officer Jedidiah Gold - Chief Financial Officer Conference Call Participants Peter Keith - Piper Sandler Justin Kleber - Baird John Heinbockel - Guggenheim Jason Haas - Bank of America Phillip Blee - William Blair Michael Lasser - UBS Tristan Thomas-Martin - BMO Capital Markets Christian Carlino - JPMorgan Simeon Gutman - Morgan Stanley Operator Good ...

Mister Car Wash Announces Fourth Quarter and Fiscal Year 2023 Financial Results Net revenues increased 7.4% during the quarter Comparable-store sales increased 0.7% during the quarter Unlimited Wash Club memberships increased 10.3% Opened a record 35 new greenfield locations in 2023 Provides Fiscal 2024 Initial Outlook Tucson, Ariz., February 21, 2024 – Mister Car Wash, Inc. (the "Company") (NYSE: MCW), the nation's largest car wash brand, today announced its financial results for the quarter and fiscal yea ...

Mister Car Wash, Inc. (NYSE:MCW) Q3 2023 Earnings Conference Call November 2, 2023 4:30 PM ET Company Participants John Lai - Chairperson, Chief Executive Officer Jed Gold - Chief Financial Officer Conference Call Participants Michael Kessler - Morgan Stanley Justin Kleber - Baird John Heinbockel - Guggenheim Michael Lasser - UBS Randy Konik - Jefferies Chris O'Cull - Stifel Tristan Thomas-Martin - BMO Capital Markets Operator Good afternoon, and welcome to Mister Car Wash's Conference Call to Discuss Finan ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Tucson, Arizona 85705 (Address of principal executive offices) (Zip Code) Delaware 47-1393909 (I.R.S. Employer Identification No.) For the quarterly period ended September 30, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2023 OR For the transition period from to ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number: 001-40542 Mister Car Wash, Inc. (Exact name of registrant as specified in its charter) (State or other jurisdiction of incorporation o ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-Q OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-40542 Mister Car Wash, Inc. (Exact name of registrant as specified in its charter) (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2023 Indicate by check mark whether the registrant ...

Mister Car Wash, Inc. (NYSE:MCW) Q1 2023 Earnings Conference Call May 2, 2023 4:30 PM ET Company Participants John Lai - Chairperson & Chief Executive Officer Jed Gold - Chief Financial Officer Conference Call Participants Michael Lasser - UBS Kate McShane - Goldman Sachs Peter Keith - Piper Sandler Randy Konik - Jefferies Simeon Gutman - Morgan Stanley David Bellinger - ROTH Justin Kleber - Baird Chris O'Cull - Stifel Liz Suzuki - Bank of America Garrett Klingshirn - BMO Capital Markets Operator Good afte ...

Mister Car Wash, Inc. (NYSE:MCW) Q4 2022 Earnings Conference Call February 23, 2023 4:30 PM ET Company Participants John Lai - Chairperson and Chief Executive Officer Jed Gold - Chief Financial Officer Conference Call Participants Elizabeth Suzuki - Bank of America Simeon Gutman - Morgan Stanley Michael Lasser - UBS Peter Keith - Piper Sandler Garrett Klingshirn - BMO Capital Markets Kate McShane - Goldman Sachs David Bellinger - ROTH MKM Chris O???Cull - Stifel Operator Good afternoon and welcome to Mister ...