* Note: Prices are in Million (M) USD.
Description:
European Wax Center, Inc. is a leading franchised provider of out-of-home waxing services in the United States, headquartered in Plano, Texas. The company operates a robust franchise model, harnessing a strong brand presence and customer loyalty to drive growth in the highly competitive beauty and personal care sector. With a focus on exceptional customer experiences and high-quality services, European Wax Center continues to expand its footprint across various markets, positioning itself as a trusted destination for hair removal services.
These criteria used Company's Cash, EBITDA and Debt balance to determines its fair value:
Cash : $70 M
Debt : $380 M
EBITDA : $62 M
Net Debt (Debt - Cash): $310 M
Since EBITDA cannot cover net debt within 3 years, Avoid This Stock.
This criteria used industry in which company operates:
Sector: Consumer discretionary
Industry: Household & personal products
Based on industry, 3 points assigned.
This criteria used Company's Price To Earning (P/E) Ratio to determines its fair value:
Forward PE Ratio: 7.43
Since Forward PE Ratio is less than 15, 5 points assigned.
This criteria used Company's ability to convert Sales into free cash flow to determine fair value:
Using last 6 overlapping fiscal years (max 20).Average Free Cash Flow: $21 M
Average Revenue: $180 M
Revenue Converted To Free Cash Flow (%): 11.5%
Since Free Cash Flow (FCF) to Revenue percentage is less than 15, 1 point assigned.
This criteria used company's growth potential to calculate its fair value:
Latest Revenue (2024-12-31): $217 M
Revenue 5 Years Ago (2019-12-31): $154 M
Total Growth over 5 Years: 40.7%
5-Year Revenue CAGR (Historical): 7.1%
Forward 5-Year CAGR (Tapered): 6.4%
Since historical Revenue CAGR is between 5 - 10, 2 points assigned.
This criteria used Company's ability to buy back its own share:
Latest Share Count (2024-12-31): $47 M
Share Count 5 Years Ago (2020-12-31): $31 M
Company is not buying back its own shares, 0 points assigned.
This criteria used Company's dividend payout ratio to determine its fair value:
Next Year Earnings Per Share (EPS): $0.54
Trailing 12-Month Earnings Per Share (EPS): $0.53
Average Earnings Per Share (EPS): $0.53
Dividend Per Share (DPS): $0
Payout Ratio: 0%
Dividend Yield: 0%
Since Dividend Per Share is less than or equal to 0, 0 point assigned.
Since Dividend Yield is less than 1, 0 point assigned.
This criteria used Company's Return On Equity (ROE%) to determine its fair value:
Using last 4 valid ROE years (max 20).Average ROE: 10.1%
Since Average ROE is between 10 - 20, 3 points assigned.
This criteria used Company's current price to its 52 week low price to determines its fair value:
Current Price: $3.96
52-Week Low: $2.72
Threshold Price (15% Above 52-Week Low): $3.13
Since Current price is not within 15% threshold, 0 point assigned.
This criteria used Company's Market Cap to determines its fair value:
Market Capitalization: $209 M
Since Market Cap is less than 10B, 1 point assigned.
% Exposure to Total Portfolio
Based on the market cap, we recommend do not exceed 0.5% exposure of Total Portfolio.
Warren Buffett's Owners' Earnings:
Owners' Earnings (FCF/Share) (TTM ending 2025-06-30): $1.23
Owners' Earnings (FCF/Share, latest positive annual) (2024-12-31): $1.19
Note: Many fast-growing companies reinvest heavily, so Owners' Earnings may appear low.
Consider other factors in your valuation.
Value-Trade has assigned 15 points to above European Wax Center Inc (EWCZ) stock.
Last 4 Years Avg PE
23.2, Fair Value PE
12, Industry Based PE
23, Growth Based PE
15, RCFC Based PE
11.54, ROE Based PE
10.08, Risk-Free Anchored PE (25% MoS)
18.2. Based on these 7 values, average assigned is
16.15. Value-Trades has assined P/E value
16.15. An average (Current Year EPS + Next Year EPS) earning per share is
$0.5332.
Fair value using multiple P/Es (blended): $8.61 (PE 16.15 × EPS $0.53)
So the Final Fair Value is: $8.61
Understanding the Value-Trades P/E Blend (click to expand)
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What goes into the blended P/E?
- 20-Year Avg P/E — Long-run market baseline; conservative anchor.
- Fair Value P/E — Score-based (cash, debt, sector, etc.).
- Industry P/E — Peer group norm.
- Growth-Based P/E — Uses tapered growth rates, floored at 15.
- RCFC-Based P/E — Maps cash conversion efficiency.
- ROE-Based P/E — Higher ROE supports higher multiples.
- Risk-Free Anchored P/E — Macro floor tied to 10y yield w/ MoS.
How it works
- Extreme values are clamped/filtered (IQR method).
- Anchors (20y avg, RCFC/ROE, risk-free) are always kept if valid.
- Final fair value = min(Blended PE × EPS, Avg PE × EPS).
P/E Reference Summary
Using EPS: $0.53
Using Owners' Earnings (Latest FCF/Share): $1.23
Note: Many highly growing companies reinvest heavily back into the business,
so their Owners' Earnings may appear very low. In such cases, other criteria should
be considered to assess the company’s true worth.
| Source |
P/E Ratio |
Implied Fair Value |
| Market (1 Yr Ago) | 14.48 | $7.72 |
| 4 Yrs Avg-PE | 23.2 | $12.37 |
| Value-Trades Assigned | 16.15 | $8.61 |
| Owners' Earnings × 4 Yrs Avg-PE |
23.2 |
— (Excluded >5× current price) |
Note: Only 4 years of reliable P/E data available. Fair value is calculated using blended models to reduce bias.
