Guggenheim downgraded Mister Car Wash Inc. (MCW) from Buy to Neutral on Tuesday and removed any price target from its coverage following the announcement that the company will be taken private. The firm framed the change as a response to the transaction terms and the company’s prolonged inability to gain meaningful market traction since its initial public offering.
The analyst team at Guggenheim noted that the company has not been embraced by investors since its $15 IPO in 2021. Shares have traded persistently below that level and beneath Guggenheim’s original $9.50 price target for an extended period. The research note pointed to the relatively small public float - roughly $700 million - as another factor that has dampened broader investor engagement.
Operationally, Mister Car Wash reported $1.04 billion in revenue and nearly 7% growth over the last twelve months, but Guggenheim highlighted that these top-line results did not translate into sustained market interest. The firm calculated that the announced $7 per share acquisition price equates to about a 9x multiple on last-twelve-months EBITDA, a level below Guggenheim’s $8 price target and, in the firm’s view, consistent with the market’s long-standing skepticism.
Independent data noted in the firm’s write-up shows MCW’s LTM EBITDA at $292.69 million, and that the company traded at an enterprise value-to-EBITDA multiple of 12.63 prior to the deal announcement. Guggenheim said it remains uncertain if or when the company might undergo a re-rating back to higher valuation multiples under public ownership.
The research also remarked that easing capacity additions among some competitors - tied to financial stress in parts of the industry - had not produced the rebound in MCW’s stock that Guggenheim had anticipated. The firm suggested that changing competitive dynamics could nevertheless create opportunities to fortify long-term positioning through incremental unit expansion and stepped-up marketing efforts, but acknowledged those moves could weigh on near-term profit and loss statements.
Separately, Mister Car Wash confirmed a definitive merger agreement with Leonard Green & Partners (LGP) that values the company at $3.1 billion. LGP already holds approximately 67% of the company’s outstanding shares and will purchase the remaining publicly held stock for $7.00 per share in cash. The cash consideration represents a 29% premium to the volume-weighted average share price over the 90 days ending Feb. 17, 2026.
Rating agency Moody’s has moved Mister Car Wash’s outlook from stable to positive. Moody’s cited improved operating performance as the driver of its outlook change, pointing specifically to positive same-store sales growth, rising club membership counts, and an improvement in the company’s EBITDA margin.
Guggenheim’s downgrade and the subsequent removal of a price target reflect the firm’s assessment that the announced take-private transaction materially alters the public-market investment case for MCW. At the same time, the deal’s premium to recent trading and Moody’s more favorable outlook underscore a mixed set of signals about the company’s near-term operating momentum and longer-term potential under private ownership.
Key details
- Guggenheim downgraded MCW to Neutral from Buy and removed its price target.
- The take-private deal is valued at $3.1 billion; LGP owns about 67% and will pay $7.00 per share for remaining stock.
- Transaction price represents a 29% premium to the 90-day VWAP through Feb. 17, 2026; Moody’s upgraded the outlook to positive.