Introducing Valuation Models! 
Key Takeaways:
- European Wax Center stock could reasonably reach $6/share by the end of 2027, based on our valuation assumptions.
- This implies a total return of 20% from today’s price of $5/share, with an annualized return of 8% over the next 2.4 years.
- European Wax Center operates as the leading franchised waxing salon chain with over 1,000 locations, focusing on premium out-of-home hair removal services.
European Wax Center (EWCZ) is a franchise-based personal care company that has evolved from a single location concept to the largest waxing salon chain in the United States, serving customers through a network of over 1,000 centers specializing in professional waxing services and related personal care products.
Through its franchise model spanning multiple states, European Wax Center has created a differentiated experience centered around proprietary Comfort Wax technology, standardized service protocols, and the popular Wax Pass subscription program that drives customer loyalty and recurring revenue.
European Wax Center benefits from its category leadership position in the fragmented out-of-home hair removal market, with strong brand recognition, proven unit economics, and a resilient core customer base that values the convenience and quality of professional waxing services.
With strategic initiatives including enhanced digital marketing capabilities, refined brand positioning, operational excellence improvements, and a more disciplined approach to new center development, European Wax Center is working to stabilize its foundation and return to sustainable growth.
With new leadership implementing comprehensive turnaround strategies and early signs of stabilization in key metrics, EWCZ stock is positioning itself to overcome near-term headwinds while capitalizing on the long-term growth opportunity in personal care services.
Here’s why EWCZ stock could return 8% annually through 2027 as the company executes its reset strategy.
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What the Model Says for EWCZ Stock
We analyzed European Wax Center’s upside using valuation assumptions based on the company’s turnaround efforts under new leadership and the long-term stability of the waxing services market.
Based on estimates of 2% annual revenue growth, 22% operating margins, and normalized valuation multiples, the model projects EWCZ stock could rise from $5/share to $6/share.
That represents a 20% total return and an 8% annualized return over the next 2.4 years.
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Our Valuation Assumptions
TIKR’s Valuation Model lets you plug in your own assumptions for a company’s revenue growth, operating margins, and P/E multiple, and calculates the stock’s expected returns.
Here’s what we used for EWCZ stock:
1. Revenue Growth: 2%
European Wax Center delivered Q1 2025 results with modest system-wide sales growth of 2.1% and same-store sales growth of 70 basis points, demonstrating business stability despite challenging market conditions.
The company expects continued focus on driving traffic through enhanced marketing effectiveness, new guest acquisition improvements, and operational excellence initiatives under new leadership.
We used a 2% forecast reflecting European Wax Center’s conservative near-term outlook while the company implements foundational improvements to marketing, operations, and franchisee support, with management targeting better performance in the second half of 2025 and sustainable growth resumption by 2026.
2. Operating Margins: 22%
European Wax Center demonstrates a strong margin structure with Q1 adjusted EBITDA margins of 36.5%, benefiting from its asset-light franchise model and high-margin royalty revenue streams.
A focus on operational efficiency, franchisee profitability improvements, and strategic cost management positions EWCZ stock to maintain healthy margins while investing in growth initiatives.
3. Exit P/E Multiple: 10x
EWCZ stock trades at compressed multiples reflecting near-term execution challenges and the need to demonstrate sustainable growth recovery.
We used a conservative valuation multiple given the company’s turnaround situation, though the stable franchise model and category-leading position provide valuation support as operational improvements take hold.
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What Happens If Things Go Better or Worse?
Different scenarios for European Wax Center stock through 2030 show varied outcomes based on turnaround execution success: (these are estimates, not guaranteed returns):
- Low Case: Continued market share pressure and execution challenges → 1% annual returns
- Mid Case: Successful stabilization and gradual growth recovery → 5% annual returns
- High Case: Strong turnaround execution and market expansion → 8% annual returns
Even in the conservative case, European Wax Center stock offers modest positive returns, while the upside scenario could deliver solid performance if it successfully executes its marketing transformation, operational improvements, and returns to sustainable unit growth.
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
