What Happened?
Shares of beauty and waxing service franchise European Wax Center (NASDAQ:EWCZ) jumped 42.6% in the afternoon session after the company agreed to be acquired and taken private by investment firm General Atlantic for $5.80 per share in an all-cash deal.
The purchase price represented a significant 45% premium to the stock's closing price the previous day, valuing the company at approximately $330 million. The transaction was evaluated and unanimously recommended by an independent special committee of the company's board before receiving full board approval. In response to the announcement, which effectively capped the stock's near-term price at the buyout level, Truist Securities downgraded European Wax Center's stock from Buy to Hold and lowered its price target to the deal price of $5.80.
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What Is The Market Telling Us
European Wax Center’s shares are extremely volatile and have had 43 moves greater than 5% over the last year. But moves this big are rare even for European Wax Center and indicate this news significantly impacted the market’s perception of the business.
The biggest move we wrote about over the last year was 3 months ago when the stock gained 15.8% on the news that the company reported third-quarter 2025 financial results that surpassed Wall Street's expectations on profit and revenue. Although revenue declined 2.2% year on year to $54.2 million, the figure still topped analysts' forecasts. The company's profitability was a key highlight for the quarter. GAAP earnings per share of $0.09 was more than double the consensus estimate of $0.04. Furthermore, adjusted EBITDA, a key measure of profitability, came in at $20.2 million, handily beating expectations of $15.7 million. While the company reaffirmed its full-year revenue outlook, its full-year EBITDA guidance was slightly below analysts' projections. Overall, the strong bottom-line performance appeared to outweigh the mixed guidance, driving investor optimism.
European Wax Center is up 66.1% since the beginning of the year, but at $5.72 per share, it is still trading 23.3% below its 52-week high of $7.45 from February 2025. Investors who bought $1,000 worth of European Wax Center’s shares at the IPO in August 2021 would now be looking at an investment worth $267.18.
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