What happened

Shares of Driven Brands (DRVN -0.28%), owner of such famous automotive businesses as Meineke Car Care Centers, Maaco, and Take 5 Car Wash, tumbled after reporting a big earnings miss Wednesday morning, falling 37.3% through 1:15 p.m. ET.

Analysts had forecast Driven Brands would earn $0.31 per share on sales of $587.7 million in the second quarter of 2023. As it turned out, while Driven Brands beat this revenue target easily, reporting sales of $606.8 million, the company's profits didn't quite measure up, and came in at just $0.22 per share.  

So what

But was the news really as bad as it sounds?

Driven Brands owed its revenue beat to a 7% increase in its store count and an 8% increase in same-store sales -- which compounded into 18% total revenue growth for the company. Earnings, while missing expectations, were at least positive, which was a big improvement over last year, when Driven Brands lost $57 million in Q2.  

The problem is, this improvement probably won't last.

Turning to guidance, management warned that its car wash and windshield glass repair businesses have been "impacted" by weak consumer demand and integration delays, respectively. And these "weaker than anticipated performances," said CEO Jonathan Fitzpatrick, convinced management of the need to lower its guidance for the rest of this year.

Instead of revenue of $2.35 billion, management now expects the number to be just $2.3 billion. That's not a huge difference, of course. But management also warned that its adjusted earnings per share will come in about 25% short of prior expectations at $0.92 per share.

Now what

For a stock trading at $16 and change (after today's sell-off), that works out to about a 17.6 times earnings valuation on Driven Brands stock, which to be honest, doesn't sound that excessive to me -- especially not with management still forecasting 15% revenue growth this year.

True, earnings appear likely to move in the opposite direction in the near term, which isn't a great look for Driven Brands. But remember that the average age of cars on America's roads is 12.5 years right now, and still climbing at last report. And the average price of new cars is still hovering in the $50,000 range. My hunch is that consumers are going to end up using Driven Brands' services more, not less, whether they like it or not, if they want to keep their increasingly ancient jalopies mobile.

Seems to me, that's a good reason to bet on Driven Brands stock recovering sooner rather than later. And it's an argument in favor of viewing today's sell-off more as a buying opportunity than as a reason to panic.