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ARAMARK Holdings (ARMK)
NYSE:ARMK
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ARAMARK Holdings (ARMK) AI Stock Analysis

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ARMK

ARAMARK Holdings

(NYSE:ARMK)

Rating:67Neutral
Price Target:
$43.00
▲(9.86% Upside)
ARAMARK Holdings' overall stock score reflects strong financial performance and positive earnings call highlights, including record revenue and significant client wins. However, technical indicators suggest bearish momentum, and the valuation appears high relative to peers. The company's strategic focus on capital allocation and operational efficiency supports its growth outlook.
Positive Factors
Retention Rate
ARAMARK's retention rate is impressive, exceeding 97% and approaching best-in-class levels.
Technology and Efficiency
ARAMARK's use of IT and AI tools for sourcing and supply chain management boosts confidence in future performance.
Negative Factors
Organic Growth
Organic growth came in below expectations, again, with organic growth of 3.1% missing estimates by approximately 170 basis points.
Revenue Expectations
Revenue momentum has not met expectations, resulting in a reset of elevated expectations.

ARAMARK Holdings (ARMK) vs. SPDR S&P 500 ETF (SPY)

ARAMARK Holdings Business Overview & Revenue Model

Company DescriptionARAMARK Holdings Corporation (ARMK) is a global leader in food services, facilities management, and uniform services, serving clients in various sectors including education, healthcare, business, and sports. The company operates through segments such as Food and Support Services, Uniform and Career Apparel, and provides a range of services that include catering, facility management, and employee uniform solutions. ARAMARK focuses on delivering customized solutions to enhance the customer experience across its diverse portfolio of services.
How the Company Makes MoneyARAMARK generates revenue primarily through its various service contracts in food services, facilities management, and uniform services. Key revenue streams include sales from food and beverage services in educational institutions and healthcare facilities, alongside management fees and service contracts for facility management. The company also earns income through uniform rental and sales, as well as through partnerships and contracts with corporations, government agencies, and non-profit organizations. Significant factors contributing to its earnings include long-term contracts with clients, a broad customer base across multiple sectors, and the ability to adapt services to meet specific client needs, which enhances customer retention and drives revenue growth.

ARAMARK Holdings Earnings Call Summary

Earnings Call Date:Aug 05, 2025
(Q3-2025)
|
% Change Since: |
Next Earnings Date:Nov 18, 2025
Earnings Call Sentiment Positive
The earnings call highlighted strong financial performance, significant client wins, and effective use of AI in operations. Challenges included a decline in arena activity and increased medical expenses. Overall, positive momentum is evident with strong revenue growth and client retention.
Q3-2025 Updates
Positive Updates
Record Revenue and Profitability
Aramark reported record revenue for any quarter in Global FSS history, with adjusted EPS growth of nearly 30%.
Significant Client Wins
Aramark achieved significant milestones, including one of the largest new client wins in Sports & Entertainment, and maintained a client retention rate exceeding 97%.
Strong Segment Performance
FSS U.S. organic revenue increased to $3.2 billion, over 3%, driven by strong performance in workplace experience, refreshments, and new client wins.
International Growth
International organic revenue grew by 10% with every geography experiencing growth, led by the U.K., Chile, Canada, and Spain.
Supply Chain and AI Initiatives
Aramark introduced AI-driven technology for supply chain improvements, enhancing contract intelligence and operational efficiency.
Strong Balance Sheet and Capital Allocation
Aramark maintained a strong and flexible balance sheet, repaid $62 million of Term Loan B, and repurchased $31 million of common stock.
Negative Updates
Arena and Concert Activity Decline
Revenue growth was impacted by lower concert activity and renovations at venues like the Verizon Center.
Increased Medical Expenses
U.S. segment AOI growth was affected by higher medical expenses, including costs related to high-cost claims and GLP-1 drugs.
Company Guidance
During Aramark's third quarter fiscal 2025 earnings call, the company reported record revenue of $4.6 billion and a 6% increase in revenue with slight foreign exchange (FX) favorability. Organic revenue grew over 5%, driven by base business growth and new client wins. Aramark maintained a client retention rate exceeding 97% in both its U.S. and International FSS segments. The U.S. segment saw organic revenue growth of over 3%, led by workplace experience, refreshments, and education sectors. Internationally, organic revenue increased by 10% to $1.4 billion, with strong growth in the U.K., Chile, Canada, and Spain. Operating income for the quarter was $183 million, up 13%, while adjusted operating income was $230 million, up 19%, with an AOI margin increase of 60 basis points. Looking forward, Aramark anticipates strong revenue performance in the fourth quarter from base business expansion and new business, supported by a sales pipeline and client retention rates. The company remains focused on strategic capital allocation, including debt repayment and share repurchases.

ARAMARK Holdings Financial Statement Overview

Summary
ARAMARK Holdings is showing signs of financial improvement with increased revenue growth, reduced leverage, and strong cash flow generation. However, the decline in gross profit margin indicates potential challenges in cost management. The company is on a positive trajectory with improved profitability and cash flow metrics, positioning it well for future growth.
Income Statement
65
Positive
ARAMARK Holdings has shown a positive trend in revenue growth with a TTM increase of 1.42% compared to a decline in the previous year. The gross profit margin has decreased significantly in the TTM period to 2.22% from 8.19% in the previous year, indicating potential cost management issues. However, the net profit margin has improved to 2.02% in the TTM, reflecting better profitability. The EBIT and EBITDA margins have remained relatively stable, suggesting operational efficiency.
Balance Sheet
70
Positive
The company's debt-to-equity ratio has improved significantly to 0.12 in the TTM from 1.83 in the previous year, indicating reduced leverage and a stronger equity position. Return on equity has increased to 11.83%, showing enhanced profitability for shareholders. The equity ratio remains stable, reflecting a balanced asset structure.
Cash Flow
75
Positive
ARAMARK Holdings has demonstrated strong free cash flow growth of 69.20% in the TTM, indicating robust cash generation capabilities. The operating cash flow to net income ratio has improved, suggesting better cash conversion efficiency. The free cash flow to net income ratio is healthy at 81.84%, highlighting effective cash management.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue17.87B17.40B16.08B13.69B12.10B12.83B
Gross Profit1.53B1.43B1.31B1.07B1.09B835.89M
EBITDA1.31B1.19B1.44B830.05M831.55M336.91M
Net Income361.67M262.52M674.11M194.48M-90.83M-461.44M
Balance Sheet
Total Assets13.28B12.67B16.87B15.08B14.38B15.71B
Cash, Cash Equivalents and Short-Term Investments501.49M714.83M2.04B329.45M532.59M2.51B
Total Debt6.62B5.57B6.94B7.79B7.83B9.69B
Total Liabilities10.19B9.63B13.15B12.04B11.64B12.97B
Stockholders Equity3.08B3.04B3.71B3.03B2.72B2.74B
Cash Flow
Free Cash Flow280.76M299.09M305.02M329.74M281.74M-187.75M
Operating Cash Flow767.09M726.51M766.43M694.50M657.08M176.68M
Investing Cash Flow-650.64M-415.86M208.91M-831.29M-634.39M-361.12M
Financing Cash Flow-81.25M-1.56B653.65M-37.69M-2.01B2.44B

ARAMARK Holdings Technical Analysis

Technical Analysis Sentiment
Negative
Last Price39.14
Price Trends
50DMA
41.36
Negative
100DMA
39.33
Negative
200DMA
38.19
Positive
Market Momentum
MACD
-0.61
Negative
RSI
41.63
Neutral
STOCH
34.84
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ARMK, the sentiment is Negative. The current price of 39.14 is below the 20-day moving average (MA) of 39.47, below the 50-day MA of 41.36, and above the 200-day MA of 38.19, indicating a neutral trend. The MACD of -0.61 indicates Negative momentum. The RSI at 41.63 is Neutral, neither overbought nor oversold. The STOCH value of 34.84 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for ARMK.

ARAMARK Holdings Risk Analysis

ARAMARK Holdings disclosed 32 risk factors in its most recent earnings report. ARAMARK Holdings reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

ARAMARK Holdings Peers Comparison

Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
76
Outperform
$3.19B21.537.15%0.78%4.18%18.93%
76
Outperform
$12.21B36.795.86%2.68%1.56%-32.50%
73
Outperform
$83.35B46.7140.13%0.78%7.75%16.21%
72
Outperform
$2.99B39.004.30%2.12%3.52%-67.27%
67
Neutral
$10.19B28.6812.00%1.08%-0.06%3.83%
65
Neutral
$3.24B34.597.84%46.49%-25.62%
64
Neutral
$10.73B15.657.61%2.01%2.80%-14.92%
* Industrials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
ARMK
ARAMARK Holdings
39.14
1.86
4.99%
ABM
ABM Industries
48.10
-0.83
-1.70%
CBZ
CBIZ
59.97
-5.63
-8.58%
CTAS
Cintas
206.84
7.17
3.59%
UNF
UniFirst
178.96
0.75
0.42%
RTO
Rentokil Initial
25.15
-5.46
-17.84%

ARAMARK Holdings Corporate Events

Private Placements and Financing
Aramark Holdings Refinances Loans with New Agreement
Neutral
Aug 18, 2025

On August 15, 2025, Aramark Services, Inc., a subsidiary of Aramark Holdings, entered into Amendment No. 18 to its Credit Agreement with JPMorgan Chase Bank and other financial institutions. This amendment involved refinancing the U.S. Term B-7 Loans with new U.S. Term B-9 Loans amounting to $730,458,023.44, due in April 2028. The new loans, funded in full on the closing date, carry interest based on either a forward-looking term rate or a base rate, and do not require quarterly principal repayments. The terms are similar to those of the previous loans, impacting the company’s financial structure and potentially affecting stakeholders.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Aug 26, 2025