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ARAMARK Holdings
(NYSE:ARMK)
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Rating:65Neutral
Price Target:
$62.00
▲(8.43% Upside)
Action:Reiterated
Date:05/14/26
The score is driven primarily by stable-but-debt-constrained financials and a constructive earnings outlook with raised revenue guidance and continued margin expansion. Technicals are supportive but show overbought conditions, while valuation is a headwind due to a higher P/E and modest yield.
Positive Factors
High client retention and recurring contracts
A >98% client retention rate across long-term outsourced service contracts delivers predictable, recurring revenue and low churn. This stability supports multi-year cash-flow visibility, easier cross-sell/upsell, and underpins sustainable margin recovery and contract-renewal economics over time.
Negative Factors
Elevated leverage and capital-structure risk
A debt-heavy capital structure (debt-to-equity ~2.0) constrains financial flexibility, increases refinancing and interest-rate sensitivity, and limits the company's ability to pursue opportunistic M&A or absorb downturns. Elevated leverage raises the priority of cash generation for de-risking the balance sheet.
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Positive Factors
Negative Factors
High client retention and recurring contracts
A >98% client retention rate across long-term outsourced service contracts delivers predictable, recurring revenue and low churn. This stability supports multi-year cash-flow visibility, easier cross-sell/upsell, and underpins sustainable margin recovery and contract-renewal economics over time.
Read all positive factors
ARAMARK Holdings Key Performance Indicators (KPIs)
ARAMARK Holdings (ARMK) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$14.98B
Dividend Yield0.82%
Average Volume (3M)2.43M
Price to Earnings (P/E)41.9
Beta (1Y)0.67
Revenue Growth10.15%
EPS Growth3.07%
CountryUS
Employees278,390
SectorIndustrials
Sector Strength72
IndustrySpecialty Business Services
Share Statistics
EPS (TTM)1.36
Shares Outstanding262,953,550
10 Day Avg. Volume2,634,929
30 Day Avg. Volume2,434,010
Financial Highlights & Ratios
PEG Ratio1.31
Price to Book (P/B)3.27
Price to Sales (P/S)0.56
P/FCF Ratio22.64
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$63.21Price Target Upside10.54% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering13
EPS Forecast (FY)2.25
Revenue Forecast (FY)$19.97B
ARAMARK Holdings Business Overview & Revenue Model
Company Description
Based in Philadelphia, Pennsylvania, Aramark, established in 1959, provides a comprehensive array of services encompassing food management, facility solutions, and uniform provision. The company serves a diverse global clientele, including educati...
How the Company Makes Money
Aramark primarily makes money by operating under long-term, outsourced service contracts in which it manages on-site programs for client locations. A major revenue stream is food services: Aramark sells meals and beverages in client venues (e.g., ...
ARAMARK Holdings Earnings Call Summary
Earnings Call Date:May 12, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Aug 11, 2026
Earnings Call Sentiment Positive
The call highlighted broad-based revenue and profit acceleration, strong cash generation, high client retention and substantial new-business momentum, including a strategically important entry into the hyperscale AI data center market (Aramark Nexus) that could add significant upside. Near-term comparability is aided by a calendar/53rd-week benefit and Nexus ramp timing remains uncertain and excluded from FY26 guidance. Operationally the company emphasized disciplined cost and supply-chain management and raised the top-end of revenue guidance while reaffirming profit targets.Positive Updates
Record Organic Revenue Growth
Q2 organic revenue grew 12% to $4.8B (includes ~3% calendar/53rd-week benefit). FSS U.S. organic revenue +12% to $3.4B (would be ~8% without calendar shift). International organic revenue +13% to $1.4B (includes ~1% calendar benefit). Year-to-date organic revenue growth 8.5%.
Negative Updates
Calendar/53rd-Week Effects and Comparability Distortion
An estimated calendar shift (53rd week) drove a ~3% boost to Q2 organic revenue and benefited AOI by roughly $25M (~12%) and adjusted EPS growth by ~20%, creating a non-recurring comparator that inflates quarter-over-quarter growth metrics.
Read all updates
Q2-2026 Updates
Positive
Negative
Record Organic Revenue Growth
Q2 organic revenue grew 12% to $4.8B (includes ~3% calendar/53rd-week benefit). FSS U.S. organic revenue +12% to $3.4B (would be ~8% without calendar shift). International organic revenue +13% to $1.4B (includes ~1% calendar benefit). Year-to-date organic revenue growth 8.5%.
Read all positive updates
Company Guidance
Management updated fiscal 2026 guidance by raising organic revenue growth to the high end of its prior 7%–9% range, while reaffirming adjusted operating income (AOI) growth of 12%–17% and adjusted EPS growth of 20%–25%, and saying they expect continued, accelerated AOI margin expansion (management cited historical 30–40 bps tailwinds from new‑business openings); the outlook does not yet include contributions from the new hyperscale AI data‑center engagement. For context, Q2 organic revenue was +12% to $4.8B (including an estimated +3% calendar/53rd‑week benefit; H1 organic +8.5%), operating income was $220M (+26%), AOI $258M (+24% constant currency; AOI margins +50 bps; calendar shift aided AOI by ~$25M or ~12%), GAAP EPS $0.38 and adjusted EPS $0.49 (+40% cc; calendar shift aided adj. EPS by ~20%), interest expense $82M, adjusted tax rate 25.3%, net cash from operations $400M (+56%), free cash flow $305M (+116%), ~$194M of share repurchases to date, $55M of term‑loan repayments, >$1.4B cash availability and a target leverage ratio below 3.0x by year‑end.ARAMARK Holdings Financial Statement Overview
Summary
Income Statement
63
Positive
Balance Sheet
52
Neutral
Cash Flow
67
Positive
| Breakdown | TTM | Sep 2025 | Sep 2024 | Sep 2023 | Sep 2022 | Sep 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 19.41B | 18.51B | 17.40B | 16.08B | 13.69B | 12.10B |
| Gross Profit | 1.25B | 1.07B | 1.43B | 1.31B | 1.07B | 1.09B |
| EBITDA | 1.33B | 1.25B | 1.19B | 1.44B | 830.05M | 831.55M |
| Net Income | 357.03M | 326.39M | 262.52M | 674.11M | 194.48M | -90.83M |
Balance Sheet | ||||||
| Total Assets | 13.84B | 13.30B | 12.67B | 16.87B | 15.08B | 14.38B |
| Cash, Cash Equivalents and Short-Term Investments | 475.72M | 639.10M | 714.83M | 2.04B | 329.45M | 532.59M |
| Total Debt | 6.42B | 5.72B | 5.57B | 6.94B | 7.79B | 7.83B |
| Total Liabilities | 10.50B | 10.14B | 9.63B | 13.15B | 12.04B | 11.64B |
| Stockholders Equity | 3.28B | 3.15B | 3.04B | 3.71B | 3.03B | 2.72B |
Cash Flow | ||||||
| Free Cash Flow | 415.95M | 454.46M | 299.09M | 305.02M | 329.74M | 249.26M |
| Operating Cash Flow | 870.29M | 921.03M | 726.51M | 766.43M | 694.50M | 657.08M |
| Investing Cash Flow | -556.47M | -722.42M | -415.86M | 208.91M | -831.29M | -634.39M |
| Financing Cash Flow | -768.75M | -234.63M | -1.56B | 653.65M | -37.69M | -2.01B |
ARAMARK Holdings Technical Analysis
Neutral
57.18
Price Trends
55.37
Positive
49.84
Positive
44.14
Positive
Market Momentum
0.47
Positive
48.61
Neutral
29.49
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ARMK, the sentiment is Neutral. The current price of 57.18 is above the 20-day moving average (MA) of 57.11, above the 50-day MA of 55.37, and above the 200-day MA of 44.14, indicating a neutral trend. The MACD of 0.47 indicates Positive momentum. The RSI at 48.61 is Neutral, neither overbought nor oversold. The STOCH value of 29.49 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral 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
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
82 Outperform | $81.89B | 41.17 | 41.80% | 0.87% | 8.94% | 11.03% | |
72 Outperform | $2.95B | 25.15 | 6.60% | ― | 14.32% | 22.34% | |
67 Neutral | $2.81B | 18.36 | 8.94% | 2.38% | 6.53% | 107.41% | |
67 Neutral | $5.09B | 44.26 | 5.32% | 0.49% | 1.41% | -22.01% | |
65 Neutral | $14.98B | 41.89 | 11.23% | 0.81% | 10.15% | 3.07% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
60 Neutral | $11.68B | 24.44 | 5.82% | 2.18% | 2.92% | 43.13% |
* Industrials Sector Average
ARMK
ARAMARK Holdings
56.22
17.10
43.72%
ABM
ABM Industries
49.18
3.43
7.50%
CBZ
CBIZ
55.08
-7.60
-12.13%
CTAS
Cintas
203.65
-17.11
-7.75%
UNF
UniFirst
290.35
119.64
70.08%
RTO
Rentokil Initial
25.06
1.83
7.87%
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.