UniFirst (UNF) AI Stock Analysis

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UniFirst

(NYSE:UNF)

79Outperform

UniFirst demonstrates strong financial health with robust cash flow and low leverage, supported by positive earnings call insights. However, technical indicators suggest caution due to a bearish trend, and valuation metrics indicate the stock is fairly priced.

Positive Factors

Earnings

Adjusted EPS increased 14%, to $1.40, above the consensus estimate.

Financial Performance

Better-than-expected operating performance in the core laundry business is expected to continue.

Guidance

Fiscal 2025 adjusted EPS guidance was raised, now calling for adjusted EPS above the consensus estimate.

Negative Factors

Growth Challenges

Management noted that organic growth was to be hard to come by in F2025.

Organic Revenue Growth

Initial F2025 revenue guidance assumes less than 2% Core Laundry organic revenue growth, which is a deceleration.

Revenue Outlook

Management reduced its top-line outlook by $5.5 million at the midpoint.

UniFirst (UNF) vs. S&P 500 (SPY)

Market Cap

$3.17B

Dividend Yield0.77%

Average Volume (3M)176.17K

Price to Earnings (P/E)22.1

Beta (1Y)0.62

Revenue Growth5.04%

EPS Growth31.69%

CountryUS

Employees16,000

SectorIndustrials

Sector Strength72

IndustrySpecialty Business Services

Share Statistics

EPS (TTM)8.04

Shares Outstanding15,006,502

10 Day Avg. Volume118,097

30 Day Avg. Volume176,169

Financial Highlights & Ratios

PEG Ratio0.70

Price to Book (P/B)N/A

Price to Sales (P/S)1.50

Price to Cash Flow (P/CF)15.80

P/FCF Ratio15.20

Enterprise Value/Market Cap1.22

Enterprise Value/RevenueN/A

Enterprise Value/Gross Profit4.58

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$181.67

Price Target Upside2.41% Upside

Rating ConsensusHold

Number of Analyst Covering4

UniFirst Business Overview & Revenue Model

Company DescriptionUniFirst Corporation is a leading provider of workplace uniforms and facility services. Headquartered in Wilmington, Massachusetts, UniFirst designs, manufactures, sells, and rents uniforms and protective clothing to a wide range of industries, including automotive, food processing, healthcare, and manufacturing. The company also offers ancillary services such as floor mat rentals, restroom supplies, and other facility service products to help businesses maintain clean and professional environments.

How the Company Makes MoneyUniFirst Corporation generates revenue primarily through its uniform rental and sales services. The company operates a highly efficient industrial laundry network that allows it to provide uniform laundering and delivery services on a weekly basis, ensuring convenience for its clients. Revenue streams include long-term rental agreements where customers pay a recurring fee for uniform rental and maintenance, as well as direct sales where customers purchase uniforms outright. Additionally, UniFirst offers complementary services such as facility service products, including floor mats, mops, and restroom supplies, which provide additional revenue. Strategic partnerships with suppliers and a focus on customer service contribute to its earnings, allowing UniFirst to maintain a competitive edge in the uniform rental and services market.

UniFirst Financial Statement Overview

Summary

UniFirst exhibits strong financial health with consistent revenue growth, high equity ratios, and effective cash flow generation. While profitability metrics are solid, slight declines in operational margins suggest a need for cost management.

Income Statement

Very Positive

UniFirst has demonstrated consistent revenue growth, with a Revenue Growth Rate of 1% TTM (Trailing-Twelve-Months). The Gross Profit Margin stands at 32.72% TTM, indicating strong cost management. The Net Profit Margin is solid at 6.13% TTM. However, there is a slight decrease in both EBIT Margin (7.72% TTM) and EBITDA Margin (13.68% TTM), which suggests rising operational costs that need monitoring.

Balance Sheet

Very Positive

The company's financial health is robust, with a low Debt-to-Equity Ratio of 0.03 TTM, highlighting minimal leverage risk. Return on Equity (ROE) is stable at 7.01% TTM, reflecting efficient equity usage for generating profits. An Equity Ratio of 78.42% TTM showcases a strong equity base, ensuring financial stability.

Cash Flow

Very Positive

UniFirst's cash flow performance is strong, with Free Cash Flow Growth Rate at 70.05% TTM, indicating significant improvement in cash generation. The Operating Cash Flow to Net Income Ratio is robust at 2.11 TTM, and the Free Cash Flow to Net Income Ratio is 1.53 TTM, both showing effective cash conversion from profits.

Sep 2024	Sep 2023	Sep 2022	Sep 2021	Sep 2020
Breakdown
Income Statement		Total Revenue
2.43B	2.23B	2.00B	1.83B	1.80B
	Gross Profit
847.60M	751.75M	694.37M	684.94M	639.23M
	EBIT
183.58M	133.51M	134.28M	195.82M	172.73M
	EBITDA
325.01M	262.03M	244.10M	302.76M	278.36M
	Net Income Common Stockholders
145.47M	103.67M	103.40M	151.11M	135.77M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
175.08M	89.60M	376.40M	512.87M	474.84M
	Total Assets
2.70B	2.57B	2.43B	2.38B	2.20B
	Total Debt
68.81M	64.76M	51.67M	43.17M	41.83M
	Net Debt
-92.76M	-14.68M	-324.73M	86.35M	83.66M
	Total Liabilities
587.90M	566.01M	512.10M	508.11M	457.90M
	Stockholders Equity
2.11B	2.00B	1.92B	1.87B	1.74B
Cash Flow		Free Cash Flow
134.85M	43.77M	-21.67M	78.66M	169.97M
	Operating Cash Flow
295.27M	215.76M	122.65M	212.30M	286.68M
	Investing Cash Flow
-162.24M	-487.65M	-186.51M	-141.47M	-157.62M
	Financing Cash Flow
-50.36M	-25.84M	-69.44M	-34.26M	-41.10M

UniFirst Technical Analysis

Technical Analysis Sentiment

Neutral

Last Price177.39

Price Trends

50DMA

191.51

Negative

100DMA

197.18

Negative

200DMA

192.53

Negative

Market Momentum

MACD

-4.38

Negative

RSI

48.02

Neutral

STOCH

75.34

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For UNF, the sentiment is Neutral. The current price of 177.39 is above the 20-day moving average (MA) of 172.21, below the 50-day MA of 191.51, and below the 200-day MA of 192.53, indicating a neutral trend. The MACD of -4.38 indicates Negative momentum. The RSI at 48.02 is Neutral, neither overbought nor oversold. The STOCH value of 75.34 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for UNF.

UniFirst Risk Analysis

UniFirst disclosed 27 risk factors in its most recent earnings report. UniFirst reported the most risks in the “Production” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

UniFirst Peers Comparison

Overall Rating

UnderperformOutperform

Sector (63)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
UNF	79 Outperform	$3.17B	22.05	7.17%	0.77%	5.04%	31.69%
CTAS	76 Outperform	$84.15B	48.67	40.15%	0.72%	7.79%	19.09%
CBZ	73 Outperform	$3.58B	45.15	6.25%	―	32.27%	-40.50%
ABM	67 Neutral	$2.92B	37.03	4.46%	1.95%	2.81%	-67.57%
BV	67 Neutral	$1.32B	82.50	4.15%	―	-1.69%	―
Sector *	63 Neutral	$4.27B	11.40	5.38%	214.63%	4.11%	-8.98%
ARMK	61 Neutral	$8.73B	25.99	11.46%	1.21%	-5.98%	-46.55%

* Industrials Sector Average

Performance Comparison

UNF

UniFirst

177.39

15.64

9.67%

ABM

ABM Industries

48.31

4.89

11.26%

CBZ

CBIZ

66.19

-5.78

-8.03%

CTAS

Cintas

208.40

43.22

26.17%

ARMK

ARAMARK Holdings

32.93

0.84

2.62%

BrightView Holdings

13.81

2.46

21.67%

UniFirst Earnings Call Summary

Earnings Call Date:Apr 02, 2025

(Q2-2025)

% Change Since: 1.16%|

Next Earnings Date:Jun 25, 2025

Earnings Call Sentiment Positive

The earnings call presented a largely positive outlook with significant improvements in revenue, profitability, and cash flow. Customer retention and new business installations showed positive trends, along with strategic investments and expansions. However, there were challenges such as declining net wearer levels, higher health care costs, and reduced margins in the specialty garment segment.

Q2-2025 Updates

Positive Updates

Revenue and Profitability Growth

Second quarter consolidated revenues were $602.2 million, an increase of 1.9% from fiscal 2024. Operating income and adjusted EBITDA increased by 11.7% and 6.3%, respectively. Net income for the quarter increased to $24.5 million from $20.5 million.

Improved Cash Flow

Operating cash flow year-to-date was up 20.2% compared to the same period a year ago, primarily due to improved profitability and lower working capital needs.

Customer Retention and New Business

Notable improvements in customer retention compared to the same quarter a year ago, and more new business was installed than a year ago by a solid margin.

Specialty Garment and First Aid Segments Growth

Revenues from the specialty garment segment increased by 2.2% due to strong European nuclear operations. The first aid segment's revenues increased by 10.6%, driven by strong growth in van operations.

Strategic Investments and Expansion

Expansion of the distribution center in Owensboro, Kentucky, to improve speed and efficiency for direct sales of uniforms. Continued investments in growth and operational execution.

Negative Updates

Net Wearer Levels Decline

Net wearer levels for existing customers declined in the quarter, showing some incremental weakness compared to the same quarter last year.

Higher Health Care Costs

Higher health care costs partially offset improvements in operating income and adjusted EBITDA.

Challenges in Specialty Garment Segment

Operating margin for the specialty garment segment decreased to 16.7% from 22.8% in the prior year.

Company Guidance

During the UniFirst Second Quarter 2025 Earnings Conference Call, the company provided guidance reflecting a positive trajectory in several financial metrics. UniFirst reported consolidated revenues of $602.2 million, marking a 1.9% increase from fiscal 2024, with organic growth at 2.3%. Operating income rose significantly by 11.7%, reaching $31.2 million, while adjusted EBITDA improved by 6.3% to $68.9 million, compared to the same quarter last year. The company also noted a 20.2% increase in operating cash flow year-to-date. For the full fiscal year 2025, UniFirst anticipates revenues between $2.422 billion and $2.432 billion, and diluted earnings per share (EPS) ranging from $7.30 to $7.70. This outlook reflects ongoing improvements in core laundry operations and an updated assumption of $12 million in key initiative costs, slightly revised down from prior estimates.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

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.