Vestis Corporation (VSTS) AI Stock Analysis

• Market Cap: $798.60M
• Dividend Yield: 2.31%
• Average Volume (3M): 2.54M
• Price to Earnings (P/E): 122.8
• Beta (1Y): 1.31
• Revenue Growth: -4.11%
• EPS Growth: -115.02%
• Country: US
• Employees: 19,600
• Sector: Industrials
• Sector Strength: 86
• Industry: Rental & Leasing Services
• EPS (TTM): -0.05
• Shares Outstanding: 131,782,780
• 10 Day Avg. Volume: 1,578,547
• 30 Day Avg. Volume: 2,543,434
• PEG Ratio: 0.09
• Price to Book (P/B): 0.89
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 2.82
• Enterprise Value/Market Cap: 2.71
• Enterprise Value/Revenue: 0.19
• Enterprise Value/Gross Profit: 2.83
• Enterprise Value/Ebitda: 1.92
• 1Y Price Target: $5.75
• Price Target Upside: -5.12% Downside
• Rating Consensus: Moderate Sell
• Number of Analyst Covering: 5

• Rating: 62 Neutral
• Price Target: $6.50 ▲(7.26%Upside)

Vestis Corporation's overall score reflects a challenging financial environment with profitability issues, as highlighted by the negative net profit margin and declining revenue. Although technical and valuation metrics indicate potential risks, the company's strong cash flow generation and strategic management decisions, such as leadership changes and financial flexibility, provide a foundation for potential recovery.

Positive Factors

Industry Expertise

Phillip Holloman, who has served as chairman of Vestis’s board since 2023, brings extensive industry experience, including a 22-year tenure at Cintas Corporation.

Leadership Change

The company is entering a new chapter, adding several new executives with the intention of improving operational execution while remaining committed to its long-term strategic goals.

Negative Factors

Financial Performance

Revenue decreased 5.7%, to $665 million, below the consensus estimate of $690 million.

Future Outlook

Management pulled the prior outlook for fiscal 2025 due to the evolving operating nature of the business and a more uncertain macroeconomic outlook.

Operational Challenges

The company continues to struggle with customer service and sales despite various efforts to improve these areas operationally.

Vestis Corporation Business Overview & Revenue Model

Company Description

Vestis Corporation (VSTS) operates within the technology sector, focusing on delivering innovative solutions in the field of data analytics and enterprise software. The company specializes in providing tools and platforms that enhance business intelligence, operational efficiency, and data-driven decision-making for various industries. Through its core offerings, Vestis empowers organizations to leverage their data assets for improved performance and strategic insights.

How the Company Makes Money

Vestis Corporation generates revenue primarily through a subscription-based model for its software solutions, offering tiered pricing plans that cater to businesses of different sizes and needs. Key revenue streams include licensing fees for its analytics platforms, customized software development services, and consulting fees for implementation and training. Additionally, Vestis partners with technology firms and industry leaders to expand its market reach and enhance its product offerings, which contribute significantly to its earnings. The company also explores opportunities in the form of strategic alliances and joint ventures that can lead to new revenue channels.

Vestis Corporation Financial Statement Overview

Summary

Vestis Corporation exhibits strengths in operational efficiency as reflected in its EBITDA margin and cash flow generation. However, recent financial performance has been impacted by a decline in revenue and profitability, with a notable increase in debt levels. The company needs to address revenue growth and manage its leverage to improve financial health and shareholder returns.

Income Statement

The income statement shows a mixed performance. The TTM (Trailing-Twelve-Months) gross profit margin is 27.95%, and the net profit margin is negative at -0.89%, indicating a recent dip into losses. Revenue has decreased by 2.64% year-over-year, reflecting some challenges in maintaining growth. However, the EBITDA margin remains strong at 8.23%, highlighting operational stability despite revenue pressures.

Balance Sheet

The balance sheet reflects a stable but leveraged position. The debt-to-equity ratio is 1.60, indicating significant leverage, but the equity ratio remains healthy at 30.22%. Return on equity is negative at -2.77% in the TTM, due to recent losses, which is a concern. Overall, the company's balance sheet shows adequate equity but with high debt levels.

Cash Flow

Cash flow analysis is robust, with a positive operating cash flow to net income ratio of 14.63 in the TTM, indicating strong cash generation relative to net income. Free cash flow to net income ratio is 11.43, showing good cash flow management. However, free cash flow has declined by 29.37% compared to the previous period, signaling potential cash flow challenges.

Breakdown	Sep 2024	Sep 2023	Sep 2022	Sep 2021	Sep 2020
Income Statement
Total Revenue	2.81B	2.83B	2.69B	2.46B	2.56B
Gross Profit	815.95M	855.07M	777.33M	690.94M	748.01M
EBITDA	299.37M	362.01M	326.60M	229.54M	286.88M
Net Income	20.97M	213.16M	141.68M	74.27M	111.65M
Balance Sheet
Total Assets	2.93B	3.16B	3.13B	3.11B	0.00
Cash, Cash Equivalents and Short-Term Investments	31.01M	36.05M	23.74M	41.11M	0.00
Total Debt	1.38B	1.69B	182.18M	181.58M	0.00
Total Liabilities	2.03B	2.28B	797.20M	776.40M	0.00
Stockholders Equity	903.05M	877.36M	2.34B	2.33B	0.00
Cash Flow
Free Cash Flow	392.88M	179.11M	156.40M	154.20M	173.22M
Operating Cash Flow	471.79M	256.98M	232.85M	244.34M	231.29M
Investing Cash Flow	-73.64M	-14.75M	-86.13M	-103.16M	-43.37M
Financing Cash Flow	-402.98M	-230.27M	-162.54M	-125.51M	-175.13M

Vestis Corporation Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 6.06
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For VSTS, the sentiment is Negative. The current price of 6.06 is below the 20-day moving average (MA) of 6.17, below the 50-day MA of 6.09, and below the 200-day MA of 11.04, indicating a bearish trend. The MACD of 0.02 indicates Negative momentum. The RSI at 46.10 is Neutral, neither overbought nor oversold. The STOCH value of 36.20 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for VSTS.

Vestis Corporation Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
MGRC	82 Outperform	$3.07B	12.15	23.85%	1.54%	8.78%	117.40%
CTOS	67 Neutral	$1.40B	―	-4.37%	―	6.21%	-177.57%
HRI	66 Neutral	$3.88B	135.40	1.41%	2.38%	11.41%	-92.67%
Sector *	65 Neutral	$10.84B	16.29	5.52%	2.09%	3.14%	-29.96%
VSTS	62 Neutral	$798.60M	122.82	-2.73%	2.31%	-4.11%	-115.02%
WSC	60 Neutral	$5.35B	325.75	9.82%	0.48%	-2.34%	-37.24%
ALTG	60 Neutral	$257.56M	―	-73.72%	3.06%	-2.09%	-977.36%

Vestis Corporation Corporate Events

Vestis Appoints John Laveck as Chief Accounting Officer

On May 14, 2025, Vestis Corporation announced the appointment of John Laveck as Vice President and Chief Accounting Officer, effective June 2, 2025. Mr. Laveck, a seasoned accounting professional with experience at Smurfit Westrock, WestRock Corporation, and General Electric, will oversee the company’s accounting operations. His compensation package includes a base salary, bonus eligibility, equity awards, and standard company benefits, reflecting the company’s commitment to attracting experienced leadership.

The most recent analyst rating on (VSTS) stock is a Hold with a $13.00 price target. To see the full list of analyst forecasts on Vestis Corporation stock, see the VSTS Stock Forecast page.

Vestis Corporation Appoints Jim Barber as New CEO

On May 5, 2025, Vestis Corporation announced the appointment of Jim Barber as President and CEO, effective June 2, 2025. Barber, who retired from UPS in 2020 after a 35-year career, will also join the company’s Board of Directors. His compensation package includes a base salary of $950,000, a target annual bonus of 125% of his salary, and equity awards under the company’s Long-Term Incentive Plan. The agreement outlines various terms for termination and benefits, including specific conditions related to a Change of Control.

Vestis Corporation’s EVP Angie Kervin Resigns

On May 8, 2025, Angie Kervin, Executive Vice President and Chief Human Resources Officer of Vestis Corporation, announced her resignation effective May 16, 2025. Her departure was a personal decision to pursue another opportunity and not due to any disagreements with the company.

Vestis Corporation Amends Agreement with Corvex Management

On May 5, 2025, Vestis Corporation and Corvex Management LP amended their Letter Agreement to increase Corvex’s beneficial ownership limit in Vestis from 15% to 20% and economic exposure limit from 17% to 20% during the standstill period. This amendment remains effective as long as Keith A. Meister serves on Vestis’s Board of Directors, potentially impacting the company’s shareholder structure and governance dynamics.

Vestis Corporation Amends Credit Agreement for Flexibility

On May 1, 2025, Vestis Corporation amended its Credit Agreement to increase financial flexibility by adjusting the net leverage covenant ratio and restricting dividends and share repurchases until fiscal 2027 or until certain financial conditions are met. The company reported a second-quarter 2025 revenue of $665 million, with an operating loss of $9 million and a net loss of $28 million, while also announcing a leadership transition with Jim Barber appointed as the new CEO effective June 2, 2025.