Aramark (ARMK): Assessing the Valuation Opportunity After Recent Share Price Decline

Aramark (ARMK) stock has been catching some interest as investors look for value after a challenging stretch. Shares have slid roughly 5% over the past month, which has prompted conversations about where the company could head next.

See our latest analysis for Aramark.

After a tough quarter, Aramark’s share price has been under pressure, falling 5.3% over the past month as investors reassess the company’s outlook amid shifting market sentiment. Even so, Aramark still boasts a solid three-year total shareholder return of 30%. However, recent momentum has clearly cooled for now.

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With Aramark’s current price sitting below analyst targets, but after a dip that has left some investors cautious, the key question now is whether the market is underestimating its future or if all growth is already reflected in the price.

Most Popular Narrative: 18.7% Undervalued

Compared to the last closing price of $36.68, the most prevalent narrative points toward a fair value of $45.10. This places Aramark’s stock well below that benchmark and captures attention from value-focused investors. The context for this gap comes from strong operational momentum and future earnings potential seen by the majority of analysts.

Accelerating wins of large, multi-year contracts, particularly in Sports & Entertainment, Education, and Healthcare, as organizations turn to outsourcing non-core services, point to sustained, above-trend future revenue growth and long-term contract expansion.

Read the complete narrative.

Want to know the growth engine behind this valuation? The narrative is built on bold revenue expansion, margin gains, and an aggressive earnings trajectory. Dig in to uncover which financial levers are expected to drive this surge and what analysts are really projecting for Aramark’s future.

Result: Fair Value of $45.10 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, persistent labor cost pressures and a shift toward remote work could compress margins or curb Aramark’s revenue growth more than analysts anticipate.

Find out about the key risks to this Aramark narrative.

Another View: Multiples Paint a Pricier Picture

Looking at valuation through the lens of the price-to-earnings ratio, Aramark appears less of a bargain. Its P/E stands at 29.5x, above the industry average of 20.7x and also above its fair ratio of 26.1x. This premium raises the question of whether investors are paying up for growth, or if there is a risk if momentum fades.

See what the numbers say about this price — find out in our valuation breakdown.

Build Your Own Aramark Narrative

If you want to follow your own instincts or dig into the numbers further, you can easily build your perspective from scratch in just a few minutes. Do it your way

A great starting point for your Aramark research is our analysis highlighting 3 key rewards and 1 important warning sign that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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