Aramark (NYSE:ARMK) - Share price, News & Analysis

ARMK fundamental analysis
Snowflake Score
Valuation	1/6
Future Growth	3/6
Past Performance	1/6
Financial Health	1/6
Dividends	1/6

ARMK Stock Overview

Aramark provides food, facilities, and uniform services to education, healthcare, business and industry, sports, leisure, and corrections clients in the United States and internationally.

Rewards

Trading at 11.2% below our estimate of its fair value

Earnings are forecast to grow 30.79% per year

Became profitable this year

Risk Analysis

Interest payments are not well covered by earnings

Large one-off items impacting financial results

Aramark Competitors

Amazon.com

NasdaqGS:AMZN

US$1.2t

Walmart

NYSE:WMT

US$407.5b

Accenture

NYSE:ACN

US$181.6b

Cintas

NasdaqGS:CTAS

US$38.5b

Price History & Performance

Summary of all time highs, changes and price drops for Aramark
Historical stock prices
Current Share Price	US$33.64
52 Week High	US$39.95
52 Week Low	US$31.22
Beta	1.78
1 Month Change	-9.13%
3 Month Change	-6.50%
1 Year Change	-13.96%
3 Year Change	6.32%
5 Year Change	-8.09%
Change since IPO	48.19%

Shareholder Returns

	ARMK	US Hospitality	US Market
7D	-6.1%	-5.3%	-2.5%
1Y	-14.0%	-22.2%	-10.4%

Return vs Industry: ARMK exceeded the US Hospitality industry which returned -22.2% over the past year.

Return vs Market: ARMK underperformed the US Market which returned -10.4% over the past year.

Price Volatility

Is ARMK's price volatile compared to industry and market?
ARMK volatility
ARMK Average Weekly Movement	5.3%
Hospitality Industry Average Movement	9.1%
Market Average Movement	7.8%
10% most volatile stocks in US Market	16.7%
10% least volatile stocks in US Market	2.8%

Stable Share Price: ARMK is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 5% a week.

Volatility Over Time: ARMK's weekly volatility (5%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1959	248,300	John Zillmer	https://www.aramark.com

Aramark provides food, facilities, and uniform services to education, healthcare, business and industry, sports, leisure, and corrections clients in the United States and internationally. It operates through three segments: Food and Support Services United States, Food and Support Services International, and Uniform and Career Apparel. The company offers food-related managed services, including dining, catering, food service management, and convenience-oriented retail services; non-clinical support services, such as patient food and nutrition, retail food, and procurement services; and plant operations and maintenance, custodial/housekeeping, energy management, grounds keeping, and capital project management services.

Aramark Fundamentals Summary

How do Aramark's earnings and revenue compare to its market cap?
ARMK fundamental statistics
Market Cap	US$8.66b
Earnings (TTM)	US$146.35m
Revenue (TTM)	US$14.34b

59.1x

P/E Ratio

0.6x

P/S Ratio

Is ARMK overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
ARMK income statement (TTM)
Revenue	US$14.34b
Cost of Revenue	US$12.39b
Gross Profit	US$1.95b
Other Expenses	US$1.80b
Earnings	US$146.35m

Last Reported Earnings

Apr 01, 2022

Next Earnings Date

n/a

Earnings per share (EPS)	0.57
Gross Margin	13.60%
Net Profit Margin	1.02%
Debt/Equity Ratio	262.7%

How did ARMK perform over the long term?

See historical performance and comparison

Dividends

1.3%

Current Dividend Yield

77%

Payout Ratio

Does ARMK pay a reliable dividends?

See ARMK dividend history and benchmarks

When do you need to buy ARMK by to receive an upcoming dividend?
Aramark dividend dates
Ex Dividend Date	May 17 2022
Dividend Pay Date	Jun 01 2022
Days until Ex dividend	0 days
Days until Dividend pay date	15 days

Does ARMK pay a reliable dividends?

See ARMK dividend history and benchmarks

Valuation

Is Aramark undervalued compared to its fair value and its price relative to the market?

Valuation Score

1/6

Valuation Score 1/6

Below Fair Value
Significantly Below Fair Value
PE vs Industry
PE vs Market
PEG Ratio
PB vs Industry

11.2%

Undervalued compared to fair value

Share Price vs. Fair Value

Below Fair Value: ARMK ($33.64) is trading below our estimate of fair value ($37.89)

Significantly Below Fair Value: ARMK is trading below fair value, but not by a significant amount.

Price To Earnings Ratio

PE vs Industry: ARMK is poor value based on its PE Ratio (59.1x) compared to the US Hospitality industry average (17.7x).

PE vs Market: ARMK is poor value based on its PE Ratio (59.1x) compared to the US market (15.5x).

Price to Earnings Growth Ratio

PEG Ratio: ARMK is poor value based on its PEG Ratio (1.9x)

Price to Book Ratio

PB vs Industry: ARMK is overvalued based on its PB Ratio (3x) compared to the US Hospitality industry average (2.6x).

Future Growth

How is Aramark forecast to perform in the next 1 to 3 years based on estimates from 16 analysts?

Future Growth Score

3/6

Future Growth Score 3/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

30.8%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: ARMK's forecast earnings growth (30.8% per year) is above the savings rate (1.9%).

Earnings vs Market: ARMK's earnings (30.8% per year) are forecast to grow faster than the US market (12.6% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: ARMK's revenue (6.8% per year) is forecast to grow slower than the US market (8% per year).

High Growth Revenue: ARMK's revenue (6.8% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: ARMK's Return on Equity is forecast to be low in 3 years time (17%).

Past Performance

How has Aramark performed over the past 5 years?

Past Performance Score

1/6

Past Performance Score 1/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

-45.3%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: ARMK has a large one-off gain of $33.6M impacting its April 1 2022 financial results.

Growing Profit Margin: ARMK became profitable in the past.

Past Earnings Growth Analysis

Earnings Trend: ARMK's earnings have declined by 45.3% per year over the past 5 years.

Accelerating Growth: ARMK has become profitable in the last year, making the earnings growth rate difficult to compare to its 5-year average.

Earnings vs Industry: ARMK has become profitable in the last year, making it difficult to compare its past year earnings growth to the Hospitality industry (86.7%).

Return on Equity

High ROE: ARMK's Return on Equity (5%) is considered low.

Financial Health

How is Aramark's financial position?

Financial Health Score

1/6

Financial Health Score 1/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: ARMK's short term assets ($3.1B) exceed its short term liabilities ($2.7B).

Long Term Liabilities: ARMK's short term assets ($3.1B) do not cover its long term liabilities ($9.0B).

Debt to Equity History and Analysis

Debt Level: ARMK's net debt to equity ratio (248%) is considered high.

Reducing Debt: ARMK's debt to equity ratio has increased from 232.8% to 262.7% over the past 5 years.

Debt Coverage: ARMK's debt is not well covered by operating cash flow (4%).

Interest Coverage: ARMK's interest payments on its debt are not well covered by EBIT (1.4x coverage).

Balance Sheet

Dividend

What is Aramark current dividend yield, its reliability and sustainability?

Dividend Score

2/6

Dividend Score 2/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Future Dividend Coverage

1.31%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: ARMK's dividend (1.31%) isn’t notable compared to the bottom 25% of dividend payers in the US market (1.54%).

High Dividend: ARMK's dividend (1.31%) is low compared to the top 25% of dividend payers in the US market (4.05%).

Stability and Growth of Payments

Stable Dividend: Whilst dividend payments have been stable, ARMK has been paying a dividend for less than 10 years.

Growing Dividend: ARMK's dividend payments have increased, but the company has only paid a dividend for 8 years.

Earnings Payout to Shareholders

Earnings Coverage: At its current payout ratio (77%), ARMK's payments are covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: ARMK is paying a dividend but the company has no free cash flows.

Next Steps

Explore strong dividend paying companies in the Consumer Services industry.

Management

How experienced are the management team and are they aligned to shareholders interests?

2.6yrs

Average management tenure

CEO

John Zillmer (66 yo)

2.58yrs

Tenure

US$5,051,719

Compensation

Mr. John J. Zillmer serves as an Industrial Advisor at CVC Capital Partners Limited. Mr. Zillmer served as an Advisor at CVC Capital Partners since 2014. He specializes in Chemical Distribution, Waste Mana...

CEO Compensation Analysis

Compensation vs Market: John's total compensation ($USD5.05M) is below average for companies of similar size in the US market ($USD8.23M).

Compensation vs Earnings: Insufficient data to compare John's compensation with company performance.

Leadership Team

Experienced Management: ARMK's management team is considered experienced (2.6 years average tenure).

Board Members

Experienced Board: ARMK's board of directors are not considered experienced ( 2.6 years average tenure), which suggests a new board.

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.

Data	Last Updated (UTC time)
Company Analysis	2022/05/15 00:00
End of Day Share Price	2022/05/13 00:00
Earnings	2022/04/01
Annual Earnings	2021/10/01