Aramark logged a 0.91% change Friday, and is now trading at a price of $37.52 per share.
Aramark shares moved 5.52% over the last 52 weeks, with a high of $45.59 and a low of $28.5. During this time, the stock outperformed the S&P 500 index by 9.22%. As of January 2022, the company's 50-day average price is $42.0. Aramark provides uniform food, facilities, and services to education, health, business and industrial, sports, recreation, and correctional clients in the United States and internationally. The mid-cap Industrials company is based in Philadelphia, PA. Aramark has returned a 1.19% dividend yield over the last 12 months.
Snapshot of the Company's Weak Operating Margins:
| 2019-09-30 | 2020-09-30 | 2021-09-30 | 2022-09-30 | |
|---|---|---|---|---|
| Revenue (MM) | $16,026 | $12,438 | $11,818 | $15,942 |
| Revenue Growth | n/a | -22.39% | -4.98% | 34.89% |
| Gross Margins | 4.3% | -2.37% | 2.16% | 3.98% |
| Gross Margins Growth | n/a | -155.12% | 191.14% | 84.26% |
| Operating Margins | 5.56% | -2.13% | 1.62% | 3.94% |
| Operating Margins Growth | n/a | -138.31% | 176.06% | 143.21% |
| Earnings Per Share | $1.81 | -$1.82 | -$0.35 | $0.75 |
| EPS Growth | n/a | -200.55% | 80.77% | 314.29% |
| Diluted Shares (MM) | 248 | 253 | 256 | 259 |
| Free Cash Flow (MM) | $481 | -$242 | $249 | $306 |
| FCF Growth | n/a | -150.26% | 203.07% | 22.8% |
| Capital Expenditures (MM) | $503 | $419 | $408 | $388 |
| Net Debt / EBITDA | 6.27 | -62.96 | 16.39 | 9.26 |
Aramark Is Too Expensive at Current Levels:
Compared to the Industrials sector's average of 20.49, Aramark has a trailing twelve month P/E ratio of 43.13 and, according to its EPS guidance of 2.44, an expected P/E ratio of 15.38.
However, Aramark is likely undervalued in terms of its equity because its P/B ratio is 3.643 compared to its sector average of 3.78. The company's shares are currently trading 209.83% above their fair value as expressed by Benjamin Graham's formula:
√(22.5 * 5-year average EPS * book value per share) = √(22.5 * 0.54 * 12.07) = $12.11
13 analysts are following Aramark and have set target prices ranging from $36.0 to $55.0 per share. On average, they have given the company a rating of buy. At the current price of $37.52, ARMK is trading -15.89% away from its average analyst target price of $44.61 per share, implying an analyst consensus of some upside potential for the stock.
