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1. Company Snapshot

1.a. Company Description

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.


It also provides on-site restaurants, catering, convenience stores, and executive dining services; beverage and vending services; and facility management services comprising landscaping, transportation, payment, and other facility consulting services relating to building operations.In addition, the company offers concessions, banquet, and catering services; retail services and merchandise sale, recreational, and lodging services; and facility management services at sports, entertainment, and recreational facilities.Further, the company offers correctional food; and operates commissaries, laundry facilities, and property rooms.


Additionally, it provides design, sourcing and manufacturing, delivery, cleaning, maintenance, and marketing services for uniforms and accessories; provides managed restroom services; and rents uniforms, work clothing, outerwear, particulate-free garments, and non-garment items and related services that include mats, shop towels, and first aid supplies.The company was formerly known as ARAMARK Holdings Corporation and changed its name to Aramark in May 2014.Aramark was founded in 1959 and is based in Philadelphia, Pennsylvania.

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1.b. Last Insights on ARMK

Aramark's recent performance was positively driven by strong Q1 2026 earnings, with quarterly earnings of $0.51 per share beating the Zacks Consensus Estimate of $0.5 per share. The company's revenue growth momentum continued, with significant new business wins, including in the healthcare sector. Aramark's CEO highlighted "extraordinary client retention" and growth opportunities ahead. The company was also recognized on Fortune's 2026 list of World's Most Admired Companies, ranking No. 4 in the Diversified Outsourcing Services category. Analysts have a "Moderate Buy" consensus rating on the stock, with five issuing a buy recommendation.

1.c. Company Highlights

2. Aramark's Q1 Fiscal 2026 Earnings: A Strong Start

Aramark's Q1 fiscal 2026 earnings report highlighted a robust financial performance, with organic revenue growing 5% to $4.8 billion. Excluding the calendar shift, revenue would have increased approximately 8%. The company's adjusted operating income was $263 million, up 1% on a constant currency basis. Aramark's GAAP EPS was $0.36, while adjusted EPS was $0.51, beating analyst estimates of $0.5. The company's adjusted operating margin was impacted by $25 million in costs associated with the 53rd week, which will unwind in the second quarter.

Publication Date: Feb -17

📋 Highlights
  • Strong Organic Revenue Growth:: Organic revenue rose 5% to $4.8 billion, with calendar adjustments implying an 8% increase.
  • International Revenue Surge:: International revenue hit $1.5 billion, up 13% YoY, with growth from all regions.
  • AI-Driven Supply Chain Efficiency:: Contracted spend exceeded $20 billion, leveraging AI for operational efficiencies and insights.
  • Operating Income Resilience:: Adjusted operating income rose 1% to $263 million, with $25 million calendar shift drag offset by 11% growth potential.
  • Full-Year Guidance Confidence:: Maintains 7-9% organic revenue growth, 12-17% AOI growth, and 20-25% adjusted EPS growth, supported by retention and new client wins.

Revenue Growth and Segment Performance

The revenue growth was broad-based, with strong net new business performance in FSS US and International. The Sports and Entertainment business had outstanding performance, with significant opportunities in collegiate athletics. The Business and Industry segment's refreshment component is outpacing other areas, with double-digit growth for 17 quarters. Aramark's international revenue reached $1.5 billion, up 13% year over year, with every country contributing to growth.

Operational Efficiencies and AI-Driven Technology

Aramark's global supply chain performed well, with contracted spend exceeding $20 billion. The company's AI-driven technology differentiated its supply chain capabilities, delivering efficiencies and insights. The use of AI is already having a significant impact on supply chain productivity and back-office efficiency, with no significant capital investment required.

Outlook and Guidance

Aramark expects revenue growth to continue, with the second quarter benefiting from new business onboarding and rollouts. The company anticipates AOI to benefit from supply chain efficiencies, cost discipline, and higher revenue. Full-year guidance remains unchanged, with organic revenue growth expected at 7-9%, AOI increasing 12-17%, and adjusted EPS growth of 20-25%. Analysts estimate next year's revenue growth at 6.1%.

Valuation and Metrics

Aramark's current valuation metrics include a P/E Ratio of 32.36, P/B Ratio of 3.2, and P/S Ratio of 0.55. The company's EV/EBITDA is 8.01, and its ROIC is 5.8%. With a strong start to the fiscal year, Aramark is confident in achieving its financial targets and delivering exceptional performance. The company's leverage ratio is expected to remain below three times, indicating a healthy balance sheet.

3. NewsRoom

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Channing Capital Management LLC Has $9.24 Million Stock Position in Aramark $ARMK

Feb -22

Source: defenseworld.net

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George Soros Reduces Stake in Smurfit WestRock PLC by 68.99%

Feb -16

Source: gurufocus.com

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Aramark (NYSE:ARMK) Given Consensus Rating of “Moderate Buy” by Analysts

Feb -13

Source: defenseworld.net

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Able View Global (NASDAQ:ABLV) & Aramark (NYSE:ARMK) Head to Head Comparison

Feb -12

Source: defenseworld.net

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Aramark (ARMK) Q1 2026 Earnings Call Transcript

Feb -10

Source: seekingalpha.com

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Here's What Key Metrics Tell Us About Aramark (ARMK) Q1 Earnings

Feb -10

Source: zacks.com

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Aramark (ARMK) Surpasses Q1 Earnings and Revenue Estimates

Feb -10

Source: zacks.com

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Aramark Reports First Quarter Earnings

Feb -10

Source: businesswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (2.15%)

6. Segments

Food and Support Services United States

Expected Growth: 2.5%

Aramark's Food and Support Services in the United States is driven by a 2.5% growth rate, fueled by increasing demand for outsourcing non-core services, a growing need for hospitality and facilities management in education, healthcare, and business sectors, and a focus on sustainability and wellness in food services.

Food and Support Services International

Expected Growth: 1.8%

Aramark's Food and Support Services International segment growth of 1.8% is driven by increasing demand for outsourcing services in education, healthcare, and business sectors. Additionally, strategic acquisitions, expansion into new markets, and a focus on innovative and sustainable food services also contribute to growth.

Uniform

Expected Growth: 1.2%

Aramark's Uniform segment growth of 1.2% is driven by increasing demand for customized uniforms, expansion into new markets, and strategic partnerships. Additionally, investments in digital platforms and supply chain optimization are enhancing operational efficiency, leading to cost savings and improved customer satisfaction.

7. Detailed Products

Food Services

Aramark provides food services to various industries such as education, healthcare, sports, and entertainment.

Facilities Management

Aramark offers facilities management services, including maintenance, repairs, and operations management.

Uniform Services

Aramark provides uniform rental and facility services to businesses in various industries.

Refreshment Services

Aramark offers vending, coffee, and water services to businesses and institutions.

Correctional Services

Aramark provides food and facilities management services to correctional facilities.

8. Aramark's Porter Forces

Forces Ranking

Threat Of Substitutes

Aramark's food and facilities services can be substituted with in-house services or other external providers, but the switching costs and complexity of services limit the threat of substitutes.

Bargaining Power Of Customers

Aramark's customers, including universities, hospitals, and sports venues, have significant bargaining power due to their large scale and ability to negotiate contracts.

Bargaining Power Of Suppliers

Aramark's suppliers, including food and facilities providers, have limited bargaining power due to the company's large scale and diversified supply chain.

Threat Of New Entrants

The threat of new entrants is low due to the high barriers to entry, including significant capital requirements and regulatory hurdles, in the food and facilities services industry.

Intensity Of Rivalry

The intensity of rivalry in the food and facilities services industry is moderate, with several large players competing for market share, but Aramark's diversified services and strong brand reputation help to mitigate the competitive pressure.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 69.91%
Debt Cost 6.44%
Equity Weight 30.09%
Equity Cost 11.56%
WACC 7.98%
Leverage 232.35%

11. Quality Control: Aramark passed 2 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Brady

A-Score: 6.1/10

Value: 3.9

Growth: 6.2

Quality: 7.6

Yield: 3.0

Momentum: 7.0

Volatility: 9.0

1-Year Total Return ->

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FTAI Aviation

A-Score: 5.5/10

Value: 3.0

Growth: 4.7

Quality: 6.9

Yield: 6.0

Momentum: 6.0

Volatility: 6.7

1-Year Total Return ->

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ABM Industries

A-Score: 5.1/10

Value: 6.1

Growth: 5.7

Quality: 5.4

Yield: 4.0

Momentum: 1.5

Volatility: 7.7

1-Year Total Return ->

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Stock-Card
Aramark

A-Score: 4.9/10

Value: 4.6

Growth: 5.9

Quality: 3.4

Yield: 2.0

Momentum: 5.0

Volatility: 8.3

1-Year Total Return ->

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Stock-Card
UniFirst

A-Score: 4.6/10

Value: 5.7

Growth: 5.2

Quality: 6.2

Yield: 1.0

Momentum: 2.5

Volatility: 7.0

1-Year Total Return ->

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Stock-Card
CBIZ

A-Score: 3.8/10

Value: 4.9

Growth: 5.2

Quality: 5.6

Yield: 0.0

Momentum: 1.0

Volatility: 6.0

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

40.92$

Current Price

40.92$

Potential

-0.00%

Expected Cash-Flows