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ARAMARK Holdings
(NYSE:ARMK)
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Rating:62Neutral
Price Target:
$59.00
▲(3.18% Upside)
Action:Reiterated
Date:08/11/26
ARMK’s score is driven primarily by improving operating performance and strong recent cash generation, supported by upbeat guidance and strong momentum indicators from the latest earnings call (raised revenue outlook, expected margin expansion, and Nexus growth potential). Offsetting these positives are balance-sheet leverage and thin net margins, while valuation is relatively expensive (P/E ~41) and near-term technical signals are mixed.
Positive Factors
Strong cash generation
Sustained operating cash flow (~$911M TTM) and a sharply expanded free cash flow (~$791M TTM) provide durable internal funding for capex, working capital and debt reduction. This cash base supports reinvestment into growth initiatives and gradual deleveraging without relying solely on external financing.
Negative Factors
Elevated leverage
Leverage near ~2.0x debt-to-equity constrains financial flexibility and increases sensitivity to cyclical slowdowns or cost shocks. Interest and principal burdens limit capital allocation choices; meaningful deleveraging will require sustained FCF above current levels or asset sales, reducing optionality in stressed conditions.
Read all positive and negative factors
Positive Factors
Negative Factors
Strong cash generation
Sustained operating cash flow (~$911M TTM) and a sharply expanded free cash flow (~$791M TTM) provide durable internal funding for capex, working capital and debt reduction. This cash base supports reinvestment into growth initiatives and gradual deleveraging without relying solely on external financing.
Read all positive factors
ARAMARK Holdings Key Performance Indicators (KPIs)
Any
Operating Income by Segment
Shows each segment’s profit after day-to-day operating costs, highlighting where the company actually earns money versus where revenue may be offset by high costs. Differences in operating income expose margin strength or weakness from labor, supply costs, pricing, and scale — and point to which segments fund reinvestment or need efficiency fixes.
Shows each segment’s profit after day-to-day operating costs, highlighting where the company actually earns money versus where revenue may be offset by high costs. Differences in operating income expose margin strength or weakness from labor, supply costs, pricing, and scale — and point to which segments fund reinvestment or need efficiency fixes.
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The Fly
The FlyARAMARK Holdings (ARMK) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$16.29B
Dividend Yield0.79%
Average Volume (3M)2.43M
Price to Earnings (P/E)41.6
Beta (1Y)0.64
Revenue Growth11.02%
EPS Growth6.21%
CountryUS
Employees278,390
SectorIndustrials
Sector Strength72
IndustrySpecialty Business Services
Share Statistics
EPS (TTM)1.46
Shares Outstanding263,625,030
10 Day Avg. Volume2,634,929
30 Day Avg. Volume2,434,010
Financial Highlights & Ratios
PEG Ratio1.31
Price to Book (P/B)3.27
Price to Sales (P/S)0.56
P/FCF Ratio22.64
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$68.00Price Target Upside18.92% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering12
EPS Forecast (FY)2.27
Revenue Forecast (FY)$20.09B
ARAMARK Holdings Business Overview & Revenue Model
Company Description
Based in Philadelphia, Pennsylvania, Aramark, established in 1959, provides a comprehensive array of services encompassing food management, facility solutions, and uniform provision. The company serves a diverse global clientele, including educati...
How the Company Makes Money
Aramark primarily makes money by operating under long-term, outsourced service contracts in which it manages on-site programs for client locations. A major revenue stream is food services: Aramark sells meals and beverages in client venues (e.g., ...
ARAMARK Holdings Earnings Call Summary
Earnings Call Date:Aug 11, 2026
(Q3-2026)
| % Change Since: |
Next Earnings Date:Nov 17, 2026
Earnings Call Sentiment Positive
The call conveyed strong, broad-based operational and financial momentum: solid top-line organic growth (9% reported; ~11% adjusted for calendar shift), record client retention (~98%), substantial new business wins (+51% YoY YTD), international strength (+11% organic) and notable profitability gains (operating income +18%, AOI up 13%, adjusted EPS +~30%). Aramark Nexus emerged as a material growth and margin opportunity (early mobilizations, scope +40% on a hyperscaler site, $400M–$500M target revenue ramp into FY27–'28) but remains early, lumpy and dependent on client ramp schedules and external permitting/regulatory timing. Management also flagged modest near-term headwinds from calendar timing, mobilization costs, higher capex/working capital and competitive dynamics in Nexus. Overall, positives (revenue, bookings, retention, margin expansion, cash actions) meaningfully outweigh the execution and timing risks called out.Positive Updates
Strong Revenue Growth
Company organic revenue grew 9% to $5.0B in Q3; would have increased ~2 percentage points further (~11% YoY) if not for a calendar shift. Growth was broad-based across net new business and base business.
Negative Updates
Calendar Shift Headwind
A calendar shift reduced reported organic revenue growth by approximately 2 percentage points and reduced AOI by an estimated $20M; management stated results would have been materially stronger absent the timing effect.
Read all updates
Q3-2026 Updates
Positive
Negative
Strong Revenue Growth
Company organic revenue grew 9% to $5.0B in Q3; would have increased ~2 percentage points further (~11% YoY) if not for a calendar shift. Growth was broad-based across net new business and base business.
Read all positive updates
Company Guidance
Aramark raised its fiscal ’26 organic revenue outlook to +9%–10%, while reaffirming adjusted operating income (AOI) growth of +12%–17% and adjusted EPS growth of +20%–25%, and said it expects accelerated AOI growth and margin expansion in Q4 (Nexus to contribute roughly 1% of Q4 revenue). Management disclosed Nexus is expected to ramp to roughly $400M–$500M of revenue over fiscal ’27–’28 (first site ~ $150M) and to be accretive to company margins; Q3 results that underlie the guidance included organic revenue +9% to $5.0B (would have been ~2 pts higher absent a calendar shift), FSS U.S. organic +8% to $3.5B (>10% ex-shift), International organic +11% to $1.5B, operating income +18% to $216M, adjusted operating income +13% to $261M with AOI margins expanding ~20 bps (calendar shift reduced AOI by an estimated $20M; AOI would have grown ~21% with ~50 bps margin expansion ex-shift), GAAP EPS $0.36 and adjusted EPS $0.52 (+~30% y/y, ~45% ex-shift), net cash from operations +$41M, free cash flow +$42M, >$1.4B cash availability, $100M of term loans repaid post-quarter and a target to get leverage below 3.0x by year-end.ARAMARK Holdings Financial Statement Overview
Summary
Income Statement
68
Positive
Balance Sheet
52
Neutral
Cash Flow
72
Positive
| Breakdown | TTM | Sep 2025 | Sep 2024 | Sep 2023 | Sep 2022 | Sep 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 19.85B | 18.51B | 17.40B | 16.08B | 13.69B | 12.10B |
| Gross Profit | 1.31B | 1.07B | 1.43B | 1.31B | 1.07B | 1.09B |
| EBITDA | 1.38B | 1.25B | 1.19B | 1.44B | 830.05M | 831.55M |
| Net Income | 382.91M | 326.39M | 262.52M | 674.11M | 194.48M | -90.83M |
Balance Sheet | ||||||
| Total Assets | 13.97B | 13.30B | 12.67B | 16.87B | 15.08B | 14.38B |
| Cash, Cash Equivalents and Short-Term Investments | 499.43M | 639.10M | 714.83M | 2.04B | 329.45M | 532.59M |
| Total Debt | 6.47B | 5.72B | 5.57B | 6.94B | 7.79B | 7.83B |
| Total Liabilities | 10.58B | 10.14B | 9.63B | 13.15B | 12.04B | 11.64B |
| Stockholders Equity | 3.39B | 3.15B | 3.04B | 3.71B | 3.03B | 2.72B |
Cash Flow | ||||||
| Free Cash Flow | 467.89M | 454.46M | 299.09M | 305.02M | 329.74M | 249.26M |
| Operating Cash Flow | 910.81M | 921.03M | 726.51M | 766.43M | 694.50M | 657.08M |
| Investing Cash Flow | -544.11M | -722.42M | -415.86M | 208.91M | -831.29M | -634.39M |
| Financing Cash Flow | -350.40M | -234.63M | -1.56B | 653.65M | -37.69M | -2.01B |
ARAMARK Holdings Technical Analysis
Positive
57.18
Price Trends
56.55
Positive
51.75
Positive
45.14
Positive
Market Momentum
1.34
Negative
62.49
Neutral
85.41
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ARMK, the sentiment is Positive. The current price of 57.18 is below the 20-day moving average (MA) of 58.10, above the 50-day MA of 56.55, and above the 200-day MA of 45.14, indicating a bullish trend. The MACD of 1.34 indicates Negative momentum. The RSI at 62.49 is Neutral, neither overbought nor oversold. The STOCH value of 85.41 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for ARMK.
ARAMARK Holdings Risk Analysis
ARAMARK Holdings disclosed 32 risk factors in its most recent earnings report. ARAMARK Holdings reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
ARAMARK Holdings Peers Comparison
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
82 Outperform | $79.16B | 39.80 | 41.80% | 0.87% | 8.94% | 11.03% | |
72 Outperform | $2.97B | 24.96 | 7.08% | ― | 14.32% | 22.61% | |
67 Neutral | $2.80B | 18.18 | 8.94% | 2.38% | 6.53% | 107.41% | |
67 Neutral | $4.98B | 43.27 | 5.32% | 0.49% | 1.41% | -22.01% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
62 Neutral | $16.29B | 41.63 | 11.23% | 0.81% | 11.02% | 6.21% | |
57 Neutral | $11.81B | 24.61 | 5.82% | 2.18% | 2.92% | 43.13% |
* Industrials Sector Average
ARMK
ARAMARK Holdings
60.50
21.36
54.57%
ABM
ABM Industries
47.10
0.02
0.03%
CBZ
CBIZ
54.73
-9.19
-14.38%
CTAS
Cintas
199.45
-14.83
-6.92%
UNF
UniFirst
286.50
112.81
64.95%
RTO
Rentokil Initial
23.59
-0.28
-1.18%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.