Vestis Corporation (VSTS) AI Stock Analysis

Vestis Corporation

(BMV:VSTS)

Rating:―N/A

Action:N/A

Date:―

No summary available

Positive Factors

Recurring service modelRecurring rental, laundering, repair, replacement, and delivery services create ongoing customer relationships rather than relying solely on one-time apparel sales. Once a workplace program is established, the scheduled route model can support revenue visibility and retention over the next several quarters.

Negative Factors

Revenue and margin deteriorationThe sharp revenue decline and compressed gross margin show that recent earnings power has weakened materially. Even with positive operating profit, the slight net loss indicates limited current profitability and leaves less room to absorb further volume, pricing, or mix pressure.

Vestis Corporation (VSTS) vs. SPDR S&P 500 ETF (SPY)

Market Cap: MXN 1.96B
Dividend Yield: ―
Average Volume (3M): ―
Price to Earnings (P/E): -340.1
Beta (1Y): -0.23
Revenue Growth: -9.23%
EPS Growth: 81.35%
Country: Mexico
Employees: 18,150
Sector: Industrials
Sector Strength: 63
Industry: Rental & Leasing Services

Vestis Corporation Business Overview & Revenue Model

Company Description

Founded in Roswell, Georgia, in 1936, Vestis Corporation specializes in offering uniform rental and various workplace supply services across both the United States and Canada. The company's product line includes a wide array of uniform choices, from...

Vestis Corporation Earnings Call Summary

Earnings Call Date:Aug 10, 2026(Q3-2026)|% Change Since:-2.68%|Next Earnings Date:Dec 01, 2026

Earnings Call SentimentPositive

The call conveyed marked operational and financial progress: material adjusted EBITDA growth, margin expansion, positive net income and stronger cash generation leading to an upward revision of free cash flow guidance. Improvements in pricing execution, product mix, plant productivity and cost control underpin these gains. However, management acknowledged notable challenges — a meaningful performance gap across market centers (quadrant underperformance), intentional volume exits that weighed on revenue, elevated net debt and ongoing transformation costs. The tone is constructive and management provided concrete initiatives (outsourcing savings, targeted CapEx, MDR ramp, quadrant remediation) to convert improvements into sustainable growth. On balance, the positive financial momentum and raised guidance appear to outweigh the remaining execution and network risks, contingent on management delivering the planned quadrant upgrades and field recovery.

Positive Updates

Adjusted EBITDA Growth and Margin Expansion

Adjusted EBITDA for Q3 was $80.9M, up roughly $15M or ~23% year-over-year (covenant adjusted). Adjusted EBITDA margin expanded to 12.2% from ~9.8% a year ago (≈+240 bps). Implied Q4 adjusted EBITDA range is $84M–$89M.

Negative Updates

Top-Line Slight Decline and Volume Contraction

Total Q3 revenue was ~$662M, down about $12M or ~1.8% year-over-year (or down ~0.3% excluding a $10M lower one-time 'loss in ruin' revenue impact). Pounds processed fell ~4.5% (≈22M lbs), reflecting intentional exits but contributing to near-term top-line pressure.

Company Guidance

Vestis raised full‑year fiscal 2026 free cash flow guidance to $160–170M (midpoint $165M) from $120–150M, assuming $60–70M of cash capex and $35–40M of cash-paid transformation costs, and reiterated revenue will be flat to down ~2% vs. normalized FY2025 while raising adjusted EBITDA guidance to $310–315M (midpoint $312.5M), implying Q4 adjusted EBITDA of $84–89M. Third‑quarter results that underpin the guidance included revenue of ~$662M (‑1.8% YoY), adjusted EBITDA $80.9M (12.2% margin), revenue per pound $1.42 (+$0.04 YoY, +$0.05 seq.), pounds processed down ~4.5% (~22M lbs), cost per pound flat at $1.24, cost of services down ~$15M YoY, SG&A down ~$7M (≈‑6%), and net income of $11M vs. a $0.7M loss LY. Cash flow/balance sheet metrics: Q3 operating cash flow $65M, free cash flow $47M (adjusted free cash flow $56M excluding ~$8.5M transformation cash spend), YTD transformation benefits ~$30M of an expected ~$50M (Q1 $5M, Q2 $10M, Q3 $15M, ~$20M remaining in Q4), an outsourcing initiative expected to save ~$10M annualized in FY2027 (some Q4 benefit), liquidity ~$352M (undrawn revolver $294M + cash $58M), net debt $1.2B, principal bank debt $1.1B, and no debt maturities until 2028; full‑year effective tax rate ~25% (Q4 ~30%).

Vestis Corporation Risk Analysis

Vestis Corporation disclosed 35 risk factors in its most recent earnings report. Vestis Corporation 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

Vestis Corporation Peers Comparison

Overall Rating

UnderperformOutperform

Sector (63)

Financial Indicators

MX:VSTS against its peers
Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
URI	75Outperform	$72.45B	25.82	31.01%	0.66%	9.45%	17.03%
SUNB	70Outperform	$34.27B	25.27	18.46%	1.26%	―	―
Sector *	63Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
EQPT	59Neutral	$4.36B	182.57	5.46%	―	18.16%	―
HRI	58Neutral	$5.55B	45.04	6.37%	1.69%	19.38%	―
WSC	52Neutral	$3.32B	-49.57	-7.45%	1.53%	-2.51%	-162.51%

* Industrials Sector Average

Performance Comparison

MX:VSTS and its peers over the selected period
Ticker	Company Name	Price	Change	% Change
MX:VSTS	Vestis Corporation	218.00	-57.00	-20.73%
WSC	Willscot Mobile Mini Holdings Corp.	18.34	-2.30	-11.13%
HRI	Herc Holdings Inc.	165.76	34.24	26.04%
URI	United Rentals	1170.05	324.20	38.33%
EQPT	EquipmentShare.com, Inc.	17.18	-15.38	-47.24%
SUNB	Sunbelt Rentals Holdings Inc	83.63	10.89	14.98%

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.

Vestis Corporation AI Stock Analysis