Vestis Corporation (VSTS) AI Stock Analysis

• Market Cap: $1.15B
• Dividend Yield: 1.61%
• Average Volume (3M): 2.07M
• Price to Earnings (P/E): 122.8
• Beta (1Y): 1.30
• Revenue Growth: -4.11%
• EPS Growth: -115.02%
• Country: US
• Employees: 19,600
• Sector: Industrials
• Sector Strength: 77
• Industry: Rental & Leasing Services
• EPS (TTM): -0.05
• Shares Outstanding: 131,745,120
• 10 Day Avg. Volume: 1,327,765
• 30 Day Avg. Volume: 2,065,015
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.00
• Price to Cash Flow (P/CF): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: 2.94
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: 4.13
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $7.33
• Price Target Upside: -15.84% Downside
• Rating Consensus: Hold
• Number of Analyst Covering: 4

Vestis Corporation's overall stock score of 57 reflects its stable financial performance and strong cash flow management. However, the stock faces headwinds due to weak technical indicators, negative valuation metrics, and mixed earnings guidance. The company’s increased leverage and low profitability margins are also significant risks to consider.

Positive Factors

Leadership

Phillip Holloman, who has served as chairman of Vestis’s board since 2023, brings extensive industry experience, including a 22-year tenure at Cintas Corporation.

Operational Improvements

Efficiency improvements taking hold, driving the better margins despite the deleveraging impact.

Negative Factors

Customer and Sales Challenges

The company continues to struggle with customer service and sales despite various efforts to improve these areas operationally.

Financial Performance

Revenue decreased 5.7%, to $665 million, below the consensus estimate of $690 million.

Guidance and Outlook

Management pulled the prior outlook for fiscal 2025 due to the evolving operating nature of the business and a more uncertain macroeconomic outlook.

Vestis Corporation Business Overview & Revenue Model

Company Description

Vestis Corporation provides uniform rentals and workplace supplies in the United States and Canada. Its products include uniform options, such as shirts, pants, outerwear, gowns, scrubs, high visibility garments, particulate-free garments, and flame-resistant garments, as well as shoes and accessories; and workplace supplies, including managed restroom supply services, first-aid supplies and safety products, floor mats, towels, and linens. The company serves manufacturing, hospitality, retail, food processing, food service, pharmaceuticals, healthcare, automotive, and cleanroom industries. Vestis Corporation was founded in 1936 and is headquartered in Roswell, Georgia.

How the Company Makes Money

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Vestis Corporation Financial Statement Overview

Summary

Vestis Corporation shows stable financial performance with moderate gross profit margin and low net profit margin. Revenue growth is inconsistent, but reasonable EBIT and EBITDA margins are maintained. Operational efficiency is evident, yet profitability is limited. Increased leverage poses financial risk.

Income Statement

Vestis Corporation shows a stable financial performance with a moderate gross profit margin and a low net profit margin in the TTM. Revenue growth has been inconsistent, but the company maintains reasonable EBIT and EBITDA margins. Overall, the income statement reflects operational efficiency but limited profitability.

Balance Sheet

The company's balance sheet indicates a moderate level of leverage, with a debt-to-equity ratio that has increased over time, suggesting higher financial risk. The return on equity is low due to reduced net income. However, the equity ratio remains strong, indicating a substantial portion of assets funded by equity. The balance sheet is stable but reveals potential risks from increased debt.

Cash Flow

Vestis Corporation has shown strong cash flow management with a healthy operating cash flow to net income ratio, indicating efficient conversion of revenue into cash. The free cash flow growth is robust, providing financial flexibility. The company efficiently covers its net income through operating and free cash flows, signaling solid cash flow health.

Breakdown
Sep 2024	Sep 2023	Sep 2022	Sep 2021	Sep 2020
Income Statement		Total Revenue
2.81B	2.83B	2.69B	2.46B	2.56B
	Gross Profit
815.95M	855.07M	777.33M	690.94M	748.01M
	EBIT
157.95M	217.91M	192.24M	96.24M	149.72M
	EBITDA
299.37M	362.01M	326.60M	229.54M	286.88M
	Net Income Common Stockholders
20.97M	213.16M	141.68M	74.27M	111.65M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
31.01M	36.05M	23.74M	41.11M	0.00
	Total Assets
2.93B	3.16B	3.13B	3.11B	0.00
	Total Debt
1.38B	1.69B	182.18M	181.58M	0.00
	Net Debt
1.35B	1.65B	158.44M	140.47M	0.00
	Total Liabilities
2.03B	2.28B	797.20M	776.40M	0.00
	Stockholders Equity
903.05M	877.36M	2.34B	2.33B	0.00
Cash Flow		Free Cash Flow
392.88M	179.11M	156.40M	154.20M	173.22M
	Operating Cash Flow
471.79M	256.98M	232.85M	244.34M	231.29M
	Investing Cash Flow
-73.64M	-14.75M	-86.13M	-103.16M	-43.37M
	Financing Cash Flow
-402.98M	-230.27M	-162.54M	-125.51M	-175.13M

Vestis Corporation Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 8.71
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Positive
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For VSTS, the sentiment is Negative. The current price of 8.71 is above the 20-day moving average (MA) of 8.21, below the 50-day MA of 9.53, and below the 200-day MA of 13.28, indicating a bearish trend. The MACD of -0.46 indicates Positive momentum. The RSI at 22.48 is Positive, neither overbought nor oversold. The STOCH value of 47.16 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for VSTS.

Vestis Corporation Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
DXPE	80 Outperform	$1.44B	21.62	17.54%	―	7.35%	9.35%
Sector *	64 Neutral	$4.25B	11.69	5.23%	249.83%	4.04%	-9.46%
XMTR	63 Neutral	$1.55B	―	-15.50%	―	19.35%	27.83%
DSGR	58 Neutral	$1.12B	1,501.24	0.18%	―	13.91%	―
VSTS	57 Neutral	$1.15B	122.82	-2.73%	1.61%	-4.11%	-115.02%
PLUG	45 Neutral	$805.85M	―	-90.88%	―	-29.45%	-10.79%
PCT	38 Underperform	$1.18B	―	-96.27%	―	―	-180.10%

Vestis Corporation Corporate Events

Vestis Corporation Amends Agreement with Corvex Management

On May 5, 2025, Vestis Corporation and Corvex Management LP amended their Letter Agreement to increase Corvex’s beneficial ownership limit in Vestis from 15% to 20% and economic exposure limit from 17% to 20% during the standstill period. This amendment remains effective as long as Keith A. Meister serves on Vestis’s Board of Directors, potentially impacting the company’s shareholder structure and governance dynamics.

Spark’s Take on VSTS Stock

According to Spark, TipRanks’ AI Analyst, VSTS is a Neutral.

Vestis Corporation’s stock score reflects a stable operational performance with strong cash flow management but is hindered by inconsistent revenue growth and increased financial leverage. Technical analysis indicates bearish momentum, while high valuation multiples suggest potential overvaluation. Despite positive prospects from earnings call initiatives, revenue and margin pressures remain.

To see Spark’s full report on VSTS stock, click here.

Vestis Corporation Amends Credit Agreement for Flexibility

On May 1, 2025, Vestis Corporation amended its Credit Agreement to increase financial flexibility by adjusting the net leverage covenant ratio and restricting dividends and share repurchases until fiscal 2027 or until certain financial conditions are met. The company reported a second-quarter 2025 revenue of $665 million, with an operating loss of $9 million and a net loss of $28 million, while also announcing a leadership transition with Jim Barber appointed as the new CEO effective June 2, 2025.

Spark’s Take on VSTS Stock

According to Spark, TipRanks’ AI Analyst, VSTS is a Neutral.

Vestis Corporation’s stock score reflects a stable operational performance with strong cash flow management but is hindered by inconsistent revenue growth and increased financial leverage. Technical analysis indicates bearish momentum, while high valuation multiples suggest potential overvaluation. Despite positive prospects from earnings call initiatives, revenue and margin pressures remain.

To see Spark’s full report on VSTS stock, click here.

Vestis Corporation Appoints Phillip Holloman as Interim CEO

On March 18, 2025, Vestis Corporation announced that Kim Scott, its President and CEO, has left her roles and resigned from the Board of Directors. There was no disagreement between Ms. Scott and the company regarding its operations or policies. Phillip Holloman, who has been the Chairman of the Board since September 2023, has been appointed as the interim Executive Chairman, President, and CEO. Mr. Holloman, a retired executive from Cintas Corporation, brings extensive experience to his new role and will receive a monthly cash compensation and restricted stock units. His appointment is expected to provide stability and continuity for Vestis during this transition period.

Vestis Corporation Announces CAO Resignation and Replacement

On February 26, 2025, Bryan Johnson announced his resignation as Chief Accounting Officer of Vestis Corporation, effective March 10, 2025. His departure is not due to any disagreements with the company. Kelly Janzen, the Executive Vice President and Chief Financial Officer, will take on the additional role of principal accounting officer.