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Vestis Corporation (VSTS)
NYSE:VSTS
US Market

Vestis Corporation (VSTS) AI Stock Analysis

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Vestis Corporation

(NYSE:VSTS)

58Neutral
Vestis Corporation's stock score reflects stable operational performance and strong cash flow. However, increased leverage and high valuation pose risks. Technical indicators suggest bearish momentum, while earnings call offers a mixed outlook with growth potential but current challenges.
Positive Factors
Leadership Experience
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
Organic Revenue Growth
Organic revenue growth was -4.3%, down from -1.4% last quarter, and missed expectations by -1.4%.
Revenue Performance
Revenues fell short and pricing/customer loss headwinds will continue through F1H25.

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

Vestis Corporation Business Overview & Revenue Model

Company DescriptionVestis 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 Moneynull

Vestis Corporation Financial Statement Overview

Summary
Vestis Corporation demonstrates steady operational performance with strong cash flow management. Income statement shows moderate margins and inconsistent revenue growth, while the balance sheet indicates increased leverage posing potential risks.
Income Statement
72
Positive
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
65
Positive
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
78
Positive
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
TTMSep 2024Sep 2023Sep 2022Sep 2021Sep 2020
Income StatementTotal Revenue
2.77B2.81B2.83B2.69B2.46B2.56B
Gross Profit
1.25B815.95M855.07M777.33M690.94M748.01M
EBIT
140.75M157.95M217.91M192.24M96.24M149.72M
EBITDA
278.99M299.37M362.01M326.60M229.54M286.88M
Net Income Common Stockholders
9.54M20.97M213.16M141.68M74.27M111.65M
Balance SheetCash, Cash Equivalents and Short-Term Investments
18.56M31.01M36.05M23.74M41.11M0.00
Total Assets
2.90B2.93B3.16B3.13B3.11B0.00
Total Debt
233.51M1.38B1.69B182.18M181.58M0.00
Net Debt
214.95M1.35B1.65B158.44M140.47M0.00
Total Liabilities
2.00B2.03B2.28B797.20M776.40M0.00
Stockholders Equity
899.59M903.05M877.36M2.34B2.33B0.00
Cash FlowFree Cash Flow
362.11M392.88M179.11M156.40M154.20M173.22M
Operating Cash Flow
424.06M471.79M256.98M232.85M244.34M231.29M
Investing Cash Flow
-38.83M-73.64M-14.75M-86.13M-103.16M-43.37M
Financing Cash Flow
-415.94M-402.98M-230.27M-162.54M-125.51M-175.13M

Vestis Corporation Technical Analysis

Technical Analysis Sentiment
Negative
Last Price9.61
Price Trends
50DMA
12.57
Negative
100DMA
14.02
Negative
200DMA
13.74
Negative
Market Momentum
MACD
-0.75
Negative
RSI
24.24
Positive
STOCH
26.22
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 9.61 is below the 20-day moving average (MA) of 10.56, below the 50-day MA of 12.57, and below the 200-day MA of 13.74, indicating a bearish trend. The MACD of -0.75 indicates Negative momentum. The RSI at 24.24 is Positive, neither overbought nor oversold. The STOCH value of 26.22 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for VSTS.

Vestis Corporation Risk Analysis

Vestis Corporation disclosed 36 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 (62)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
76
Outperform
$1.29B19.6017.54%7.35%9.35%
62
Neutral
$8.07B13.603.76%3.13%3.60%-14.67%
59
Neutral
$1.30B760.60-1.13%14.88%9.87%
58
Neutral
$1.30B136.931.06%1.41%
58
Neutral
$1.26B-15.66%17.72%26.99%
43
Neutral
$1.31B-90.88%-29.45%-10.79%
PCPCT
34
Underperform
$1.24B-96.27%-180.10%
* Industrials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
VSTS
Vestis Corporation
9.99
-8.91
-47.14%
DXPE
DXP Enterprises
84.91
30.73
56.72%
DSGR
Distribution Solutions Group
28.60
-6.82
-19.25%
PLUG
Plug Power
1.32
-1.91
-59.13%
PCT
PureCycle Technologies
7.38
1.66
29.02%
XMTR
Xometry
25.13
7.72
44.34%

Vestis Corporation Earnings Call Summary

Earnings Call Date: Jan 31, 2025 | % Change Since: -39.18% | Next Earnings Date: May 1, 2025
Earnings Call Sentiment Neutral
The earnings call presented a balanced view with both positive and negative aspects. While there were improvements in sales productivity, customer retention, and a strong national account pipeline, there were also challenges such as a year-over-year revenue decline, decreased EBITDA margin, and lower cash flow from operations.
Highlights
Revenue and EBITDA in Line with Expectations
Q1 revenue was $684 million, flat sequentially from Q4 2024, and adjusted EBITDA was $81.2 million, up approximately 1% sequentially.
Strong National Account Pipeline
Significant wins include a new line of expansion with a large restaurant customer, where Vestis will more than triple its recurring revenue. The national accounts pipeline is the strongest it's been for Vestis.
Improvement in Sales Team Productivity
Productivity for field sales improved by 20% year-over-year, with some regions achieving a 40% increase. Sales hiring resumed with positive net change in sales headcount in January.
Customer Retention Improvement
Customer retention rate improved to 92.9%, up 30 basis points year-over-year and up 280 basis points versus the fourth quarter.
Lowlights
Revenue Decline Year-Over-Year
Compared to Q1 of fiscal 2024, revenue was down 4.7% or 4.5% on a constant-currency basis.
Decrease in EBITDA Margin
Q1 EBITDA margin was 11.9%, down 180 basis points year-over-year.
Negative Currency Impact
Unfavorable movement in the Canadian dollar exchange rate negatively impacted revenue.
Lower Cash Flow from Operations
Cash from operations in Q1 was approximately $4 million, down from $52 million in the first quarter of last year.
Company Guidance
During the fiscal first quarter 2025 earnings call, Vestis Corporation provided detailed guidance on several key metrics. The company reported Q1 revenue of $684 million, which remained flat sequentially from Q4 2024, but down 4.7% year-over-year, or 4.5% on a constant-currency basis. Adjusted EBITDA for Q1 was $81.2 million, up 1% sequentially but down 180 basis points year-over-year, resulting in an EBITDA margin of 11.9%. Vestis highlighted a strategic focus on volume growth, expecting it to exceed lost business by Q2, driven by new sales headcount, national account wins, and a customer retention rate of 92.9%, up 30 basis points year-over-year. For full-year fiscal 2025, Vestis reaffirmed its guidance for revenue growth of 3% to 4% and EBITDA growth approaching or exceeding 10% in the second half, supported by strong new volume wins, improved sales productivity, and positive pricing actions. The company also noted progress in cost savings initiatives, including logistics optimization and merchandise reuse. Vestis aimed to maintain a net debt-to-EBITDA ratio of 3.8 times, with plans to reach a target leverage level of 1.5 to 2.5 times by the end of fiscal 2026.

Vestis Corporation Corporate Events

Executive/Board Changes
Vestis Corporation Appoints Phillip Holloman as Interim CEO
Neutral
Mar 19, 2025

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.

Executive/Board Changes
Vestis Corporation Announces CAO Resignation and Replacement
Neutral
Mar 4, 2025

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.

Executive/Board Changes
Vestis Corporation Announces Key Executive Changes
Neutral
Jan 31, 2025

On January 28, 2025, Vestis Corporation announced the retirement of Timothy Donovan, Executive Vice President, Chief Legal Officer, and General Counsel, effective February 14, 2025. Simultaneously, Rick Dillon, Executive Vice President and Chief Financial Officer, will also leave the company on February 14, 2025. Kelly C. Janzen has been appointed as the new Executive Vice President and Chief Financial Officer, effective the same day. Janzen has extensive experience in finance and accounting, having previously held senior roles at several prominent corporations. Her employment agreement includes a substantial compensation package and stipulates conditions for termination and benefits in the event of a change of control.

Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

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.