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Vestis Corporation (VSTS)
NYSE:VSTS
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Vestis Corporation
(NYSE:VSTS)
58Neutral
Positive Factors
Financial Performance
Efficiency improvements are taking hold, driving better margins despite the deleveraging impact.
Leadership and Management
The company is entering a new chapter, adding several new executives with the intention of improving operational execution while remaining committed to its long-term strategic goals.
Strategic Developments
Management's disclosure that the company has retained advisors to explore potential sale reengages takeout speculation, which had been previously unwinding.
Negative Factors
Guidance and Forecasting
Current guidance is considered stale as it was created by the previous executive team who are no longer with Vestis.
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)
Market Cap
$1.16B
Dividend Yield1.59%
Average Volume (3M)2.92M
Price to Earnings (P/E)121.7
Beta (1Y)1.31
Revenue GrowthN/A
EPS GrowthN/A
CountryUS
Employees19,600
SectorIndustrials
Sector Strength72
IndustryRental & Leasing Services
Share Statistics
EPS (TTM)0.07
Shares Outstanding131,745,120
10 Day Avg. Volume1,590,717
30 Day Avg. Volume2,924,539
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.48
Price to Cash Flow (P/CF)87.10
P/FCF Ratio87.10
Enterprise Value/Market Cap2.91
Enterprise Value/RevenueN/A
Enterprise Value/Gross Profit4.13
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$12.50Price Target Upside42.05% Upside
Rating ConsensusHold
Number of Analyst Covering5
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
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.72
Positive
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.65
Positive
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.78
Positive
| 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
Neutral
8.80
Price Trends
10.32
Negative
12.96
Negative
13.44
Negative
Market Momentum
-0.60
Negative
47.56
Neutral
91.04
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For VSTS, the sentiment is Neutral. The current price of 8.8 is above the 20-day moving average (MA) of 8.44, below the 50-day MA of 10.32, and below the 200-day MA of 13.44, indicating a neutral trend. The MACD of -0.60 indicates Negative momentum. The RSI at 47.56 is Neutral, neither overbought nor oversold. The STOCH value of 91.04 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral 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 (63)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | $1.24B | 18.71 | 17.54% | ― | 7.35% | 9.35% | |
63 Neutral | $1.24B | 760.60 | -1.13% | ― | 14.88% | 9.87% | |
63 Neutral | $4.27B | 11.40 | 5.38% | 214.63% | 4.11% | -8.98% | |
58 Neutral | $1.16B | 121.72 | 1.06% | 1.59% | ― | ― | |
56 Neutral | $1.27B | ― | -15.66% | ― | 17.72% | 26.99% | |
45 Neutral | $788.61M | ― | -90.88% | ― | -29.45% | -10.79% | |
38 Underperform | $1.21B | ― | -96.27% | ― | ― | -180.10% |
* Industrials Sector Average
Performance Comparison
VSTS
Vestis Corporation
8.80
-9.84
-52.79%
DXPE
DXP Enterprises
85.40
35.25
70.29%
DSGR
Distribution Solutions Group
26.71
-6.44
-19.43%
PLUG
Plug Power
0.81
-1.59
-66.25%
PCT
PureCycle Technologies
6.74
1.78
35.89%
XMTR
Xometry
25.16
7.50
42.47%
Vestis Corporation Earnings Call Summary
Earnings Call Date:Jan 31, 2025
(Q1-2025)
| % Change Since: -44.30%|
Next Earnings Date:May 06, 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.Q1-2025 Updates
Positive Updates
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.
Negative Updates
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.