Aramark Common Stock (ARMK)

FairStock Score: 34/100 — RISKY

Key Financials

AI Analysis

AI-generated, general educational analysis — not personal investment advice.

I look for businesses with durable economics, honest accounting, and a price that leaves room for error. Aramark is a giant in food and facilities services, with 278,390 employees and contracts across education, healthcare, business, sports, and corrections. That scale and recurring service model can create switching costs, though the work is competitive and margins are thin: in fiscal Q3 2026, the quarter ended 2026-07-03, revenue was $5.1B, net income $97.7M, and diluted EPS $0.36, a net margin of only 1.93%. Still, that compared well with fiscal Q3 2025, when revenue was $4.6B, net income $71.8M, and diluted EPS $0.27. The balance sheet gives me pause. FairStock calculates debt-to-equity at 1.87 and an Altman Z-Score of 1.38, which is not a cushion. Returns are modest: ROE 11.69%, ROCE 4.24%. Free cash flow is real—$432.8M trailing twelve months—but the 3.0% FCF yield is not generous. FairStock's Lynch category calls it a STALWART, citing 18.8% annual profit growth and 10.6% revenue growth over three years, yet its FairStock Score is 34/100, and the provided profit growth figure is -8.95%. Valuation is the bigger issue. At the 2026-10-13 close of $54.78, FairStock calculates a P/E of 38.31, P/B of 4.25, EV/EBITDA of 14.66, and a Graham Number of $20.36, implying a margin of safety of -169.06%. I want a bargain; this looks priced for much better margins and debt reduction than the filings currently show.

In plain English: Aramark provides food and facility services to schools, hospitals, businesses, sports venues, and other organizations. The company is large and recently grew sales and profit, but its profit margins are very thin and it uses a lot of debt. At the recent price, the stock looks expensive compared with the earnings and accounting value shown in its reports.

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Data as of 2026-10-13 close · note generated 2026-10-15 · model deepseek-flash

Sources (SEC EDGAR): fiscal Q3 2026 10-Q (period ended 2026-07-03) · fiscal Q2 2026 10-Q (period ended 2026-04-03) · fiscal Q1 2026 10-Q (period ended 2026-01-02) · fiscal Q3 2025 10-Q (period ended 2025-06-27) · FY2025 10-K (period ended 2025-10-03) · FY2024 10-K (period ended 2024-09-27) · FY2023 10-K (period ended 2023-09-29)

Fundamentals from company filings and market-data providers; prices are end-of-day, not real-time. AI-generated analysis is general and educational — not personal investment advice. Scoring methodology · Score test · Disclaimer