Unifirst Corporation Common Stock (UNF)

FairStock Score: 33/100 — RISKY

Key Financials

Strengths

• Generates $98 million in annual free cash flow (2.1% yield on market cap)
• Conservative balance sheet with debt-to-equity of just 0.04, providing financial flexibility
• Altman Z-Score of 6.1 confirms minimal bankruptcy risk and strong solvency
• Established organization with 16,000 employees providing operational scale

Concerns

• Trades significantly above Graham Number ($142) with negative 84% margin of safety—limited downside protection
• Weak Piotroski F-Score of 3/9 suggests deteriorating financial quality across multiple dimensions

AI Analysis

Unifirst Corporation Common Stock is a small-cap industrials company valued at $4.7 billion. The business generates $2.5 billion in annual revenue with a 0.8% net margin and $98 million in free cash flow. From a quality standpoint, Unifirst shows weak Piotroski F-Score of 3/9 signaling deteriorating fundamentals and Altman Z-Score of 6.1 confirms fortress-level solvency. On valuation, the stock is trading at a premium 35.4x earnings, with trades above its Graham Number with a negative 84% margin. Growth dynamics show revenue growing at 3.4% and profit growth of -16.3%. Our composite FairStock Score of 33/100 reflects below-average fundamentals overall. Investors should weigh the business quality against the current price and their own margin of safety requirements.

Bull Case

Improving fundamentals and sector tailwinds could drive meaningful earnings growth, compressing the effective multiple for patient investors. With $98 million in annual free cash flow (2.1% yield), management has ample capital for buybacks, dividends, or accretive acquisitions.

Bear Case

At 35x earnings, any growth disappointment triggers rapid multiple compression—a 20% earnings miss plus multiple contraction to 20x implies 40%+ downside. Regulatory changes, input cost inflation, or demand normalization represent underappreciated risks that could materially impact forward estimates.

Data from SEC filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer