Aramark
Orin's own judgment of how firmly the evidence points one way — not the chance the price goes up.
Aramark stays a hold as accelerating top-line growth and recovering quarterly gross profit are not yet enough to justify the 38.4x trailing PE, which trades at a 26% premium to the peer median of 30.4x.
Q3 FY2026 revenue grew 9.3% YoY to $5.06B with gross profit rising to $430M from $370M a year earlier, and EPS has beaten estimates in each of the last four quarters, but full-year FY2025 gross margin compressed to 5.8% from 8.2% and total debt stands at $5.72B against equity of $3.15B. The EV/EBITDA of 15.1x is 22% below the peer median of 19.3x, and management's data-center hospitality expansion is a credible growth vector, but until full-year gross margin stabilization is confirmed, the risk/reward remains balanced.
What could go wrong
- Gross margin fragility. FY2025 gross margin collapsed to 5.8% from 8.2% as gross profit fell from $1.43B to $1.07B despite higher revenue; if Q3 FY2026's gross profit recovery to $430M does not sustain across quarters, earnings quality is questionable.
- Valuation premium. At 38.4x trailing PE versus a peer median of 30.4x, ARMK prices in continued EPS growth; any deceleration in the 9.3%+ quarterly revenue growth or EPS beat streak could trigger multiple compression.
- Leverage. Total debt of $5.72B against stockholders' equity of $3.15B as of FY2025 leaves limited balance-sheet flexibility if interest costs rise or organic growth slows.
- Insider selling. Over 24 months insiders net sold 90,519 shares for $5.37M; the CEO and COO both disposed shares on 2 Oct, though these were code F transactions.
What would change my mind
Where this comes from: Q3 FY26 results · FY25 fundamentals · peer comparison · earnings vs estimates. Orin's read on ARMK; not advice.
How has the share price moved?
Up 38.4% over twelve months, from $40.11 on 27 Oct 2025 to $55.52 at the Tue 27 Oct 2026 close. Its highest close in that time was $62.39 on 14 Aug 2026; the last close is 11.0% below it.
- Green line: the closing price each trading day.
- Grey line: the average closing price over the last 50 trading days.
- Dashed amber line: the same over the last 200 trading days — a slower, smoother line.
- Bars along the bottom: shares traded each day — green when it closed higher than the day before, rose when lower (the most, 9.3M, on 17 Nov 2025).
- Flags: the company's filings, on the day they were made (a 10-Q is the quarterly report and a 10-K the annual report; an 8-K reports a major event).
On file
All ARMK filingsLargest holders · 13F Q2 2026
Money flow| Filer | Position | Of fund |
|---|---|---|
| BlackRock | $1.4B | 0.0% |
| Massachusetts Financial Services | $903.1M | 0.3% |
| Morgan Stanley | $677.1M | 0.0% |
| Vanguard Capital Management | $674.8M | 0.0% |
| Vanguard Portfolio Management | $636.1M | 0.0% |
| State Street | $465.8M | 0.0% |
| AQR Capital Management | $457.4M | 0.2% |
| T. Rowe Price Associates | $368.1M | 0.0% |
| Goldman Sachs Group | $340.6M | 0.0% |
| Geode Capital Management | $277.6M | 0.0% |
74 of the 815 filers we track · quarter ended Q2 2026 · positions, not flows
Insiders, last 24 months: 273 Form 4 filings; open-market trades net −$5.4M. Of the 50 on hand, 0 were open-market purchases and 2 sales — the rest are grants, option exercises and tax withholding.
Ask Orin about ARMK
Orin answers questions about ARMK from its filings, transcripts and numbers — with the source behind every claim. Your own desk starts with 3 free days, card required.
Start 3 free days →How is it priced, against its own past and its sector?
Priced at 38.0× its last 12 months of profit (Tue 27 Oct close) — higher than in 3 of the 4 of its last 5 fiscal years with a P/E (middle 30.5×); the typical Industrials company on the NYSE is at 33.7×.
| Measure | Now | Its usual | Sector |
|---|---|---|---|
| P/E | 38.0×above usual | 30.5× | 33.7× |
| P/S | 0.74×above usual | 0.54× | — |
| EV/EBITDA | 15.0×above usual | 12.6× | — |
| P/B | 4.3×above usual | 2.4× | — |
- "Its usual" is the middle of its own last 5 fiscal years.
P/E: the share price divided by one year of profit per share — roughly how many years of today's profit the price pays for. A company that loses money has no P/E.
P/S: the company's total market value divided by one year of revenue. Used when there is no profit to measure.
EV/EBITDA: the price of the whole company (its shares plus its debt, minus its cash) divided by one year of operating profit before interest, tax and write-downs.
P/B: the share price divided by the book value per share — what the company owns minus what it owes, as its accounts record it. When book value is tiny, P/B swings wildly and says little.
What do the analysts who cover it publish?
The analysts' average 12-month price target is $69.20 (from $63 to $74) — 25% above the Tue 27 Oct close price. That is their published opinion, not Orin's.
$69.20
$63 – $74 · +25% against the last close
- 10 buy or overweight
- 1 hold
- 0 underweight or sell
Price target: the share price an analyst publishes for about 12 months ahead. It is the opinion of the firm that wrote it; the average is across the firms that cover the company.
Overweight / underweight: analysts' rating words: overweight means the firm expects the stock to do better than the others it covers, underweight worse. Their words, not Orin's.
How is it priced next to the companies it is compared to?
Priced at 38.0× its last 12 months of profit. Only 2 of the 2 companies it is compared to made a profit (ABM 19.3×, CTAS 41.9×), so there is no typical P/E.
| Company | Market value | P/E | EV/EBITDA | Gross margin | Net margin | ROE |
|---|---|---|---|---|---|---|
| ARMKAramark | $15B | 38.0× | 15.0× | 6.6% | 1.9% | 12% |
| ABMABM Industries Inc. | $3B | 19.3× | 11.2× | 11.7% | 1.8% | 9% |
| CTASCintas Corporation | $85B | 41.9× | 27.3× | 51.0% | 17.8% | 42% |
- The list of companies is the data vendor's choice, so it can include a company a person would not have picked.
Market value: the share price times the number of shares — what the whole company is priced at.
P/E: the share price divided by one year of profit per share — roughly how many years of today's profit the price pays for. A company that loses money has no P/E.
EV/EBITDA: the price of the whole company (its shares plus its debt, minus its cash) divided by one year of operating profit before interest, tax and write-downs.
Gross margin: the share of each $1 of sales left after the direct cost of making what was sold.
Net margin: the share of each $1 of sales kept as profit after every cost. Below zero, the company lost money.
ROE: return on equity: one year of profit as a share of the shareholders' money in the business (its book value).
Is it priced high or low compared with its own past?
Priced at 38.0× its last 12 months of profit (Tue 27 Oct close). It has no full fiscal year on file since its history starts, so there is nothing of its own to compare with.
- Now38.0×
P/E: the share price divided by one year of profit per share — roughly how many years of today's profit the price pays for. A company that loses money has no P/E.
Fiscal year (FY): the company's own 12-month accounting year, which need not match the calendar year.
How has its sector been priced?
Industrials companies on the NYSE were priced at a typical 33.7× their yearly profit (Tue 27 Oct close).
- Now33.7×
- Each year is the middle of that calendar year's daily sector P/E; "Now" is the Tue 27 Oct close figure, the same one in the table above.
Sector P/E: the middle P/E of the companies in the same sector on the same stock exchange, as the data vendor works it out each day.
What does a cash-flow model say a share is worth?
A standard cash-flow model puts it at $45 a share — 18% below the $55.16 price it was computed against (27 Oct).
| Model | Value a share | Against the price then |
|---|---|---|
| Standard | $45 | 18% below $55.16 |
| Levered | $6 | 89% below $55.16 |
Discounted cash flow: a model's estimate of what the company is worth today, from the cash it is forecast to make in future years. Small changes in the forecast move it a lot, and it says little about a company that loses money.
Standard / levered: two versions of the cash-flow model: the standard one counts the cash before the company pays its lenders, the levered one after.