Fundamental analysis: Aramark (ARMK)

Awarener score: 4.7

Conclusion

The higher the Awarener score, the more bang you get for the buck. It measures how much genuine funds the company generates for the stock price paid (Modest), the business stability (Very poor) and growth (Modest), and the company's inclination to return cash to the stockholders (Modest).

Note: All scores range from 1 (worst) to 10 (best). Conclusions are updated daily with closing stock prices and new reported quarterly financial statements.

Revenue score: 3.5

Business growth has been almost stagnant. It's been encouraging in relation to peer companies.
Aramark business varies frequently, ups and downs are normal. It's risky. It looks worse than most rivals.

Margins score: 4.5

ARMK profit margins -on goods and services sold- are usually extremely poor. They stand bottom tier against rival companies.
Business profit on sales tends to be hardly sufficient. It's below average when measured against competitors.
Profits on sales made -available to repay debt and purchase properties- are usually hardly sufficient. They remain lacking compared to peers.
Earnings -before income taxes and interests on loans taken- tend to be hardly sufficient in relation to total revenues. They're still slightly worse than similar companies.
Profits -before income taxes- are usually hardly sufficient considering total sales, and remain below average when measured against rivals.
Total net profit tends to be hardly sufficient when confronted to sales. Company stands almost average when measured against comparable firms.

Growth score: 1.6

Aramark profit -on goods and services sold- has been growing at a low pace. It's been close to average when compared to competitors.
In recent years, the firm hasn't always been able to profit from operations, which has been bottom tier against comparable firms.
In past years, the company couldn't always turn a profit -available to repay debt and purchase properties-, which compares last-in-rank when measured against peer enterprises.
In the previous years, the firm couldn't always make a profit -before income taxes and interests on loans taken-. It turns to be a disappointment compared to similar stocks.
In past years, at least once the company lost money -before income taxes-. It was bottom tier against rivals.
In the previous years, the firm had at least a total net loss, and last-in-rank when measured against peer companies.
The company lost money at least once in the past years. It's been a disappointment compared to industry peers.

Miscellaneous score: 8.0

ARMK managed to pay little to no income taxes on profits made in the past years. It's been better than most peers.
The company does not report R&D expenses. It's meaningless to measure in relation to competitors.
We have insufficient data to estimate how effective is research and development effort. It stands unknown against rival companies.

Profitability score: 5.8

Aramark usually gets sufficient returns on the resources it controls. It proves similar to peer firms.
The company normally gets hardly sufficient proceeds -on the resources directly invested in the business-. They remain rather normal in relation to similar companies.
Profitability -in relation to owned resources- is usually modest. It ranks almost average when measured against competitors.
In the past, got good returns -on the tangible resources it controls-. This metric is usually related to the industry in which operates and combines profitability versus reinvestment needs. It's similar to comparable enterprises.

Usage of Funds score: 5.1

ARMK usually uses a very large portion of genuine funds generated to buy or replace property, plant, or equipment. The need for reinvestments is heavy. It stands similar to rival firms.
The company is usually investing in new property, plant, and equipment, to improve its operating capabilities, which is top tier when measured against industry peers.
In the past twelve months it paid somewhat low dividends, considering the current stock price. It came slightly worse than competitors.
In recent years, has slightly cut back dividend payments. The company has behaved in a weak position compared to similar firms.
The company usually uses a portion of genuine funds generated to pay dividends. Dividend payments should be safe, unless business prospects are challenged. Sustainability looks worse than most comparable companies.
The company barely enlarges the pool of investors, resulting in slightly more mouths feeding on the pie of profits. It remains close to average when compared to peer enterprises.
Repurchase effectiveness metric is very complex. Run again in analytical mode if you're interested in a technical explanation. It stands rather normal in relation to rivals.
We do not have sufficient data to comment on buybacks and their sustainability. It still looks dubious against competitors.

Balance Sheet score: 4.6

Aramark intangible assets (like brands and goodwill) represent a huge portion of resources controlled, according to accounting books. There could be major difficulties in liquidating them if the company ever gets in financial distress. It happens to be last-in-rank when measured against peer companies.
The company has somewhat more short-term resources than short-term obligations. Liquidity concerns might not be that important. It turns to be close to average when compared to similar firms.
A substantial part of resources controlled were provided for with financial debt. Creditors have as many claims on the company as shareholders. The situation is somewhat risky. It remains bottom tier against rival firms.
Most controlled resources might be only slowly turned into cash and equivalents, which is risky. It looks substantially worse when measured against rivals.
For every dollar of short-term obligations, the company has roughly another of cash and short-term receivables. It's close to average when compared to peer firms.
For every dollar of short-term obligations, the company has very few cents of cash and equivalents, which is mediocre against similar enterprises.
Usually, sales are on a two-months credit. It still ranks similar to peers.
Normally has approximately somewhat less than one month of sales worth in inventory. It comes up as a slight improvement compared to competitors.
On average, it takes less than three months from the purchase to charging customers. It happens to be slightly better than peers.
On average pays suppliers before a month since the purchase. It ranks below average when measured against industry peers.
The company pays its suppliers roughly one month before charging its customers, so there's sparse money invested in working capital. It's close to average when compared to similar companies.
Usual business earnings barely cover net interest expenses. Creditors may be earning money by assuming risks, but hardly shareholders. Situation is risky, profitability must increase, or additional stockholders' funding will eventually be required. It stands mediocre against rival firms.
Business earnings have usually been very low when measured against loans taken. Even significantly cutting back reinvesting in the business, it could take more than ten years to repay the obligations with current profitability. It ranks substantially worse when measured against comparable enterprises.
Revenues are quite good in relation to property, plant, and equipment required to operate. This metric is likely dependent on the industry the company operates in. The more property, plant, and equipment used, the more the company must reinvest to fight obsolescence, which usually means less available funds for the shareholders in the long run. It looks close to average when compared to similar firms.
Resource exploitation is excellent when yearly sales are considered. This metric is normally tied to the industry where the firm belongs. It's still somewhat better than peer companies.

Valuation score: 4.3

Aramark profits are really small compared to market valuation, market valuation doesn't rely on current earnings. It happens to be substantially worse when measured against competitors.
Price-to-Tangible-Book-Value is a fairly complex metric. Run again in analytical mode if you're interested in a technical explanation. It remains a disappointment compared to peers.
In the past twelve months, the company generated some free funds in relation to the stock price, which stands somewhat worse than similar companies.
In the past years the company barely generated enough genuine funds to cover up for its business needs. Business prospects should improve to be in a better position to reward investors. It's still weak when measured against industry firms.
In the past twelve months, the company has slightly enlarged the pool of investors by issuing new shares. The pie of earnings will now be split among a little more stockholders. It came up lacking compared to peer ventures.
The company is largely indebted. It should focus on loan repayment before rewarding stockholders. It looks mediocre against similar enterprises.
Considering the past twelve months, traditional Price-to-Earnings relation is very high. A lot of improvement expectations are already in the stock price, which is risky. It ranks substantially worse when measured against peer companies.
Comparing the current stock price with the past twelve-months revenues gives a not far from one-to-one relationship. This is an important metric to check its evolution through time, and to compare to industry peers. It looks close to average when compared to rival firms.
The relation between the stock price and accounting book value is significantly high, which may be good or bad depending on context. Run again in analytic mode if you want to dig deeper. The company remains mediocre against peer firms.
In the past twelve months, the operating business earned little money when compared to the current stock price and financial position. It happens to be almost average when measured against industry peers.
In an alternate metric of bang for the buck, the company has usually shown a mediocre earnings power ability when measured against the current stock price and financial position. It's still lacking compared to peer companies.

Total score: 4.7

Company at a glance: Aramark (ARMK)

Sector, industry: Industrials, Specialty Business Services

Market Cap: 10.35 billions

Revenues TTM: 16.98 billions

Aramark provides food, facilities, and uniform services to education, healthcare, business and industry, sports, leisure, and corrections clients in the United States and internationally. It operates through three segments: Food and Support Services United States, Food and Support Services International, and Uniform and Career Apparel. The company offers food-related managed services, including dining, catering, food service management, and convenience-oriented retail services; non-clinical support services, such as patient food and nutrition, retail food, and procurement services; and plant operations and maintenance, custodial/housekeeping, energy management, grounds keeping, and capital project management services. It also provides on-site restaurants, catering, convenience stores, and executive dining services; beverage and vending services; and facility management services comprising landscaping, transportation, payment, and other facility consulting services relating to building operations. In addition, the company offers concessions, banquet, and catering services; retail services and merchandise sale, recreational, and lodging services; and facility management services at sports, entertainment, and recreational facilities. Further, the company offers correctional food; and operates commissaries, laundry facilities, and property rooms. Additionally, it provides design, sourcing and manufacturing, delivery, cleaning, maintenance, and marketing services for uniforms and accessories; provides managed restroom services; and rents uniforms, work clothing, outerwear, particulate-free garments, and non-garment items and related services that include mats, shop towels, and first aid supplies. The company was formerly known as ARAMARK Holdings Corporation and changed its name to Aramark in May 2014. Aramark was founded in 1959 and is based in Philadelphia, Pennsylvania.