Vestis Corp (NYSE: VSTS)

Sector: Industrials Industry: Rental & Leasing Services CIK: 0001967649
Market Cap 968.15 Mn
P/B 1.12
P/E -20.41
P/S 0.36
ROIC (Qtr) 1.66
Div Yield % 0.53
Rev 1y % (Qtr) -2.98
Total Debt (Qtr) 1.41 Bn
Debt/Equity (Qtr) 1.63
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About

Vestis Corp, a prominent name in the uniform rentals and workplace supplies industry, trades under the symbol VSTS. The company has established a strong presence in the United States and Canada, operating in the uniforms, mats, towels, linens, restroom supplies, first-aid supplies, and safety products sector. Vestis Corp's primary business activities involve providing full-service uniform solutions, managed restroom supply services, first-aid supplies, and safety products. The company's revenue generation is primarily driven by its diverse customer...

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Investment thesis

Bull case

  • Operating cash flow of 98.14M provides strong 11.24x coverage of stock compensation 8.73M, indicating sustainable incentive practices.
  • Robust tangible asset base of 1.74B provides 3.77x coverage of working capital 460.84M, indicating strong operational backing.
  • Tangible assets of 1.74B provide robust 9.20x coverage of other current liabilities 189.06M, indicating strong asset backing.
  • Tangible assets of 1.74B provide robust 4.43x coverage of current liabilities 392.22M, showing strong asset backing.
  • Tangible assets of 1.74B provide robust 11.37x coverage of receivables 152.99M, showing strong asset quality.

Bear case

  • Operating cash flow of 98.14M barely covers its investment activities of (46.79M), with a coverage ratio of -2.10, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • With cash reserves of 41.55M against inventory of 573.43M, the 0.07 cash-to-inventory ratio suggests potential liquidity risks if inventory turnover slows, particularly concerning given current supply chain volatilities.
  • Operating cash flow of 98.14M provides thin coverage of dividend payments of (9.22M) with a -10.64 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • Operating cash flow of 98.14M provides minimal -14.10x coverage of tax expenses of (6.96M), suggesting potential tax planning inefficiencies or unsustainable tax positions.
  • Operating earnings of 36.95M show weak coverage of depreciation charges of 140.42M, with a 0.26 ratio indicating high capital intensity and potential reinvestment needs.

Geographical Breakdown of Revenue (2025)

Geographical Breakdown of Revenue (2025)

Peer comparison

Companies in the Rental & Leasing Services
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 URI United Rentals, Inc. 55.62 Bn 22.30 3.45 15.35 Bn
2 FTAI FTAI Aviation Ltd. 27.80 Bn -179.72 106.00 3.45 Bn
3 AER AerCap Holdings N.V. 26.27 Bn 7.00 3.08 43.57 Bn
4 UHAL U-Haul Holding Co /NV/ 13.75 Bn 106.91 2.29 8.06 Bn
5 GATX Gatx Corp 9.00 Bn 53.16 6.81 9.03 Bn
6 R Ryder System Inc 8.88 Bn 17.80 0.70 7.65 Bn
7 AL Air Lease Corp 7.23 Bn 6.92 2.40 19.73 Bn
8 HRI Herc Holdings Inc 5.00 Bn 5,004.00 1.14 9.68 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 0.82 1.32
EV to Cash from Ops. EV/CFO 24.02 77.20
EV to Debt EV to Debt 1.67 3.45
EV to EBIT EV/EBIT 63.79 -105.66
EV to EBITDA EV/EBITDA 12.34 20.85
EV to Free Cash Flow [EV/FCF] EV/FCF 46.71 -1.38
EV to Market Cap EV to Market Cap 2.43 3.10
EV to Revenue EV/Rev 0.87 9.87
Price to Book Value [P/B] P/B 1.12 7.72
Price to Earnings [P/E] P/E -20.41 277.95
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) -5.15 3.00
Dividend Payout Ratio % Div Payout % (Qtr) -9.50 500.03
Dividend per Basic Share Div per Share (Qtr) 0.04 1.19
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 9.14 6.22
Interest Coverage Int. cover (Qtr) 0.40 -60.94
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 32.93 17.05
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 123.80 54.66
Dividend Growth (1y) % Div 1y % (Qtr) -75.00 0.10
EBIAT Growth (1y) % EBIAT 1y % (Qtr) -58.04 38.63
EBITDA Growth (1y) % EBITDA 1y % (Qtr) -32.52 5.40
EBIT Growth (1y) % EBIT 1y % (Qtr) -72.60 2.84
EBT Growth (1y) % EBT 1y % (Qtr) -424.86 42.60
EPS Growth (1y) % EPS 1y % (Qtr) -562.50 243.85
FCF Growth (1y) % FCF 1y % (Qtr) -85.70 5.41
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) -10.33 31.59
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.94 0.54
Cash Payout Ratio Cash Payout (Qtr) 0.06 0.03
Cash Ratio Cash Ratio (Qtr) 0.11 0.21
Current Ratio Curr Ratio (Qtr) 2.18 1.01
Debt to Equity Ratio Debt/Equity (Qtr) 1.63 20.57
Interest Cover Ratio Int Coverage (Qtr) 0.40 -60.94
Times Interest Earned Times Interest Earned (Qtr) 0.40 -60.94
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 6.50 35.32
EBIT Margin % EBIT Margin % (Qtr) 1.36 12.98
EBT Margin % EBT Margin % (Qtr) -2.00 3.50
Gross Margin % Gross Margin % (Qtr) 26.10 42.91
Net Profit Margin % Net Margin % (Qtr) -1.70 1.24