How does Aramark (ARMK) change from a tortoise to a hare?

Aramark (NYSE: ARMK) stock fell -0.65% on Friday to $35.08 against a previous-day closing price of $35.31. With 1.63 million shares changed hands, the volume of the stock remained heavier than its average volume of 1.39 million shares. During the session, the Restaurants company that operates in wider Consumer Cyclical sector, reached to the highest price of $35.53 whereas the lowest price it dropped to was $35.03. The 52-week range on ARMK shows that it touched its highest point at $39.95 and its lowest point at $28.74 during that stretch. It currently has a 1-year price target of $40.14. With its current market cap of 8.91 billion, ARMK has annualized dividend of $0.44 while the current yield stands at 1.25%. Beta for the stock currently stands at 1.74.

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Price Performance and Earnings:

Stock performance is one of the indicators that investors use to determine whether they will profit from a stock. The price performance of ARMK was up-trending over the past week, with a rise of 5.44%, but this was up by 15.02% over a month. Three-month performance dropped to -5.77% while six-month performance rose 1.27%. The stock gained 1.89% in the past year, while it has lost -4.80% so far this year. A look at the trailing 12-month EPS for ARMK yields 0.66 with Next year EPS estimates of 2.02. For the next quarter, that number is 0.24. This implies an EPS growth rate of 80.40% for this year and 71.72% for next year. EPS is expected to grow by 32.70% annually over the next five years; however, over the past five years, the company experienced an annual growth rate of -18.60%.

Float and Shares Shorts:

At present, 257.10 million ARMK shares are outstanding with a float of 256.13 million shares on hand for trading. On Jul 14, 2022, short shares totaled 9.56 million, which was 3.72% higher than short shares on Jun 14, 2022. In addition to Mr. John J. Zillmer as the firm’s CEO & Director, Mr. Thomas G. Ondrof serves as its Exec. VP & CFO.

Institutional Ownership:

Through their ownership of 102.67% of ARMK’s outstanding shares, institutional investors have majority control over the company. Other institutions hold 51.89% of ARMK, in contrast to 50.40% held by mutual funds. Shares owned by individuals account for 16.18%. As the largest shareholder in ARMK with 8.80% of the stake, The Vanguard Group, Inc. holds 22,589,600 shares worth 22,589,600. A second-largest stockholder of ARMK, RBC Global Asset Management, Inc., holds 20,727,281 shares, controlling over 8.07% of the firm’s shares. Atlanta Capital Management Co. LL is the third largest shareholder in ARMK, holding 16,734,402 shares or 6.52% stake. With a 4.43% stake in ARMK, the American Funds Insurance Series – is the largest stakeholder. A total of 11,375,152 shares are owned by the mutual fund manager. The Eaton Vance Atlanta Capital SMID, which owns about 4.20% of ARMK stock, is the second-largest Mutual Fund holder. It holds 10,787,341 shares valued at 330.42 million. Vanguard Total Stock Market Index holds 2.96% of the stake in ARMK, owning 7,593,068 shares worth 232.58 million.

An Overview of Recent Financials:

Understanding a company as a customer does not mean you will understand it as an investor. The wise investor uses quantitative research to analyze metrics such as revenue, net income, and earnings. In its fiscal quarter reported on Mar 31, 2022, ARMK reported revenue of $3.86B and operating income of $141.99M. Over the past year, revenue came in at $14.34B while operating income stood at $488.80M. It generated $35.75M net income for the quarter, which came to $146.34M over the last twelve months. The EBITDA in the recently reported quarter was $274.28M and diluted EPS was $0.14. EBITDA for the full year was $1.12B.

Analysts Ratings:

Reading analyst opinions is an effective way to decide where to invest, and there are several opinions available for ARMK since 14 analysts follow the stock currently. There are 7 analysts who recommend BUY ratings, while 1 suggest SELL ratings. Of the remaining analysts, 6 believe that the stock is worth HOLDING, 0 give it an OVERWEIGHT rating, and 0 thinks that it’s UNDERWEIGHT. In the same way, a target price assigned to a stock can also reveal much about its potential. With ARMK analysts setting a high price target of $53.00 and a low target of $34.00, the average target price over the next 12 months is $40.36. Based on these targets, ARMK could surge 51.08% to reach the target high and fall by -3.08% to reach the target low. Reaching the average price target will result in a growth of 15.05% from current levels.

EPS: Estimates vs Actual

It is also common to use earnings estimates to evaluate a firm’s growth potential and to determine trading strategy. ARMK will report FY 2022 earnings on 11/15/2022. Analysts have provided yearly estimates in a range of $1.35 being high and $1.06 being low. For ARMK, this leads to a yearly average estimate of $1.16. The earnings surprise of a firm occurs when the actual results change from the consensus earnings estimate. Aramark surprised analysts by $0.01 when it reported $0.22 EPS against a consensus estimate of $0.21. The surprise factor in the prior quarter was $0.00. Based on analyst estimates, the high estimate for the next quarter is $0.27 and the low estimate is $0.22. The average estimate for the next quarter is thus $0.24.

Summary of Insider Activity:

Insiders traded ARMK stock several times over the past three months with 17 Buys and 1 Sells. In these transactions, 2,822 shares were bought while 550 shares were sold. The number of buy transactions has increased to 91 while that of sell transactions has risen to 33 over the past year. The total number of shares bought during that period was 189,414 while 81,934 shares were sold.

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