UniFirst Corp (UNF) stock analysis

P/E above its 5-year median

UniFirst's P/E of 40.0 is above its own 5-year median of 28.2.

P/E above the industry

UniFirst's P/E of 40.0 is above the Consumer discretionary median of 19.6.

EV/EBITDA above its 5-year median

UniFirst's EV/EBITDA of 15.0 is above its 5-year median of 11.4.

P/B above the industry

UniFirst's price-to-book of 1.96 is above the Consumer discretionary median of 1.80.

Trading above fair value

The share price of $240.95 is above our fair value estimate of $155.60.

Margin of safety under 20%

The price is 54.9% above fair value, so there is no margin of safety.

Revenue growing under 10% a year

Revenue grew 4.2% a year over the last three fiscal years, short of the 10% we look for.

EPS growing under 10% a year

Diluted EPS grew 2.9% a year over the last three fiscal years.

Earnings growth not accelerating

Net income grew -26.2% over the last twelve months, against a 5-year average of -6.2% a year.

Growing faster than the industry

Revenue grew 3.7% over the last twelve months; the Consumer discretionary median is 2.1%.

Guidance issued

The latest outlook (full-year fiscal 2026 consolidated revenues, Jan 7, 2026) was issued for the first time, so it neither adds nor takes away points.

Gross margin slipping

Gross margin was 36.6% over the last twelve months, against 36.6% a year earlier.

Return on equity under 15%

Return on equity was 5.0% over the last twelve months and averaged 5.9% over five years; we look for 15% on both.

Return on capital under 10%

Return on invested capital was 5.2%, below the 10% that usually covers the cost of capital.

Return on equity below the industry

UniFirst's return on equity of 5.0% is below the Consumer discretionary median of 5.6%.

Earnings shrank over 5 years

Net income shrank 6.2% a year on average over the last five fiscal years.

Net margin below its 5-year average

Net margin was 4.3% over the last twelve months, against a 5-year average of 5.2%.

Net margin above the industry

UniFirst's net margin of 4.3% is above the Consumer discretionary median of 2.2%.

No debt

UniFirst has no borrowings on its latest balance sheet.

Debt not rising

With no debt today, leverage cannot have risen.

Debt covered by cash flow

There is no debt to cover.

Interest well covered

No meaningful interest expense to cover.

Short-term assets cover short-term debts

Current assets are 3.14 times current liabilities.

Low bankruptcy risk

The Altman Z-score is 6.43; above 3 is the safe zone and below 1.8 the distress zone.

Pays a dividend

UniFirst paid dividends worth 0.6% of the share price over the last twelve months.

Yield below Treasuries

The 0.6% yield is below the 4.4% on a 1-year Treasury.

Yield below the top quarter

The top quarter of US dividend payers yield 3.8% or more; UniFirst yields 0.6%.

Dividend stability

Fewer than five years of dividend history.

Covered by earnings

Dividends take 23.0% of net income.

Covered by free cash flow

Dividends take 35.5% of free cash flow.