Value
5.6/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 2.9 |
| P/S | 9.8 |
| EV/EBITDA | 3.0 |
| Fwd P/E | 6.2 |
| PEG | 7.2 |
| Analyst target | 4.0 |
- ▸Forward P/E: 20.9x
- ▸PEG: 0.97
ARMK · Why this verdict
Why Aramark (ARMK) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictSELL
Overall score5.7/10
ConfidenceMEDIUM
MacroNEUTRAL
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Business quality falls short of the minimum passing standard at 3.5 versus the 4.0 floor required, with no identifiable competitive moat; a business without durable pricing power is more exposed to cost pressures and contract losses than peers that have cleared the quality bar. Warnings | The quality assessment recovers to at least 4.5 over the next 4 quarters as margins expand and the moat assessment improves. | →Stable |
| CounterServices businesses often operate at structurally thin margins while generating durable recurring revenue through long-term institutional relationships; the below-floor quality score may understate contractual stickiness that does not appear in conventional margin metrics. | ||
Despite the quality and momentum concerns, the company ranks as a growth leader within its industry peer group, suggesting the top-line engine is outpacing peers in a way that could, if sustained, eventually flow through to margin expansion and quality improvement. Peer-rank breakdown | Earnings growth translates into a quality score above 4.5 within 4 quarters, resolving the below-floor quality concern and completing the case for the growth premium. | →Stable |
| CounterPeer-group growth leadership at low margins can reflect revenue scaling without profitability; the average earnings surprise across the last four quarters is negative, indicating even the current growth is not consistently exceeding expectations. | ||
The stock currently trades above the analyst consensus target, producing a negative risk/reward ratio of negative 0.17-to-1; there is no conventional upside to the consensus target from the current price level, and the geometry offers more risk than reward for new capital. Price targets | Either the stock pulls back below $50 or analysts raise the consensus target above $58, restoring a positive risk/reward before adding exposure. | →Stable |
| CounterAnalyst sentiment is notably favorable with a high consensus rating, suggesting the consensus price target may be stale and due for an upward revision after the next earnings report; a re-rating could quickly restore conventional upside geometry. | ||
Momentum has failed its minimum passing threshold at 3.3 versus the 4.5 required, on-balance volume is falling, and near-term support and resistance levels are unfavorable — three converging technical signals indicating sellers are in control despite the stock holding above the 200-day moving average. Momentum breakdown | Momentum recovers to above 4.5 and on-balance volume turns positive for at least 4 consecutive weeks. | →Stable |
| CounterThe stock remains above its 200-day moving average, which historically acts as a support floor; a positive catalyst from the next earnings report could reverse the distribution pattern quickly given the favorable analyst backdrop. | ||
Business quality falls short of the minimum passing standard at 3.5 versus the 4.0 floor required, with no identifiable competitive moat; a business without durable pricing power is more exposed to cost pressures and contract losses than peers that have cleared the quality bar.
→StableWarnings
- Expectation
- The quality assessment recovers to at least 4.5 over the next 4 quarters as margins expand and the moat assessment improves.
CounterServices businesses often operate at structurally thin margins while generating durable recurring revenue through long-term institutional relationships; the below-floor quality score may understate contractual stickiness that does not appear in conventional margin metrics.
Despite the quality and momentum concerns, the company ranks as a growth leader within its industry peer group, suggesting the top-line engine is outpacing peers in a way that could, if sustained, eventually flow through to margin expansion and quality improvement.
→StablePeer-rank breakdown
- Expectation
- Earnings growth translates into a quality score above 4.5 within 4 quarters, resolving the below-floor quality concern and completing the case for the growth premium.
CounterPeer-group growth leadership at low margins can reflect revenue scaling without profitability; the average earnings surprise across the last four quarters is negative, indicating even the current growth is not consistently exceeding expectations.
The stock currently trades above the analyst consensus target, producing a negative risk/reward ratio of negative 0.17-to-1; there is no conventional upside to the consensus target from the current price level, and the geometry offers more risk than reward for new capital.
→StablePrice targets
- Expectation
- Either the stock pulls back below $50 or analysts raise the consensus target above $58, restoring a positive risk/reward before adding exposure.
CounterAnalyst sentiment is notably favorable with a high consensus rating, suggesting the consensus price target may be stale and due for an upward revision after the next earnings report; a re-rating could quickly restore conventional upside geometry.
Momentum has failed its minimum passing threshold at 3.3 versus the 4.5 required, on-balance volume is falling, and near-term support and resistance levels are unfavorable — three converging technical signals indicating sellers are in control despite the stock holding above the 200-day moving average.
→StableMomentum breakdown
- Expectation
- Momentum recovers to above 4.5 and on-balance volume turns positive for at least 4 consecutive weeks.
CounterThe stock remains above its 200-day moving average, which historically acts as a support floor; a positive catalyst from the next earnings report could reverse the distribution pattern quickly given the favorable analyst backdrop.
TrendMatrix Research · core thesis
Engine thesis — one sentence
Business quality sits below the minimum acceptable threshold with no identifiable competitive moat, the stock is already trading above the analyst consensus target with a negative risk/reward, and price momentum has failed its minimum threshold with volume in distribution — the aggregate signal favors reducing exposure rather than adding to the position.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Per-dimension breakdown
Quality
3.5/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 3.7 |
| ROA | 2.7 |
| Gross margin | 0.0 |
| Op margin | 1.8 |
| Net margin | 0.9 |
| Current ratio | 4.6 |
| FCF quality | 6.6 |
| Moat | 4.9 |
| Piotroski F | 6.7 |
- ▸No competitive moat
Growth
8.1/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 6.2 |
| EPS growth | 10.0 |
Momentum
6.6/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.0 |
| MACD | 7.1 |
| OBV | 10.0 |
| MA position | 9.0 |
| Volume | 1.9 |
- ▸Volume accumulation (rising OBV)
- ▸Above 200-day MA
Sentiment
6.9/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 7.8 |
| Analyst rating | 7.3 |
| Price target | 5.5 |
- ▸LLM news sentiment: +0.55 (n=1)
Insider
5.0/10data confidence 50%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 5.0 |
- ▸Insider selling (low materiality) — $974,228 (0.007% of mkt cap)
Peer rank
4.7/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 5.4 |
| quality rank | 5.2 |
| growth rank | 8.3 |
- ▸Industry growth leader
Technical
4.3/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 1.2 |
| support resistance | 1.9 |
| 52w position | 9.7 |
Risk (lower is worse)
6.9/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 8.0 |
| days to cover | 6.8 |
| volatility | 7.8 |
| put call | 10.0 |
| implied vol | 6.0 |
| beta | 6.3 |
| debt equity | 3.2 |
- ▸Concentration risks: 1 HIGH, 1 MED (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
4.1/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 3.3 |
| earnings timing | 5.0 |
| surprise avg | 1.3 |
| dividend safety | 5.2 |
| news activity | 5.0 |
- ▸Dividend: 85.0%
How the verdict was assembled
Engine trigger
Quality below minimum threshold.
Engine technical detail
verdict_path:
L1:HARD_BLOCKPassed (7)
- MOMENTUM:6.6>=5.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:38d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:-1.1=NEGATIVE
Warning (0)
none
Reward-to-Risk
-1.10
Upside
-6.9%
Downside
6.2%
Sizing output
AVOID
SetupBreakout — Golden cross, above all MAs, RSI 64, MACD bullish
EdgeNo clear edge — No clear edge identified
SuitabilityModerate — Balanced profile
Investment implication
The L1 gate blocked the positive-verdict path: a hard-floor threshold was breached, so dimensional pillars — including Growth at 8.1 could not lift the engine output above the verdict floor. Failed gate signal: ASYMMETRY:-1.1=NEGATIVE.
The strongest dimensions are Growth at 8.1, Sentiment at 6.9, and Risk (lower is worse) at 6.9; the weakest are Quality at 3.5, Catalyst at 4.1, and Technical at 4.3. The V9 engine flagged 1 failed gate, producing an asymmetric reward-to-risk of -1.10 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Quality Below Minimum Threshold
Trip ifQuality score recovers above 4.5 and holds for 2 consecutive quarters.
- P2Price Above Analyst Target
Trip ifStock price falls below $50 for 2 consecutive weeks, restoring upside to the analyst consensus target.
- P3Momentum Breakdown Distribution
Trip ifOn-balance volume turns positive and the momentum score rises above 4.5 for 4 consecutive weeks.
- P4Growth Peer Leadership
Trip ifRevenue growth falls below 5% YoY for 2 consecutive quarters, eliminating the growth-leadership case.