UniFirst (UNF) has flown a bit under the radar lately, but its steady revenue and earnings growth make the recent pullback interesting for investors who like durable, service driven business models.
See our latest analysis for UniFirst.
The stock has cooled off after its recent run. A 1 month share price return of 8.06 percent has rolled over into a modest year to date share price gain of 2.28 percent, while the 1 year total shareholder return of negative 5.78 percent shows longer term momentum is still rebuilding.
If UniFirst has you rethinking where steady growth might come from next, this could be a good moment to explore fast growing stocks with high insider ownership.
With modest growth, a recent pullback, and shares now hovering just above analyst targets, the key question is whether UniFirst is quietly undervalued or if the market has already priced in its next leg of growth.
Most Popular Narrative Narrative: 5.3% Overvalued
With UniFirst last closing at $174.20 against a narrative fair value of $165.50, expectations hinge on slow but steady compounding in profits and margins.
In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 21.9x on those 2028 earnings, up from 21.1x today. This future PE is lower than the current PE for the US Commercial Services industry at 25.7x.
If you want to see what justifies paying up for mid single digit growth, margin uplift and a richer future earnings multiple than today, dig into the full narrative.
Result: Fair Value of $165.50 (OVERVALUED)
Have a read of the narrative in full and understand what's behind the forecasts.
However, activist pressure and softer customer demand could still upset the steady compounding story if governance battles or weaker wearer levels persist.
Find out about the key risks to this UniFirst narrative.
Another View: Earnings Multiple Says Fair, Not Frantic
While the narrative fair value pins UniFirst as 5.3 percent overvalued, the current price to earnings ratio of 21.2 times looks restrained against peers at 38 times and an industry average of 24.9 times, even if it sits above a fair ratio of 19.7 times.
That gap to the fair ratio hints at some downside risk if sentiment cools, but the discount to peers also suggests room for rerating if execution and governance improve. Which way do you think the market will lean first?
See what the numbers say about this price — find out in our valuation breakdown.
Build Your Own UniFirst Narrative
If you disagree with this take, or simply want to dig into the numbers yourself, you can build a fresh UniFirst story in minutes with Do it your way.
A good starting point is our analysis highlighting 2 key rewards investors are optimistic about regarding UniFirst.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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