Pennsylvania-based company, Aramark (NYSE: ARMK) is a customer service company that offers food, facilities, and uniform services. In the second quarter of 2023. The company shows a sales growth of 15% Year-on-Year, with an organic growth of 14% in the same comparison.
In-Depth Financial Performance of Amarak
The company’s operating income increased by 38%, while adjusted Operating Income grew by 34%. The improved profitability was due to operating leverage from increased revenue, improved supply chain economics, and disciplined above-unit cost management.
The company’s EPS saw an increase of 706% to $1.29, while adjusted EPS grew by 48% to $0.36. The report also mentions that Aramark opportunistically refinanced a $1.1 Billion term loan, extending its debt maturity to 2030. The company also repaid approximately $630 Million of debt.
According to John Zillmer, the CEO of Aramark, the company’s Q3 results demonstrate their persistent efforts towards achieving profitable growth on a global scale. As inflation shows signs of moderation and pricing strategies take effect, the company’s confidence in profitability for the fiscal year’s final increases. Zillmer expresses pride in the performance-driven culture of Aramark’s teams worldwide, contributing to the raised outlook expectations. He believes that the company is well-positioned to seize the significant opportunities ahead.
Cash Flows and Other Improvements
The free cash flow witnessed an outflow of $80 Million. The improvement of $16 Million in the year-over-year free cash flow can be attributed to better net income outcomes and favorable working capital.
The company is expecting to see improved profitability in both the near and long-term. This will be achieved through a variety of measures, including ongoing optimization and normalization of the supply chain, pricing actions taken in the Education sector and Corrections business, and the ramping up of new businesses to achieve operational maturity and efficiencies.
Technical Analysis and Prediction of the ARMK Stock Price
At the press time, ARMK stock price is trading at the level of $28.5 after the bulls have taken control of the support level at $24.12. The stock is trading at the supply zone of $31.3 and showing signs of a breakout soon. The RSI has already reached its overbought level of 70, while the 50 and the 150-day EMA are trading below the current market price.
Conclusion
Aramark (NYSE: ARMK) has made some impressive fundamental growth in the last few quarters; the company has generated optimum cash, paid off loans, and also increased the shareholders’ wealth. The current price is looking to give a breakout soon with the indicators in support of a bullish trend.
Technical Levels
Support Levels: $24.1, and $20.9
Resistance Levels: $27.8, and $31.3
Disclaimer
The views and opinions stated by the author, or any people named in this article, are for informational purposes only. They do not establish financial, investment, or other advice. Investing in or trading crypto assets comes with a risk of financial loss.
Andrew is a blockchain developer who developed his interest in cryptocurrencies while his post-graduation. He is a keen observer of details and shares his passion for writing along with being a developer. His backend knowledge about blockchain helps him give a unique perspective to his writing
Source: https://www.thecoinrepublic.com/2023/11/12/armk-stock-price-investors-are-missing-out-on-706-eps/