UNIFIRST CORPORATION (UNF): what the price assumes
In the published model solve dated 2026-Q2, anchored at $281.88, UNIFIRST CORPORATION (UNF) is priced for +5.5% growth. boothcheck publishes no house fair value, target price, or buy/sell rating; individual model outputs and user-controlled scenarios are analytical inputs, not Boothcheck targets. Narrative composed 2026-06-28.
Generated: 2026-08-30 · Source: https://boothcheck.com/report/UNF
Headline
| Field | Value |
|---|---|
| Ticker | UNF |
| Company | UNIFIRST CORPORATION |
| Current price | $281.88/sh |
| Composition | Uniform & Facility Service Solutions 91% / First Aid & Safety Solutions 5% / Other 4% |
What The Price Assumes (Inversion)
The assumption today's price embeds, recovered by inverting the valuation.
| Field | Value |
|---|---|
| Inversion basis | whole-company |
| Operating margin (value-band context) | 5.7% |
| Operating margin (mid-cycle) | 13.0% |
| Margin compression (value-band) | -7.3pp |
| Trailing margin (depressed year) | 5.8% |
| Implied growth | 5.5% |
| Multiple paid | 16x mid-cycle operating income |
The operating-margin figure is value-band context at year 12: derived from the framework's value band, a separate calculation — not part of the priced-in solve.
Solve inputs: computed at a 8.7% cost of capital with 4% terminal growth over a 5-year stage.
How unusual the bet is: within-range (limited comparison data)
| Reference | Value |
|---|---|
| vs own history | +0.07σ |
| cohort percentile (of 212 peers) | 42 |
Valuation X-Ray
Every valuation family lands below the price. The price therefore sits beyond what those standard frames encode.
How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.
| Family | Median price/FV | Models | Reads |
|---|---|---|---|
| Asset | 4.91x | 4 | expensive |
| Earnings | 5.81x | 4 | expensive |
| Relative | — | 0 | — |
| Growth | 1.47x | 3 | expensive |
Families that call it expensive: Asset, Earnings
The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 8.9%); the inversion above states its own rate.
Per-Model Detail (n=11)
| Model | Family | FV | Price/FV | Applicable | Methodology |
|---|---|---|---|---|---|
| DCF Perpetual Growth | Growth | $52.12 | 5.41x | yes | FCF base $0.1B, growth 1% (input: historical growth), terminal g 1.5%, WACC 8.9%, 5yr projection |
| DCF Exit Multiple | Growth | $213.99 | 1.32x | yes | Exit EV/EBITDA: 16.8x / 18.8x / 20.8x (bear / base = today's held flat / bull), 5yr |
| Relative Valuation | Relative | — | — | no | P/E 25.88x (blended: static sector reference 18x + trailing (TTM) 44x), scenarios: 21.8x / 25.9x / 30.0x (bear / base = reference held flat / bull), EV/EBITDA 14.03x |
| Simple DDM | Growth | — | — | no | — |
| Two-Stage DDM | Growth | — | — | no | — |
| Simple Excess Return | Asset | $68.87 | 4.09x | yes | BV/sh $120.94, ROE (TTM) 5.3%, ke 9.3% |
| Two-Stage Excess Return | Asset | $49.20 | 5.73x | yes | 5yr excess ROE then converge to ke=9.3% |
| Discounted Future Market Cap | Growth | $191.28 | 1.47x | yes | Rev $2.5B, growth 1% (input: historical growth; tapered), Terminal P/S: 1.7x / 2.1x / 2.4x (bear / base = today's held flat / bull, cap 8x) |
| Growth-Adjusted P/E | Relative | — | — | no | — |
| Margin Trajectory | Growth | — | — | no | — |
| Earnings Power Value | Earnings | $64.73 | 4.35x | yes | Normalized EBIT (5y avg op income, one-time charges added back) $0.16B × (1−19%) / WACC 8.9% → EPV (no growth) |
| Residual Income | Asset | $46.88 | 6.01x | yes | BV $120.94 + 5yr PV of (ROE (TTM) 5.3% − Kₑ 9.3%) × BV; BV grows 3.4%/yr |
| Graham Number | Asset | $131.35 | 2.15x | yes | √(22.5 × EPS $6.34 × BVPS $120.94) — Graham's conservative floor |
| EV/EBITDA Relative | Relative | — | — | no | EBITDA $0.29B × sector EV/EBITDA 12.0x |
| FCF Yield | Earnings | $38.81 | 7.26x | yes | FCF $88.3M / Kₑ 9.3% — zero-growth perpetuity |
| SBC-Adj FCF Yield | Earnings | $31.20 | 9.03x | yes | SBC-adj FCF $0.08B (FCF $0.09B − SBC $0.01B) capitalized at Kₑ |
| Ben Graham Formula | Earnings | $5.31 | 53.08x | yes | EPS $6.34 × (8.5 + 2×-5.0%) × (4.4 / 5.3%) (excluded from median) |
| ROIC-Justified P/B | Asset | $10.46 | 26.95x | yes | BV $120.94 × (ROIC 0.8% / WACC 8.9%) (excluded from median) |
| P/Sales Sector | Relative | — | — | no | Revenue $2.49B × sector P/S 2.5x |
| PEG Fair Value | Relative | — | — | no | — |
| Earnings Yield | Earnings | $68.54 | 4.11x | yes | EPS $6.34 / required return 9.3% (Rf 4.3% + ERP 5.0%) |
| Funds From Operations Multiple | Relative | — | — | no | — |
| Clinical Phase NPV | Growth | — | — | no | — |
| Merton | Asset | — | — | no | — |
| V5 Mechanical | — | — | — | no | — |
Economic-Unit Decomposition (Sum Of The Parts)
One or more material disclosed units has unresolved economics. Unknown/general is not evidence of homogeneity: segment SOTP is primary but incomplete, consolidated cash flow may remain only a secondary cross-check when every unit shares an enterprise basis, and one sector multiple or target margin is withheld.
| Unit | Role | Valuation basis | Revenue | Reported profit | Value evidence | Status |
|---|---|---|---|---|---|---|
| Uniform & Facility Service Solutions | operating | enterprise | $2.2b | $168.5m operating-income | withheld | unresolved no unit value |
| First Aid & Safety Solutions | operating | enterprise | $114.6m | $853k operating-income | withheld | unresolved no unit value |
| Other | operating | enterprise | $99.2m | $15.1m operating-income | withheld | unresolved no unit value |
No total common-equity value is stated. One or more material units lack a supported unit value. The displayed values are an indicative subtotal; consolidated debt and cash cannot be applied to a fraction of the company.
Solvency
| Field | Value |
|---|---|
| Net cash | $168.9m |
| Net debt / NOPAT (after-tax) | -0.64x (net cash) |
| Net debt / operating income (pre-tax) | -0.52x (net cash) |
| Share count CAGR (buyback) | -0.9% |
| Burning cash | no |
Leverage and coverage are computed on normalized mid-cycle operating income (mid-cycle margin 13.0%); the trailing year was depressed.
Interest expense is not separately reported in the latest filings, so interest coverage cannot be computed.
Bullet Takeaways
- UniFirst rents, cleans, and delivers work uniforms and facility-service products on recurring routes, a subscription-like model its 10-K describes as renting and selling industrial wiping products, floor mats, facility service products and other non-garment items alongside the core uniform programs.
- Profitability is in a deliberate dip: fiscal 2026 reflects what management calls a temporary step back as the company invests in sales, service, and digital systems and absorbs new tariffs, with GAAP EPS guided to about $6.78 at the midpoint.
- The balance sheet is the cushion: UniFirst carries about $157 million of net cash, no gross debt, and a share count that has edged down, so it can fund the investment cycle without leaning on lenders.
Bull Case
Read UniFirst as what it is, a mature route-based services business, and the current numbers read differently than they first appear. A mature compounder's value lives in the recurring revenue and the returns on capital across a full cycle, not in a single depressed quarter. The model is the kind that compounds quietly: the company rents and cleans uniforms and facility products and delivers them on fixed routes, and its 10-K lists the breadth, from industrial wiping products, floor mats, facility service products to restroom and cleaning supplies and first aid cabinet services. Once a customer is on a route, the relationship renews, the truck is already passing the door, and each incremental product rides the same delivery cost. That is the economics of route density, and it is why this category rewards scale.
The margin compression that makes the trailing numbers look weak is self-inflicted and, by management's own framing, temporary. Fiscal 2026 carries a temporary step back in profitability as the company prioritizes building a foundation for future growth, investing in sales, service, and digital transformation while absorbing newly imposed tariffs. The trailing operating margin near 6.8% sits well below the low-teens this business has demonstrated through-cycle, and Q3 fiscal 2026 already showed the underlying margin running near 8.1% with a GAAP EPS beat at $2.23 against a $2.07 estimate. A mature business spending on its own systems is choosing lower reported earnings now for a more efficient operation later, and the cash flow funds it without strain.
The balance sheet is the part that lets management make that choice. UniFirst holds about $157 million of net cash, carries no gross debt, and earns interest coverage that is effectively unconstrained, with a share count that has drifted down about 1% a year. Book value sits near $120 a share. A debt-free company sitting on net cash can run an investment cycle on its own dime, return capital, and wait out the tariff noise without the financing risk that would pressure a leveraged peer. The bull case for a mature name like this is not a growth story. It is that the franchise economics are intact, the margin dip is a chosen investment rather than a competitive loss, and the balance sheet removes the one thing that turns a temporary setback into a permanent one.
Bear Case
The external variables with the most leverage on UniFirst right now are macro and policy, and both are pointing the wrong way. The company has flagged newly imposed tariffs as a direct drag, because it manufactures and sources garments, and tariff costs land in the same cost line that route density is supposed to leverage. Tariffs are outside management's control, they raise the cost of the very product the business rents, and they arrive precisely as the company is also spending on digital transformation, so two cost pressures stack at once. The result is the guided fiscal 2026 GAAP EPS of about $6.78 at the midpoint, a step down that fell well short of where analysts had been modeling.
The demand side carries its own cyclicality. Uniform rental volume tracks employment in the industrial, manufacturing, and service economy, because the number of uniformed workers is the number of garments on route. When hiring slows or a recession trims payrolls, the route revenue contracts with the workforce, and Q3 fiscal 2026 revenue of $614.4 million was already down 4% year over year. A business whose top line moves with its customers' headcount is a leveraged bet on the labor cycle, and the current revenue direction is down.
The valuation leaves little room for that combination. On trailing earnings depressed by the investment cycle, the asset and earnings-power methods land far below the price, and even the forward-growth methods do not fully reach it. The price is paying for the margin to recover to its through-cycle level and for the digital investment to pay off, neither of which is guaranteed on the current timeline. If the recovery to low-teens margins slips a year, or tariffs prove sticky, the earnings that justify the price arrive later and smaller. The balance sheet bounds the downside, with net cash and no debt meaning there is no solvency risk to speak of. The bear is not about survival. It is about paying a full price today for a margin recovery that the macro and policy backdrop can push further out than the market is assuming.
Valuation
The price is making a margin-recovery bet, and naming it that way is the key to reading the methods correctly. Inverting today's price of about $261 (June 28, 2026) implies the business needs to earn an operating margin near the mid-single digits with modest growth, which is close to what it earns today on depressed numbers and well below the low-teens it has shown through-cycle. So the bet is not heroic growth; it is that the current margin trough is temporary and reverts. That framing matters because the static methods, run on trailing earnings, look alarming in isolation.
Group the methods and the picture is dominated by the depressed trailing margin. The asset-based and earnings-power methods land far below the price, with normalized earnings power near $64 and the simple excess-return method near $81, because they capitalize a return on equity of about 6.2% that reflects the investment-cycle dip rather than the business's normal economics. The relative-multiple methods land in the high $100s to low $200s, with the EV/EBITDA-relative approach near $191 and the price-to-sales method actually above the price at about $340 on the sector multiple. The forward methods, the exit-multiple cash flow and the discounted future market cap, land near $173 to $203. The honest read is that on trailing depressed earnings no single family reaches the price, but the spread is an artifact of measuring a margin trough; on the through-cycle margin near the low teens the same methods move up materially.
The balance sheet is the floor and it is a sturdy one. UniFirst carries about $157 million of net cash and no gross debt, so the downside is bounded by a clean capital structure, and the company can self-fund the investment cycle without raising money on unfavorable terms. The cohort the screen routes to is a poor proxy for a uniform-rental franchise, whose true comparison is the small set of route-based facility-services operators; the relevant point against that real cohort is that scale and route density set the margin ceiling, and UniFirst sits below the category leader on margin even at its through-cycle level. What the buyer is underwriting is the timing of the margin recovery, with a debt-free balance sheet removing the financing risk but not the risk that the recovery simply takes longer than the price assumes.
Catalysts
The near-term catalyst is the fiscal third-quarter 2026 report and the margin trajectory it confirmed. Revenue came in at $614.4 million, down 4% year over year but a slight beat, with an operating margin near 8.1% and GAAP EPS of $2.23 ahead of the $2.07 estimate, a 7.3% beat. The headline that moved sentiment was the forward guidance: fiscal 2026 GAAP EPS guided to roughly $6.78 at the midpoint, well below where analysts had modeled, with management characterizing the year as a temporary step back as it invests in sales, service, and digital transformation and absorbs new tariffs.
The two live variables behind that guidance are the digital-transformation spend and the tariff impact. The first is discretionary and self-imposed, so the question is execution and payback timing; the second is policy-driven and outside the company's control, so the question is duration and whether costs can be passed through. Both feed directly into whether the margin returns to its through-cycle level on the assumed schedule.
The catalysts to watch are the sequential operating-margin prints, which signal whether the investment cycle is nearing its trough, and any update on tariff pass-through and route-level pricing. Revenue direction matters too, because the 4% decline ties to customer headcount and the broader labor cycle; a stabilization there would confirm that the weakness is margin-timing rather than demand erosion.
Peer Cohorts (Per Segment, With Filing Citations)
Uniform & Facility Service Solutions (reported)
- CTAS (Cintas Corporation)
- FY2025 10-K: . Business Segments Cintas' reportable operating segments are the Uniform Rental and Facility Services operating segment and the First Aid and Safety Services operating segment. The Uniform Rental and Facility Services reportable operating segment consists of the rental and servicing of uniforms and other garments,…
- FY2025 10-K: …as fulfillment activities and are recorded in both revenue and cost of sales at the time control is transferred to the customer. Certain of our customer contracts include pricing terms and conditions that include components of variable consideration. The variable consideration is typically in the form of…
- ARMK (Aramark)
- FY2025 10-K: …and distribution of our Aramark Uniform and Career Apparel ("Uniform") segment into an independent publicly traded company, Vestis Corporation ("Vestis"). The separation of our Uniform segment was structured as a tax free spin-off, which occurred by way of a pro rata distribution to Aramark stockholders. Each of the…
- FY2025 10-K: …growth by collaborating across the sectors and services in which we operate to deliver differentiated value and innovative solutions. Our consistent tools, methodologies and trainings to efficiently support the development of our employees as they work within our individual businesses to help ensure a close…
- VSTS (Vestis Corp)
- FY2025 10-K: …in the demand for our services and products not being specifically linked to the cyclical nature of any one sector. The vast majority of our customers are served under multi-year contracts. While customers are not required to make an up-front investment for their rental uniforms or other rented merchandise, a rental…
- FY2025 10-K: …audits. 7 Table of Contents Our Competitive Advantages We believe we have significant competitive advantages including our full-service uniform solution offering, size and scale, extensive network footprint and long-tenured customer relationships. Given our robust capabilities, scale and talent, we are well…
- ABM (ABM INDUSTRIES INCORPORATED)
- FY2025 10-K: …support services to airlines and airports, including parking and transportation management, janitorial and maintenance services, passenger assistance, catering logistics, aircraft cabin maintenance, and transportation solutions. We typically provide services to clients in this segment under master services…
- FY2025 10-K: …or airplane cabins cleaned). Hourly In hourly arrangements, the client is billed a fixed hourly rate for each labor hour provided. Management Reimbursement Under these parking arrangements, we manage a parking facility for a management fee and pass through the revenue and expenses associated with the facility to the…
First Aid & Safety Solutions / Other (reported)
- CTAS (Cintas Corporation)
- FY2025 10-K: …in the First Aid and Safety Services reportable operating segment and All Other. Cost of other includes inbound freight charges, purchasing and receiving costs, inspection costs, warehousing costs, service costs and other costs of distribution. Selling and administrative expenses. Selling and administrative expenses…
- FY2025 10-K: . Business Segments Cintas' reportable operating segments are the Uniform Rental and Facility Services operating segment and the First Aid and Safety Services operating segment. The Uniform Rental and Facility Services reportable operating segment consists of the rental and servicing of uniforms and other garments,…
- VSTS (Vestis Corp)
- FY2025 10-K: …in the demand for our services and products not being specifically linked to the cyclical nature of any one sector. The vast majority of our customers are served under multi-year contracts. While customers are not required to make an up-front investment for their rental uniforms or other rented merchandise, a rental…
- FY2025 10-K: …sense of team and belonging among employees, project a professional image and enhance brand awareness. • Our uniforms are reusable and can be assigned to another employee (rather than being discarded) when employees transition to new opportunities. • We offer a variety of specialty garments that help customers: ◦…
- ARMK (Aramark)
- FY2025 10-K: …hospitals and senior living), our clients provide us with a captive customer base through their on-site employees, students and patients. At sports, entertainment and recreational facilities, our clients attract patrons to their site, usually for specific events such as sporting events, concerts and conventions. We…
- FY2025 10-K: …food, food-related and facility support services to approximately 170 healthcare and senior living client families and more than 920 facilities . Our food and food-related services include patient food and nutrition, retail food, environmental services and procurement services. Business & Industry . We provide a…
- ABM (ABM INDUSTRIES INCORPORATED)
- FY2025 10-K: …support services to airlines and airports, including parking and transportation management, janitorial and maintenance services, passenger assistance, catering logistics, aircraft cabin maintenance, and transportation solutions. We typically provide services to clients in this segment under master services…
- FY2025 10-K: …leadership capabilities across the enterprise. Our online training platform, ABM University, provides employees access to a wide range of on-demand courses and development resources. Frontline employees also receive role-specific, on-the-job training to ensure safe, efficient, and high-quality service delivery for…
Methodology Note
- Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
- Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
- Economic-unit decomposition (SOTP): each disclosed business unit is assigned its native valuation basis before any multiple is applied. Operating units are valued on enterprise value; funded financial units are valued on their own common equity, because their borrowings fund earning assets rather than levering the parent. A company total is stated only once every material unit carries a supported value and the parent capital bridge reconciles.
- Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
- Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.
Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.
Sources
UNF Q3 FY2026 earnings release, July 2026 · UNF Q3 FY2026 deep-dive, July 2026