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Is VSTS a good stock to buy? We came across a bullish thesis on Vestis Corporation on Valueinvestorsclub.com by dman976. In this article, we will summarize the bulls’ thesis on VSTS. Vestis Corporation's share was trading at $9.57 as of April 29th. VSTS’s trailing P/E was 17.49 according to Yahoo Finance.

Copyright: bialasiewicz / 123RF Stock Photo

Vestis Corporation (VSTS) is a post-spin uniform and workplace services provider operating in a ~$48B fragmented North American B2B market, competing with Cintas and UniFirst in a recurring, contract-based model. Since its October 2023 spin from Aramark, Vestis Corporation has experienced earnings misses, low-single-digit revenue declines, and EBITDA margin compression from ~19.2% to ~10%, driving a ~60% stock decline from ~$20 to ~$7.70.

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Activist pressure from Corvex Management led to board changes and the appointment of CEO Jim Barber, formerly of UPS, who has launched a turnaround focused on service recovery, pricing discipline, and ~$75M of cost savings through restructuring and workforce optimization. Early progress includes improving on-time delivery, reduced customer complaints, and lower churn, supported by a recurring revenue base above 90% and meaningful cross-sell opportunities across uniforms, mats, restroom, and safety services that can materially lift margins.

Vestis Corporation trades at ~7.7x FY26 EBITDA of $301M, which appears overly conservative given expected margin expansion toward low-teens levels, improving free cash flow, and a potential beat-and-raise trajectory as operational execution stabilizes. With optionality from asset sales, deleveraging, and continued execution, the stock could re-rate toward ~$13.80 over 12 months, based on ~$365M 2H26 EBITDA at 8.5x, as fundamentals and investor confidence improve with asymmetric upside skew.

Previously, we covered a bullish thesis on Kelly Services, Inc. (KELYA) by Unemployed Value Degen and Value Don’t Lie in April 2025, which highlighted business transformation, margin expansion, and undervaluation. KELYA’s stock price has depreciated by 26.43% since our coverage. dman976 shares a similar view but emphasizes Vestis Corporation’s (VSTS) operational turnaround and activist-led restructuring in related B2B services industry.

Vestis Corporation is not on our list of the 40 Most Popular Stocks Among Hedge Funds. As per our database, 30 hedge fund portfolios held VSTS at the end of the fourth quarter which was 27 in the previous quarter. While we acknowledge the risk and potential of VSTS as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than VSTS and that has 10,000% upside potential, check out our report about this cheapest AI stock.

Disclosure: None.