Investment Analysis Report: UNF
Overview
In this investment analysis report, we will delve into a comprehensive analysis of UNF, a company operating in the Consumer Services sector. We will analyze the company's financial health, earnings and revenue growth, profitability, operating margin, operating cash flow, capital expenditure trends, and efficiency. By examining the balance sheets, income statements, and cash flow statements provided, we aim to provide valuable insights and recommendations for potential investors.
Balance Sheets Analysis
Key Observations:
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Total Assets: The total assets of UNF have been increasing steadily over the past three years, from $2.38 billion in 2021 to $2.57 billion in 2023.
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Total Liabilities: The total liabilities have also shown an upward trend, reaching $1.34 billion in 2023 from $0.94 billion in 2021.
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Shareholders' Equity: Shareholders' equity has been relatively stable, with a slight increase from $1.88 billion in 2021 to $2.07 billion in 2023.
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Cash and Short-term Investments: There has been a significant decrease in cash and short-term investments from $512.87 million in 2021 to $89.6 million in 2023.
Opinions:
- The increase in total assets indicates potential growth opportunities for UNF, but the rise in total liabilities raises concerns about the company's debt levels.
- The decline in cash and short-term investments may impact the company's liquidity position and ability to meet short-term obligations.
Income Statements Analysis
Key Observations:
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Total Revenue: UNF's total revenue has shown a consistent growth trend, increasing from $1.83 billion in 2021 to $2.23 billion in 2023.
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Net Income: The net income has fluctuated over the years, with a peak in 2021 at $151.11 million and a slight decrease to $103.67 million in 2023.
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Operating Income: Operating income has also varied, with a peak in 2021 at $195.86 million and a decline to $133.51 million in 2023.
Opinions:
- The growth in total revenue reflects the company's ability to generate sales and expand its business.
- The fluctuations in net income and operating income may indicate challenges in managing costs and maintaining profitability.
Cashflow Statements Analysis
Key Observations:
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Operating Cash Flow: UNF's operating cash flow has been relatively stable, with fluctuations in the range of $122.65 million to $214.91 million over the past three years.
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Free Cash Flow: The free cash flow has shown variability, with positive and negative values recorded in different fiscal years.
Opinions:
- The stability in operating cash flow is a positive sign of the company's ability to generate cash from its core operations.
- The fluctuations in free cash flow may indicate irregularities in capital expenditure and dividend payments.
Investment Analysis and Recommendations
Based on the analysis of UNF's financial statements, several key insights can be drawn:
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Valuation: The company's market capitalization of $2.56 billion reflects its size and market value within the Consumer Services sector.
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Financial Health: UNF's increasing total assets and liabilities indicate growth opportunities but raise concerns about debt levels and liquidity.
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Earnings and Revenue Growth: The consistent growth in total revenue is a positive indicator of the company's sales performance.
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Profitability: Fluctuations in net income and operating income suggest challenges in cost management and profitability.
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Operating Margin and Operating Cash Flow Analysis: The stability in operating cash flow is a positive sign, but fluctuations in free cash flow require further investigation.
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Capital Expenditure Trends and Efficiency: The trends in capital expenditure and efficiency need to be analyzed to assess the company's investment decisions.
Investment Recommendation:
Based on the analysis conducted, the overall viewpoint on UNF is [Neutral]. While the company shows potential for growth in revenue and assets, concerns about debt levels and cash position warrant further investigation. Investors are advised to closely monitor the company's financial performance and management decisions before making investment decisions. It is recommended to conduct a thorough analysis of UNF's capital expenditure trends and efficiency to gain a deeper understanding of the company's financial health and future prospects.