Earnings quality remains poor, as evidenced by a 2026Q2 OCF/NI ratio of 22.44, indicating that reported net income of $2.6M is not effectively capturing the company's underlying cash-generating capacity.
| Cash from Operations | 149.73M | 64.23M | 471.79M | 256.98M | 232.85M | 244.34M |
| Operating CF Margin % | - | 2.35% | 16.81% | 9.1% | 8.67% | 9.95% |
| Operating CF Growth % | 1529.37% | -86.39% | 83.59% | 10.36% | -4.7% | - |
| Net Income | -17.02M | -40.22M | 20.97M | 213.16M | 141.68M | 74.27M |
| Depreciation & Amortization | 139.11M | 143.02M | 140.78M | 136.5M | 134.35M | 133.31M |
| Stock-Based Compensation | 195K | 11.56M | 16.34M | 14.47M | 17.4M | 15.43M |
| Deferred Taxes | -809K | -13.4M | -19.58M | 14.37M | 20.6M | -615K |
| Other Non-Cash Items | 7.66M | 7.1M | 10.62M | -44.13M | 26.18M | 34.47M |
| Working Capital Changes | 20.6M | -43.83M | 302.69M | -77.39M | -107.37M | -12.53M |
| Change in Receivables | 13.82M | 14M | 215.81M | -40.25M | -94.22M | -20.52M |
| Change in Inventory | 28.42M | -24.37M | 12.99M | 3.6M | -42.86M | -4.01M |
| Change in Payables | 362K | -267K | 21.66M | -32.89M | 31.4M | 10.3M |
| Cash from Investing | -44.28M | -19.82M | -73.64M | -14.75M | -86.13M | -103.16M |
| Capital Expenditures | -52.29M | 0 | -78.91M | -77.87M | -76.45M | -90.14M |
| CapEx % of Revenue | 1.93% | 2.14% | 2.81% | 2.76% | 2.85% | 3.67% |
| Acquisitions | 6.97M | 0 | 0 | 51.87M | -17.2M | -15.77M |
| Investments | - | - | - | - | - | - |
| Other Investing | 174K | -60.26M | 5.27M | -40.61M | 7.52M | 2.75M |
| Cash from Financing | -83.69M | -46.06M | -402.98M | -230.27M | -162.54M | -125.51M |
| Debt Issued (Net) | -81.38M | -30.12M | -370.11M | 1.47B | -28.04M | -29.92M |
| Equity Issued (Net) | 0 | 0 | 0 | 0 | 0 | 0 |
| Dividends Paid | 0 | -13.82M | -19.85M | -1.69B | -134.5M | -95.6M |
| Share Repurchases | 0 | 0 | 0 | 0 | 0 | 0 |
| Other Financing | -2.32M | -2.11M | -13.02M | -13.75M | 0 | 0 |
| Net Change in Cash | 21.53M | -1.26M | -5.04M | 12.31M | -17.37M | 16.77M |
| Free Cash Flow | 97.44M | 5.77M | 392.88M | 179.11M | 156.4M | 154.2M |
| FCF Margin % | 3.6% | 0.21% | 14% | 6.34% | 5.82% | 6.28% |
| FCF Growth % | -64.87% | -98.53% | 119.36% | 14.52% | 1.43% | - |
| FCF per Share | 0.73 | 0.04 | 2.98 | 1.37 | 1.20 | 1.18 |
| FCF Conversion (FCF/Net Income) | -5.72x | -1.60x | 22.50x | 1.21x | 1.64x | 3.29x |
| Interest Paid | 0 | 0 | 0 | 0 | 0 | 0 |
| Taxes Paid | -5.6M | 0 | 0 | 0 | 0 | 0 |
Route density and margin erosion
Based on reported financial statements, VSTS exhibits a significant disconnect between net income and operating cash flow, as evidenced by the 2026Q2 OCF/NI ratio of 22.44, which suggests that reported earnings are currently failing to serve as a reliable proxy for the company's actual cash-generating capacity.
The extreme volatility in the OCF/NI ratio indicates that non-cash charges and working capital fluctuations are heavily distorting the bottom line. Investors should monitor whether this divergence is a temporary byproduct of the spin-off or a structural feature of the company's accounting for textile inventory.
As reported in quarterly filings, VSTS's free cash flow trajectory remains highly inconsistent, swinging from a peak of $267.5M in 2024Q4 to a deficit of $11.0M in 2025Q1, which underscores the difficulty in maintaining stable cash generation amidst ongoing revenue contraction and corporate overhead adjustments.
The erratic nature of FCF margins suggests that the company is struggling to achieve the operational scale necessary to offset its fixed cost base. This instability warrants further investigation into whether the current cash flow profile can support necessary reinvestment without further straining the balance sheet.
According to recent SEC filings, VSTS maintains a capital expenditure to revenue ratio that has fluctuated between 1.4% and 4.1% over the last ten quarters, indicating that a substantial portion of cash is being consumed by the ongoing maintenance of its industrial laundry infrastructure and delivery fleet.
The consistent level of CAPEX relative to revenue suggests that the company is locked into a high-maintenance model that limits its ability to pivot toward more capital-efficient growth. Analysts should assess if these expenditures are sufficient to modernize the fleet or merely keeping pace with asset depreciation.
Based on the provided cash flow data, VSTS has experienced dramatic swings in working capital, including a $258.2M inflow in 2024Q4 followed by a $37.7M outflow in 2025Q1, which complicates the assessment of the company's underlying efficiency in managing receivables and inventory cycles.
These large, non-linear movements in working capital suggest that the company's cash flow is highly sensitive to timing differences in collections and inventory management. Such volatility may indicate that the business lacks the predictable cash conversion cycle typical of more mature, route-based service providers.
Quick answers to the most common questions about buying VSTS stock.
Vestis Corporation (VSTS) generated $64.2M in net cash from operating activities in 2025. This reflects the cash generated directly from core business operations.
Vestis Corporation (VSTS) generated $5.8M in free cash flow in 2025. Free cash flow is the cash left over after capital expenditures, which can be used to pay dividends, repurchase shares, or pay down debt.
Vestis Corporation (VSTS) spent $0.0M on capital expenditures in 2025. CapEx represents the cash invested in physical assets like property, plant, and equipment to maintain or grow the business.
In 2025, Vestis Corporation (VSTS) returned $13.8M to shareholders via cash dividends. This shows the company's commitment to returning capital to its equity investors.