What Happened?
Shares of uniform rental provider Vestis Corporation (NYSE:VSTS) fell 17.2% in the morning session after the company reported mixed results for its third quarter of 2025, with a significant miss on earnings per share.
While revenue of $712 million grew 4.1% year-over-year and surpassed Wall Street's estimates, profitability metrics disappointed investors. Vestis posted a GAAP loss of $0.10 per share, missing the consensus estimate for a loss of $0.02. Furthermore, the company's adjusted EBITDA, operating margin, and free cash flow margin all declined compared to the same quarter last year. The weaker-than-expected profitability overshadowed the top-line beat, raising concerns about the company's cost structure and sparking a significant sell-off.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Vestis? Access our full analysis report here.
What Is The Market Telling Us
Vestis’s shares are extremely volatile and have had 30 moves greater than 5% over the last year. But moves this big are rare even for Vestis and indicate this news significantly impacted the market’s perception of the business.
The previous big move we wrote about was 11 days ago when the stock gained 8.2% on the news that comments from a key Federal Reserve official hinted at a potential interest rate cut in December.
John Williams, president of the Federal Reserve Bank of New York, signaled he was open to lowering the fed funds rate—the key interest rate that banks charge each other for overnight loans—to support the job market. Speaking at an event, Williams stated that he sees “room for a further adjustment” for interest rates, which immediately shifted market expectations. Following his remarks, the perceived likelihood of an interest rate cut at the Federal Reserve's December meeting flipped from unlikely to more likely than not. The prospect of lower borrowing costs sent a wave of optimism through the markets, leading to a rally in major indices like the S&P 500, Dow Jones Industrial Average, and the Nasdaq Composite.
Vestis is down 63% since the beginning of the year, and at $5.67 per share, it is trading 65.9% below its 52-week high of $16.62 from December 2024. Investors who bought $1,000 worth of Vestis’s shares at the IPO in September 2023 would now be looking at an investment worth $294.29.
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