UniFirst (UNF) has drawn investor focus after filing a preliminary proxy statement urging shareholders to support its current board nominees and to oppose those put forward by activist investor Engine Capital. This proxy contest highlights active debate over the company’s governance direction.

After a year that saw the share price slip by 5.35% so far in 2025, UniFirst’s latest proxy contest comes at a time when momentum looks shaky, with the 1-year total shareholder return down 17.16%. While short-term rallies have appeared, notably a 6.52% jump over the past week, recent price action suggests some renewed speculation, possibly driven by the activist spotlight and shifting governance narrative. Long-term holders have faced lackluster returns, pointing to persistent questions about what will drive a sustained turnaround.

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With shares down for the year and UniFirst’s value indicators flashing only a mild discount to analyst targets, the bigger question remains: is Wall Street underestimating a rebound, or is every ounce of future growth already priced in?

Most Popular Narrative: 2.6% Undervalued

UniFirst's last close of $161.20 sits just below the narrative’s fair value estimate, indicating a mild undervaluation based on forecasted operational improvements and steady growth expectations.

Significant investments in technology, specifically an ERP system, are anticipated to enhance efficiency, leading to improved profitability and reduced operational costs once fully implemented. This should impact net margins positively in the long run.

Curious about what drives this valuation? The narrative leans on ambitious cost-saving innovations and embeds a profit margin forecast that could surprise skeptical investors. See which forward-looking numbers tip the scales in this calculation.

Result: Fair Value of $165.50 (UNDERVALUED)

However, ongoing declines in customer demand and rising healthcare costs could put pressure on UniFirst's margins and challenge the upbeat valuation scenario.

Another View: Is the Multiple Telling the Whole Story?

Some investors focus on UniFirst’s price-to-earnings ratio, currently at 19.7x. This is attractive compared to the industry average of 25.6x and peers at 33.8x. However, it is slightly above its fair ratio of 19.5x, suggesting a limited margin of safety. Does this relative value outweigh the risks if market sentiment shifts?

Build Your Own UniFirst Narrative

If the current viewpoint does not fit your outlook or you prefer to dive deeper into the data yourself, you can shape your own story in just a few minutes. Do it your way

A good starting point is our analysis highlighting 2 key rewards investors are optimistic about regarding UniFirst.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.