EVI Industries, Inc. (EVI Quick QuoteEVI - Free Report) shares have surged 64.3% in the past six months, significantly outpacing the industry's 11.3% growth. The company has outperformed other industry players, including Fastenal Company (FAST Quick QuoteFAST - Free Report) and ClearSign Technologies Corporation (CLIR Quick QuoteCLIR - Free Report) . Shares of FAST posted an increase of 33.5%, while CLIR’s shares declined 25.6% in the same time frame. EVI benefits from strategic acquisitions, strong cash flow, expanded credit capacity, diversified customer base, and steady demand in the commercial laundry sector.

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A Key Look Into EVI’s Business Operations

EVI Industries, headquartered in Miami, FL, is a value-added distributor offering commercial laundry equipment and related services. The company provides planning, design, installation, maintenance, and repair services to a broad customer base, including government, healthcare, hospitality, and industrial sectors across the United States, Canada, the Caribbean and Latin America. Since 2015, it has followed a “buy-and-build” strategy, acquiring complementary businesses and promoting growth through shared expertise, expanded offerings, and stock-based incentives. EVI operates under a single business segment, serving an extensive network of customers with a wide product range and support services.

EVI Industries’ Key Tailwinds

EVI Industries is benefiting from a combination of strategic momentum and operational discipline that continues to strengthen its market position. The company's “buy-and-build” strategy has led to a series of value-accretive acquisitions, including Girbau North America and ASN Laundry Group, each adding to its geographic reach, customer base, and service capabilities. These acquisitions are not merely additive but transformative, enabling deeper market penetration and the preservation of entrepreneurial cultures. By retaining local leadership and empowering teams with autonomy, EVI fosters growth that is both scalable and sustainable.

The company’s financial performance reflects this upward trajectory. Revenues for the nine months ended March 31, 2025, increased to $279.9 million from $263.4 million a year earlier, while net income rose by over 50%, reaching $5.4 million. These improvements were supported by a favorable shift in product mix and efficiencies in operations. Margins held steady despite the inclusion of larger industrial jobs, which typically yield lower gross margins. Recent acquisitions also played a material role in boosting top-line and bottom-line growth, validating EVI’s approach to strategic expansion and operational integration.

In addition to top-line growth, the company has enhanced its financial flexibility. The recent amendment to its credit agreement extended maturity to 2030 and expanded borrowing capacity to $200 million, including a $50 million accordion feature. This increased liquidity enables EVI to continue pursuing high-quality acquisitions without compromising its capital structure. With strong cash flow from operations, the company is well-capitalized to support ongoing investments in infrastructure, technology and workforce expansion.

EVI Industries benefits from steady demand in the commercial laundry sector, driven by institutional, industrial, and government customers that require ongoing replacement, maintenance, and expansion of equipment. The company’s diversified customer base insulates it from dependence on a single segment and provides recurring revenue opportunities through parts, accessories, and technical services. This stability allows EVI to maintain growth momentum, even when individual end-markets face cyclical pressures.

Challenges Persist for EVI’s Business

EVI Industries faces challenges, including elevated selling, general and administrative (SG&A) costs, driven by rent, technology, and acquisition-related spending, which are eroding operating leverage and pressuring margins. The company also risks falling behind in digital transformation as competitors adopt tech-enabled, sustainable service models. Additionally, environmental compliance remains a concern, with potential reputational risks from a lack of transparency on eco-friendly initiatives, all of which could affect competitiveness and future growth.

EVI Industries’ Valuation

The company is cheaply priced compared with the industry average. Currently, EVI is trading at 1.01X trailing 12-month EV/sales value, below the industry’s average of 7.8X. The metric also remains lower than the company’s peers, including Fastenal (7.31X) and ClearSign Technologies (6.13X), suggesting an opportunity for potential investors.

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Conclusion

EVI Industries’ revenue growth is fueled by strategic acquisitions, operational efficiencies, and steady demand in the commercial laundry sector. Improved margins and a 50% rise in net income highlight effective cost control. A $200 million expanded credit facility and strong cash flow enhance financial flexibility, while its buy-and-build model and service diversification support long-term scalability. Despite rising SG&A costs and environmental compliance concerns, EVI remains well-positioned for continued growth.

Strong fundamentals coupled with EVI’s undervaluation present a lucrative opportunity for investors to add the stock to their portfolio.