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Service Corporation International (SCI)
NYSE:SCI
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Service International
(NYSE:SCI)
Rating:70Outperform
Price Target:
$84.00
▲(10.08%Upside)
Positive Factors
Financial Performance
The average daily visitations at Service Corp.’s (SCI) locations grew 13% sequentially, better than the historical trends.
Growth Outlook
Analyst maintains a Buy rating given solid cash flows, capital deployment upside, and an attractive long-term growth outlook driven by aging demographics.
Regional Growth
Robust month-over-month growth driven by Texas, Florida, and Illinois.
Negative Factors
Location Specific Decline
Visitations/day at Rose Hills (SCI’s largest location) declined -12% m/m in June, following a -5.1% decline m/m in May.
Regional Performance
Visitations per day at Rose Hills declined 8% month-over-month in May, worse than 1% year-over-year for all SCI’s locations.
Visitation Trends
Average daily visitations at Service Corp.’s (SCI) locations declined 14% sequentially in June, worse than historical.
Service International (SCI) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$10.83B
Dividend Yield1.62%
Average Volume (3M)931.39K
Price to Earnings (P/E)21.0
Beta (1Y)0.58
Revenue Growth2.65%
EPS Growth7.42%
CountryUS
Employees25,000
SectorConsumer Cyclical
Sector Strength66
IndustryPersonal Products & Services
Share Statistics
EPS (TTM)0.88
Shares Outstanding142,358,490
10 Day Avg. Volume1,230,685
30 Day Avg. Volume931,391
Financial Highlights & Ratios
PEG Ratio8.15
Price to Book (P/B)6.60
Price to Sales (P/S)0.00
P/FCF Ratio16.60
Enterprise Value/Market Cap1.42
Enterprise Value/Revenue0.91
Enterprise Value/Gross Profit13.70
Enterprise Value/Ebitda3.32
Forecast
1Y Price Target
$90.67Price Target Upside18.82% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering4
Service International Business Overview & Revenue Model
Company DescriptionService Corporation International (SCI) is a leading provider of deathcare products and services in North America. The company operates in the funeral and cemetery services sector, delivering comprehensive solutions that include funeral planning, cremation, and cemetery property management, alongside related merchandise such as caskets, urns, and memorials. SCI's network comprises a wide range of funeral homes and cemeteries, catering to diverse cultural and community needs.
How the Company Makes MoneySCI generates revenue primarily through the provision of its core funeral and cemetery services. The company earns money from the sale of funeral products and services, including embalming, use of facilities for visitation and services, transportation, and cremation services. Additionally, SCI capitalizes on pre-need sales, where customers pay in advance for future funeral and cemetery services, which secures a steady cash flow and reduces future financial uncertainty. The sale of cemetery property, such as burial plots and mausoleums, also constitutes a significant revenue stream. Furthermore, SCI has established partnerships with various insurance companies to offer funeral insurance policies, contributing to its earnings. These strategic partnerships, along with a strong brand presence and extensive service network, are key factors in the company's financial performance.
Service International Earnings Call Summary
Earnings Call Date:Jul 30, 2025
(Q2-2025)
| % Change Since: 0.90%|
Next Earnings Date:Oct 29, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mix of positive and negative aspects. Highlights included growth in earnings per share, funeral revenue, and preneed cemetery sales production, as well as strong cash flow and liquidity. However, challenges were noted in the form of decreased preneed funeral sales production, a decline in cemetery gross profit, and higher corporate expenses.Q2-2025 Updates
Positive Updates
Increase in Adjusted Earnings Per Share
The company reported adjusted earnings per share of $0.88, an 11% increase from the prior year period.
Funeral Revenue Growth
Total comparable funeral revenue increased by $15 million, or 3%, due to solid growth from both core revenue and core general agency revenue.
Cemetery Sales Production Increase
Comparable preneed cemetery sales production increased by almost $19 million, or over 5%, driven by healthy increases in large sales and core sales.
Positive Cash Flow and Capital Distribution
The company generated adjusted operating cash flow of $168 million and returned $239 million to shareholders through dividends and share repurchases.
Strong Liquidity Position
The company ended the quarter with $1.4 billion in liquidity, including $250 million in cash and $1.2 billion available on a credit facility.
Negative Updates
Decrease in Preneed Funeral Sales Production
Preneed funeral sales production decreased by $29 million, or 9%, primarily due to the transition to a new preneed insurance provider.
Decline in Cemetery Gross Profit
Cemetery gross profit decreased by $4 million, and the gross profit percentage declined by 110 basis points.
Higher Corporate G&A Expenses
Corporate G&A expenses increased due to legal charges, higher insurance costs, and timing of incentive compensation accruals.
Lower Recognition Rate in Cemetery Revenue
Recognized preneed cemetery revenue declined due to lower recognition rates on new construction compared to the prior year.
Company Guidance
In the second quarter of 2025, SCI reported an adjusted earnings per share of $0.88, marking an 11% increase from the previous year's $0.79. Funeral revenue grew impressively by over $15 million, or 3%, driven by a 3.3% increase in core average revenue per service. Despite a 1.5% decrease in core funeral services performed, gross profit surged by $15 million, with a 210 basis point improvement in gross profit percentage. Cemetery revenue saw a modest $2 million increase, with preneed cemetery sales production rising by $19 million, or over 5%. However, cemetery gross profit declined by $4 million due to higher selling compensation, despite a 1% growth in fixed costs. SCI maintained its normalized earnings per share guidance of $3.70 to $4 for 2025 and raised its cash flow outlook, expecting adjusted operating cash flow between $880 million and $940 million, supported by stronger working capital trends and anticipated lower cash taxes.Service International Financial Statement Overview
Summary
Service International shows a solid financial performance with robust profitability and strong cash flow generation. Despite high leverage, the company effectively uses equity to deliver strong returns. The financial stability is well supported by healthy cash flow metrics.Income Statement
Service International has demonstrated solid financial performance in the TTM period, with a Gross Profit Margin of 26.28% and a Net Profit Margin of 14.97%. The Revenue Growth Rate from the previous year to TTM is 2.16%, indicating steady growth. Additionally, the EBIT Margin is strong at 22.43%, and the EBITDA Margin is 28.44%, reflecting robust operational efficiency. The company shows consistent profitability with healthy margins.85
Very Positive
Balance Sheet
The company's balance sheet reveals a Debt-to-Equity Ratio of 2.92, indicating a relatively high level of leverage. However, the Return on Equity (ROE) is 38.23%, which is impressive and indicates effective use of equity to generate profits. The Equity Ratio stands at 9.54%, which suggests a lower proportion of equity financing relative to assets, highlighting potential risks associated with high leverage.70
Positive
Cash Flow
In terms of cash flow, Service International has a Free Cash Flow Growth Rate of 16.65% from the previous year to TTM, showcasing strong cash generation capability. The Operating Cash Flow to Net Income Ratio is 1.64, and the Free Cash Flow to Net Income Ratio is 1.03, indicating good cash flow coverage of net income, reflecting a solid financial position in terms of liquidity.78
Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 4.25B | 4.19B | 4.10B | 4.11B | 4.14B | 3.51B |
| Gross Profit | 1.12B | 1.09B | 1.09B | 1.15B | 1.32B | 976.83M |
| EBITDA | 940.72M | 1.26B | 1.26B | 1.27B | 1.44B | 1.09B |
| Net Income | 718.65M | 518.65M | 537.32M | 565.34M | 802.94M | 515.91M |
Balance Sheet | ||||||
| Total Assets | 17.98B | 17.38B | 16.36B | 15.07B | 15.69B | 14.52B |
| Cash, Cash Equivalents and Short-Term Investments | 255.39M | 218.77M | 221.56M | 191.94M | 268.63M | 230.86M |
| Total Debt | 5.04B | 4.92B | 4.80B | 4.34B | 3.97B | 3.83B |
| Total Liabilities | 16.42B | 15.70B | 14.81B | 13.39B | 13.78B | 12.76B |
| Stockholders Equity | 1.56B | 1.68B | 1.54B | 1.67B | 1.91B | 1.75B |
Cash Flow | ||||||
| Free Cash Flow | 631.06M | 555.80M | 507.25M | 456.02M | 616.95M | 582.14M |
| Operating Cash Flow | 1.01B | 944.91M | 869.04M | 825.73M | 920.61M | 804.35M |
| Investing Cash Flow | -576.36M | -620.95M | -469.39M | -447.88M | -414.93M | -318.37M |
| Financing Cash Flow | -347.50M | -319.64M | -381.14M | -448.00M | -465.62M | -492.78M |
Service International Technical Analysis
Negative
76.31
Price Trends
78.79
Negative
78.31
Negative
79.16
Negative
Market Momentum
-1.03
Positive
38.62
Neutral
15.24
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SCI, the sentiment is Negative. The current price of 76.31 is below the 20-day moving average (MA) of 78.82, below the 50-day MA of 78.79, and below the 200-day MA of 79.16, indicating a bearish trend. The MACD of -1.03 indicates Positive momentum. The RSI at 38.62 is Neutral, neither overbought nor oversold. The STOCH value of 15.24 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for SCI.
Service International Risk Analysis
Service International disclosed 25 risk factors in its most recent earnings report. Service International reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Service International Peers Comparison
Overall Rating
UnderperformOutperform
Sector (67)
Financial Indicators
Performance Comparison
SCI
Service International
76.31
4.03
5.58%
CSV
Carriage Services
44.92
14.20
46.22%
Service International Corporate Events
Executive/Board ChangesShareholder Meetings
Service International Shareholders Approve Key Proposals
Positive
May 9, 2025
On May 6, 2025, Service Corporation International held its annual meeting of shareholders where three proposals were voted on. The shareholders elected ten directors, approved PricewaterhouseCoopers LLP as the company’s registered public accounting firm for fiscal 2025, and supported the executive officer compensation plan. These decisions are likely to impact the company’s governance and financial oversight positively, aligning with shareholder interests and potentially enhancing the company’s market position.
Stock BuybackDividends
Service International Boosts Share Repurchase Program
Positive
May 6, 2025
On May 6, 2025, Service Corporation International announced a quarterly cash dividend of thirty-two cents per share, payable on June 30, 2025, to shareholders of record as of June 13, 2025. Additionally, the company increased its share repurchase program by approximately $528 million, bringing the total authorization for share repurchases to $600 million, reflecting a strategic move to enhance shareholder value.
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.