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Service Corporation International (SCI)
NYSE:SCI
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Service International
(NYSE:SCI)
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Rating:68Neutral
Price Target:
$92.00
▲(14.80% Upside)
The score is driven primarily by healthy operating performance and dependable cash generation, but constrained by a highly leveraged balance sheet and some recent margin/free-cash-flow pressure. Technicals are constructive (price above key moving averages with positive MACD), while valuation is moderately demanding (P/E ~22.7) with a modest dividend. Earnings-call guidance and sentiment were supportive, highlighting steady 2026 growth targets and liquidity improvements, tempered by volume and margin risks.
Positive Factors
Stable cash generation
Consistent operating cash flow and positive free cash flow provide durable internal funding for maintenance capex, cemetery development, small acquisitions, and shareholder returns. This steady cash generation cushions the business against cyclical demand shifts and supports multi-year capital allocation priorities.
Preneed sales momentum & cemetery margin expansion
Rising preneed sales increase booked revenue visibility and create durable future cash flows; cemetery gross profit and margin expansion reflect high-return development opportunities. Together these trends strengthen recurring revenue and improve long-term returns on targeted growth CapEx.
Improved liquidity and disciplined capital allocation
A refreshed $2.5B facility and ~ $1.7B liquidity increase financial flexibility and reduce near-term refinancing risk, while consistent share repurchases/dividends and targeted cemetery development spending signal discipline in capital allocation, supporting sustainable execution of strategy.
Negative Factors
High leverage burden
Elevated leverage materially limits balance-sheet flexibility and raises refinancing and interest-rate sensitivity. With net debt/EBITDA near targeted leverage, high debt leaves less room for large M&A or cyclical downturns and increases the proportion of cash flow devoted to interest and covenant management.
Margin compression & SCI Direct headwinds
Structural mix and recognition changes (insurance-funded preneed) reduce higher-margin merchandise revenue and raise immediate commission recognition, exerting downward pressure on gross and EBITDA margins. Persistent margin compression would weaken cash conversion and limit ability to fund growth or maintain returns.
Funeral volume softness and revenue volatility
Weakness in funeral volumes and episodic large-sale volatility reduce topline predictability and amplify quarter-to-quarter earnings swings. Combined with transitional cancellations from insurance partner changes, persistent volume softness would constrain margin recovery and strain long-term organic growth assumptions.
Service International (SCI) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$11.20B
Dividend Yield1.66%
Average Volume (3M)1.09M
Price to Earnings (P/E)21.2
Beta (1Y)0.46
Revenue Growth3.41%
EPS Growth7.94%
CountryUS
Employees25,000
SectorConsumer Cyclical
Sector Strength84
IndustryPersonal Products & Services
Share Statistics
EPS (TTM)1.14
Shares Outstanding139,223,660
10 Day Avg. Volume1,442,539
30 Day Avg. Volume1,086,728
Financial Highlights & Ratios
PEG Ratio2.79
Price to Book (P/B)6.74
Price to Sales (P/S)2.56
P/FCF Ratio19.92
Enterprise Value/Market Cap1.44
Enterprise Value/Revenue3.75
Enterprise Value/Gross Profit14.16
Enterprise Value/Ebitda12.87
Forecast
1Y Price Target
$100.67Price Target Upside25.62% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering5
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
Service International Business Overview & Revenue Model
Company DescriptionService Corporation International provides deathcare products and services in the United States and Canada. The company operates through Funeral and Cemetery segments. Its funeral service and cemetery operations comprise funeral service locations, cemeteries, funeral service/cemetery combination locations, crematoria, and other businesses. The company also provides professional services related to funerals and cremations, including the use of funeral facilities and motor vehicles; arranging and directing services; and removal, preparation, embalming, cremation, memorialization, and travel protection, as well as catering services. In addition, it offers funeral merchandise, including burial caskets and related accessories, urns and other cremation receptacles, outer burial containers, flowers, online and video tributes, stationery products, casket and cremation memorialization products, and other ancillary merchandise. Further, the company's cemeteries provide cemetery property interment rights, such as developed lots, lawn crypts, mausoleum spaces, niches, and other cremation memorialization and interment options; and sells cemetery merchandise and services, including memorial markers and bases, outer burial containers, flowers and floral placements, graveside services, merchandise installations, and interments, as well as offers preneed cemetery merchandise and services. Service Corporation International offers its products and services under the Dignity Memorial, Dignity Planning, National Cremation Society, Advantage Funeral and Cremation Services, Funeraria del Angel, Making Everlasting Memories, Neptune Society, and Trident Society brands. As of December 31, 2021, it owned and operated 1,471 funeral service locations; and 488 cemeteries, including 299 funeral service/cemetery combination locations covering 44 states, eight Canadian provinces, the District of Columbia, and Puerto Rico. The company was incorporated in 1962 and is headquartered in Houston, Texas.
How the Company Makes MoneySCI generates revenue through several key streams. Primarily, the company earns money by charging clients for its logistics services, which include freight forwarding and customs brokerage fees. Additionally, income is generated from warehousing services, where clients pay for storage and inventory management. SCI also engages in strategic partnerships with shipping lines and carriers, allowing it to negotiate favorable rates and pass on savings to customers. These partnerships not only enhance service offerings but also provide additional revenue opportunities through collaborative ventures. Furthermore, the company leverages technology to optimize logistics processes, reducing operational costs and increasing profit margins.
Service International Earnings Call Summary
Earnings Call Date:Feb 11, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:May 04, 2026
Earnings Call Sentiment Positive
The call presented a predominantly positive financial and operational picture: EPS and full-year adjusted operating cash flow improved, preneed sales growth showed clear momentum, cemetery margins expanded, liquidity and shareholder returns were strong, and capital allocation priorities focused on high-return cemetery development. Offsetting weaknesses include funeral gross profit and margin pressure driven by selling compensation recognition and SCI Direct product mix, modest volume softness in funeral services, higher interest timing effects in the quarter, and some transitional cancellation issues tied to the insurance partner change. Management provided stable-to-modest growth guidance for 2026 with clear cost and capital priorities, while flagging volume risk as the main downside driver.Q4-2025 Updates
Positive Updates
Quarterly and Full-Year EPS Growth
Adjusted EPS of $1.14 in Q4, up 8% year-over-year (from $1.06). Full-year adjusted EPS of $3.85, up 9% year-over-year (would have been $3.92 or +11% if the effective tax rate had remained constant).
Strong Operating Cash Flow and Fiscal-Year Improvement
Q4 adjusted operating cash flow of $213M, exceeding the high end of guidance. Full-year adjusted operating cash flow of $966M, an increase of $108M or +11% year-over-year (excluding cash taxes and special items).
Preneed Sales Momentum
Total preneed sales production increased by $29M (~+11%) in Q4. Core preneed funeral sales production up $25M (+12%); non-funeral home preneed sales production up >$4M (+8%). Cemetery preneed sales backlog grew (merchandise & service sales production up $15M).
Cemetery Revenue and Margin Expansion
Comparable cemetery revenue increased ~$5M (~+1%) in Q4. Cemetery gross profit grew ~$5M (~+3%) and gross profit percentage expanded by ~70 basis points, delivering an operating margin over 36% for the segment.
Disciplined Capital Allocation & Shareholder Returns
Returned $107M to shareholders in Q4 (repurchases $59M, dividends $48M). Full-year capital returned $645M (repurchases $461M, dividends $184M). FY acquisitions $101M (midpoint of guidance). Subsequent repurchase of ~500k shares (~$40M).
Enhanced Liquidity and Conservative Leverage
Entered a new $2.5B bank credit facility (term loan $750M + $1.7B revolver) increasing liquidity by >$350M; current liquidity about $1.7B. Net debt/EBITDA ended ~3.65x (near lower end of 3.5x–4x target).
CapEx and Investment Priorities
FY capital investments $508M (maintenance CapEx $328M; growth CapEx $79M). 2026 guidance: maintenance CapEx ~$325M, acquisitions $75M–$125M, growth CapEx $70M–$80M — prioritizing cemetery development and high-return projects (~$165M targeted for cemetery development).
Negative Updates
Funeral Gross Profit and Margin Pressure
Funeral gross profit declined by nearly $4M in Q4 and gross profit margin fell ~70 basis points to ~21%. Recognized selling compensation increased ~$5M (driven by shift from variable to more fixed compensation and immediate recognition for insurance-funded preneed).
Core General Agency Revenue Decline and Commission Normalization
Core general agency and other revenue declined ~$8M (~-13%) in Q4 due to a lower general agency commission rate (product mix changes) and higher cancellations related to the insurance partner transition; management expects commission rate to stabilize in the mid-30s percent range.
Funeral Volume Softness
Comparable core funeral services performed decreased ~1.9% in Q4; full-year funeral volume declined by less than 1% as COVID pull-forward effects continue to diminish. Guidance for 2026 assumes flat to slightly down funeral volume compared to 2025.
SCI Direct Margin Compression
Conversion from trust-funded to insurance-funded products in SCI Direct results in immediate recognition of GA commissions and selling costs, replacing higher-margin merchandise revenue and exerting downward pressure on SCI Direct margins versus prior periods.
Higher Cash Interest and Q4 OCF Headwinds
Q4 adjusted operating cash flow decreased ~$34M year-over-year (neutralizing for $21M higher cash taxes), primarily due to $24M higher cash interest (timing related to debt financing and bank facility draws) and a net $18M working capital use (payroll timing).
Cancellation Experience and One-Time Catch-Up
Higher than expected cancellations tied to insurance transition required an estimation catch-up (~200 basis points impact noted), contributing to lower recognized GA revenue in the quarter; management views much of this as transitory as processes stabilize.
At-Need and Large Sale Volatility
Core cemetery (at-need) revenue declined ~$3M in the quarter; large property sales were down ~$5M versus a particularly strong prior-year quarter, highlighting volatility in large-ticket cemetery transactions.
Company Guidance
SCI guided 2026 adjusted EPS of $4.05–$4.35 (midpoint $4.20), implying 5%–13% growth (9% at the midpoint), and adjusted operating cash flow of about $1.0B–$1.06B (mid ≈ $1.03B) — the midpoint assumes roughly $70M of higher cash earnings and cash taxes declining ~$20M to ~$120M (with normalized cash tax rates of ~24%–25% beyond 2026 and an expected effective tax rate on the income statement of ~25%–26%). They expect funeral volume flat to slightly down with AR per case rising at inflationary rates and a modest cremation mix increase, funeral preneed production up low‑to‑mid single digits, and funeral gross margin expansion of ~20–60 bps; cemetery preneed production up low‑to‑mid single digits, cemetery revenue +2%–5%, and cemetery gross margin expansion of ~30–60 bps. Capital plan: maintenance CapEx ~$325M (≈$135M sites, $165M cemetery development, $25M digital/corp), acquisitions $75M–$125M, growth CapEx $70M–$80M. Below‑the‑line, a lower share count is expected to be a net benefit, partially offset by slightly higher interest and a slightly higher tax rate; corporate G&A is expected to average ~$40M–$42M per quarter. Balance sheet/liquidity: new $2.5B credit facility ( $750M term + $1.7B revolver) maturing Nov 2030, liquidity ≈ $1.7B, and leverage ~just above 3.65x (target 3.5x–4x); shareholder returns (dividends + buybacks) to continue.Service International Financial Statement Overview
Summary
Strong profitability and steady operating cash flow support the score, including a standout 2025 revenue growth year and positive free cash flow. Offsetting this, leverage remains the key constraint (high debt relative to equity), and 2025 showed margin compression and weaker free-cash-flow growth versus prior years.Income Statement
Revenue has re-accelerated in 2025 (annual revenue growth of ~43% vs ~2% in 2024), and profitability remains solid with a strong net margin (~21% in 2025). That said, gross margin has trended down from 2021 levels, and EBITDA margin compressed meaningfully in 2025 versus 2024, suggesting higher costs or mix/one-time impacts despite the strong top-line year.74
Positive
Balance Sheet
Leverage is the main constraint: total debt rose to ~$5.1B in 2025 while equity is ~1.6B, and prior years show consistently high debt relative to equity (debt-to-equity roughly ~2–3x in 2020–2024). Total assets have grown, but equity has been relatively flat to down over time, leaving less balance-sheet flexibility and higher sensitivity to refinancing/interest-rate conditions.54
Neutral
Cash Flow
Cash generation is steady: operating cash flow has been consistently strong (~$0.8–$0.95B across 2020–2025) and free cash flow remains positive (~$0.55B in 2025). However, free cash flow growth turned negative in 2025, and free cash flow covers only ~59% of net income (similar to 2023–2024), indicating earnings are not fully translating into incremental free cash after cash taxes, working capital, and capital spending.66
Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 4.31B | 4.19B | 4.10B | 4.11B | 4.14B |
| Gross Profit | 1.14B | 1.09B | 1.09B | 1.15B | 1.32B |
| EBITDA | 1.31B | 1.26B | 1.26B | 1.27B | 1.44B |
| Net Income | 542.61M | 518.65M | 537.32M | 565.34M | 802.94M |
Balance Sheet | |||||
| Total Assets | 18.65B | 17.38B | 16.36B | 15.07B | 15.69B |
| Cash, Cash Equivalents and Short-Term Investments | 243.58M | 218.77M | 221.56M | 191.94M | 268.63M |
| Total Debt | 5.14B | 4.92B | 4.80B | 4.43B | 4.06B |
| Total Liabilities | 17.02B | 15.70B | 14.81B | 13.39B | 13.78B |
| Stockholders Equity | 1.64B | 1.68B | 1.54B | 1.67B | 1.91B |
Cash Flow | |||||
| Free Cash Flow | 554.25M | 555.80M | 507.25M | 456.02M | 616.95M |
| Operating Cash Flow | 942.80M | 944.91M | 869.04M | 825.73M | 920.61M |
| Investing Cash Flow | -548.28M | -620.95M | -469.39M | -447.88M | -414.93M |
| Financing Cash Flow | -374.73M | -319.64M | -381.14M | -448.00M | -465.62M |
Service International Technical Analysis
Neutral
80.14
Price Trends
79.94
Positive
80.24
Negative
79.25
Positive
Market Momentum
0.22
Positive
46.10
Neutral
39.13
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SCI, the sentiment is Neutral. The current price of 80.14 is below the 20-day moving average (MA) of 81.58, above the 50-day MA of 79.94, and above the 200-day MA of 79.25, indicating a neutral trend. The MACD of 0.22 indicates Positive momentum. The RSI at 46.10 is Neutral, neither overbought nor oversold. The STOCH value of 39.13 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral 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
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
72 Outperform | $4.16B | 16.25 | 91.16% | ― | 11.88% | 18.08% | |
68 Neutral | $11.20B | 21.16 | 32.72% | 1.66% | 3.41% | 7.94% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% | |
59 Neutral | $691.53M | 14.12 | 21.96% | 1.06% | 0.99% | 37.55% |
* Consumer Cyclical Sector Average
SCI
Service International
80.14
2.53
3.27%
CSV
Carriage Services
44.32
3.21
7.81%
FTDR
frontdoor
57.13
-1.06
-1.82%
Service International Corporate Events
Business Operations and StrategyPrivate Placements and Financing
Service International Secures New Credit Agreement with JPMorgan
Neutral
Nov 21, 2025
On November 20, 2025, Service Corporation International entered into a new senior unsecured credit agreement with JPMorgan Chase Bank and other financial institutions. This agreement includes a $750 million term loan facility and a $1.75 billion revolving credit facility, both maturing in November 2030. The credit agreement imposes various covenants and requires the company to maintain a specific leverage ratio, impacting its financial flexibility and operational strategies.
The most recent analyst rating on (SCI) stock is a Buy with a $98.00 price target. To see the full list of analyst forecasts on Service International stock, see the SCI Stock Forecast page.
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.