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Service Corporation International (SCI)
:SCI
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Service International
(NYSE:SCI)
Rating:69Neutral
Price Target:
$84.00
▲(8.16%Upside)
Positive Factors
Financial Performance
Cash flow grew nicely, maintaining a solid cash flow with a 5% free cash flow yield and potential upside from capital deployment.
Foot Traffic
Foot traffic at Rose Hills, the largest SCI location, grew 7.4% month-over-month in April, significantly outperforming the flattish trends at all SCI locations.
Funeral Revenues
Funeral revenues were 5% above consensus as volumes were 5% above expectations, with same-store revenues growing by 4%.
Negative Factors
Cemetery Financials
Cemetery revenues and margins were below expectations, with cemetery revenues declining by 1% year over year.
Cemetery Sales
Pre-need Cemetery sales declined due to tougher comparisons and weakness in higher-end sales.
Regional Performance
Visits decreased month-over-month in Florida, Texas, and Illinois, with foot traffic down 3% in Illinois, 8% in Texas, and 10% in Florida.
Service International (SCI) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$11.06B
Dividend Yield1.59%
Average Volume (3M)1.28M
Price to Earnings (P/E)21.4
Beta (1Y)0.61
Revenue Growth2.40%
EPS Growth4.07%
CountryUS
Employees25,000
SectorConsumer Cyclical
Sector Strength73
IndustryPersonal Products & Services
Share Statistics
EPS (TTM)0.96
Shares Outstanding142,358,490
10 Day Avg. Volume1,142,558
30 Day Avg. Volume1,280,197
Financial Highlights & Ratios
PEG Ratio8.18
Price to Book (P/B)6.62
Price to Sales (P/S)0.00
P/FCF Ratio16.66
Enterprise Value/Market Cap1.39
Enterprise Value/Revenue0.92
Enterprise Value/Gross Profit13.90
Enterprise Value/Ebitda3.13
Forecast
1Y Price Target
$90.67Price Target Upside16.75% 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:Apr 30, 2025
(Q1-2025)
| % Change Since: -2.80%|
Next Earnings Date:Jul 30, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mixed outlook with significant growth in earnings per share, funeral revenue, and cash flow. However, these positives were counterbalanced by declines in preneed sales and cemetery revenue, alongside a higher effective tax rate.Q1-2025 Updates
Positive Updates
Earnings Per Share Growth
Adjusted earnings per share increased to $0.96 from $0.89 in the prior year, representing a growth driven by strong funeral revenue and gross profit.
Funeral Revenue Increase
Total comparable funeral revenue increased by over $23 million, or about 4%, due to strong core revenue and general agency revenue growth.
Funeral Gross Profit Increase
Funeral gross profit increased by about $21 million, with gross profit percentage rising by 240 basis points to over 24%.
Solid Cash Flow
Generated adjusted operating cash flow of $316 million, exceeding expectations and improving by over $90 million from the prior year.
Capital Return to Shareholders
Returned $176 million of capital to shareholders, including $46 million in dividends and $130 million in share repurchases.
Negative Updates
Decline in Preneed Funeral Sales Production
Preneed funeral sales production decreased by $32 million or about 10% over the first quarter of 2024 due to the transition to a new preneed insurance provider.
Cemetery Revenue Decline
Comparable cemetery revenue decreased by $8 million or about 2%, primarily due to a $12 million decrease in recognized preneed property revenue.
Higher Effective Tax Rate
Higher effective tax rate due to the non-deductibility of certain excess tax benefits affected earnings. Had the tax rate remained constant, there would have been an additional $0.04 in earnings per share.
Company Guidance
In the first quarter of 2025, SCI reported an adjusted earnings per share of $0.96, marking a 7.9% increase from the previous year's $0.89 per share. Funeral revenue saw a notable rise of over $23 million, or approximately 4% year-over-year, bolstered by a 2.5% growth in average revenue per service and a 1% increase in services performed, despite a modest 0.4% increase in the cremation rate. Conversely, cemetery revenue decreased by $8 million, or about 2%, influenced by a $12 million drop in recognized preneed property revenue. Preneed funeral sales production experienced a 10% decline, while non-funeral home preneed sales fell by 26% due to a transition to insurance-funded contracts. For the year 2025, SCI maintained its earnings per share guidance of $3.70 to $4.00, with a midpoint of $3.85, reflecting a 9% year-over-year growth. The company anticipates flat to slightly down funeral volume and 1-2% revenue growth in the cemetery segment, with a focus on managing inflationary costs.Service International Financial Statement Overview
Summary
Service International displays a commendable financial standing with robust profitability, steady revenue growth, and strong cash flow generation. Despite high leverage indicated by the Debt-to-Equity Ratio, the company effectively utilizes its equity to deliver strong returns. The financial stability is well supported by healthy cash flow metrics, positioning the company favorably in the Personal Products & Services industry.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 | ||||
| 4.22B | 4.19B | 4.10B | 4.11B | 4.14B | 3.51B | Gross Profit |
| 1.11B | 1.09B | 1.09B | 1.15B | 1.30B | 976.83M | EBIT |
| 945.24M | 927.68M | 944.25M | 927.32M | 1.19B | 842.77M | EBITDA |
| 1.20B | 1.26B | 1.26B | 1.27B | 1.44B | 1.09B | Net Income Common Stockholders |
| 530.23M | 518.65M | 537.32M | 565.34M | 802.94M | 515.91M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 209.43M | 218.77M | 221.56M | 191.94M | 268.63M | 230.86M | Total Assets |
| 16.70B | 17.38B | 16.36B | 15.07B | 15.69B | 14.52B | Total Debt |
| 4.68B | 4.92B | 4.80B | 4.34B | 3.97B | 3.83B | Net Debt |
| 4.47B | 4.70B | 4.58B | 4.15B | 3.70B | 3.60B | Total Liabilities |
| 15.10B | 15.70B | 14.81B | 13.39B | 13.78B | 12.76B | Stockholders Equity |
| 1.59B | 1.68B | 1.54B | 1.67B | 1.91B | 1.75B |
| Cash Flow | Free Cash Flow | ||||
| 648.43M | 555.80M | 507.25M | 456.02M | 616.95M | 582.14M | Operating Cash Flow |
| 1.04B | 944.91M | 869.04M | 825.73M | 920.61M | 804.35M | Investing Cash Flow |
| -614.89M | -620.95M | -469.39M | -447.88M | -414.93M | -318.37M | Financing Cash Flow |
| -391.35M | -319.64M | -381.14M | -448.00M | -465.62M | -492.78M |
Service International Technical Analysis
Positive
77.66
Price Trends
77.90
Negative
78.08
Negative
78.88
Negative
Market Momentum
-0.17
Negative
51.46
Neutral
59.08
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SCI, the sentiment is Positive. The current price of 77.66 is above the 20-day moving average (MA) of 77.00, below the 50-day MA of 77.90, and below the 200-day MA of 78.88, indicating a neutral trend. The MACD of -0.17 indicates Negative momentum. The RSI at 51.46 is Neutral, neither overbought nor oversold. The STOCH value of 59.08 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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 (62)
Financial Indicators
Performance Comparison
SCI
Service International
77.66
8.94
13.01%
CSV
Carriage Services
43.55
17.24
65.53%
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
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
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.