Service International Beats Revenue Expectations in Q4
Key Highlights:
* Revenue: $1.09 billion (+3.5% YoY)
* Adjusted EPS: $1.04 (in line with estimates)
* Revenue guidance: $3.85 (slightly below estimates)
* Operating Margin: 24%
* Free Cash Flow Margin: 13.9%
* Funeral Services Performed: 88,934 (-1.7% YoY)
Company Overview
Founded in 1962, Service International (SCI) provides funeral services and products in North America.
Sales Growth
Over the past five years, SCI's sales have grown at a modest 5.3% CAGR. While this is lower than the consumer discretionary sector average, the company's revenue has remained flat over the past two years, indicating decelerating demand.
Revenue Dynamics
Despite the slight decline in funeral services performed, SCI's revenue growth suggests improved monetization. Sell-side analysts project a 3.3% revenue increase over the next 12 months.
Cash Profitability
SCI has exhibited decent cash profitability, with a free cash flow margin averaging 12.8% over the last two years. In Q4, the margin was 13.9%, slightly lower than the previous year but still above average.
Investment Considerations
SCI's Q4 results were mixed. While the company exceeded revenue estimates, funeral services missed, and EBITDA fell short. However, the stock price rose 2.7% after the announcement.
To determine if Service International is a suitable investment, further analysis of long-term fundamentals and valuation is recommended.