Service Corporation International
SCI
$86.37
+2.06%
Service Corporation International (SCI) is a leading provider of funeral and cemetery services and products, operating throughout the United States and Canada within the personal services industry. The company is the dominant market leader in the North American deathcare sector, leveraging its extensive network of locations to provide comprehensive professional services, facilities, and merchandise. The current investor narrative centers on its defensive characteristics and stable cash flows, which are highlighted by its consistent quarterly dividend declarations, positioning it as a resilient business amidst economic uncertainty, though recent performance has lagged the broader market's strong rally.…
SCI
Service Corporation International
$86.37
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SCI 12-Month Price Forecast
Wall Street consensus
Most Wall Street analysts maintain a constructive view on Service Corporation International's 12-month outlook, with a consensus price target around $112.28 and implied upside of +30.0% versus the current price.
Average Target
$112.28
1 analysts
Implied Upside
+30.0%
vs. current price
Analyst Count
1
covering this stock
Price Range
$69 - $112
Analyst target range
Insufficient analyst coverage available. The data indicates coverage from only one analyst, which is minimal for a company of SCI's size ($11 billion market cap). This limited coverage typically reflects its status as a mid-cap stock in a niche, less-followed industry (deathcare), which can lead to higher volatility and less efficient price discovery due to lower institutional scrutiny. The available data shows an estimated EPS for one analyst, but without a consensus target price or a meaningful distribution of ratings, it is impossible to gauge a reliable market sentiment or implied upside/downside. The institutional ratings history shows a pattern of reiterated 'Buy' or 'Outperform' ratings from a handful of firms like UBS and Oppenheimer over the past year, suggesting a stable, bullish view among the limited cohort that does follow the stock.
Bulls vs Bears: SCI Investment Factors
The evidence presents a classic battle between stable, high-quality fundamentals and poor market sentiment. The bull case, anchored by SCI's defensive cash flows, strong profitability, and reasonable valuation, currently holds stronger fundamental evidence. The bear case is primarily driven by technical weakness and growth concerns. The single most important tension in the investment debate is whether the market will begin to reward SCI's predictable cash generation and high ROE, or if the stock will remain mired in a value trap due to its low growth profile and high leverage. The resolution of this sentiment versus fundamentals disconnect will dictate the stock's path.
Bullish
- Stable, Defensive Cash Flows: SCI generates robust and predictable free cash flow, with TTM FCF of $599.2 million supporting its dividend and share repurchases. This cash generation underpins its defensive investment thesis, as demand for funeral services is non-cyclical and resilient to economic downturns.
- Strong Profitability and ROE: The company maintains high profitability with a Q4 2025 net margin of 14.34% and a trailing ROE of 33.12%. This exceptional ROE demonstrates efficient use of its leveraged balance sheet to generate substantial returns for equity holders.
- Reasonable Valuation Near Mid-Range: SCI trades at a forward P/E of 17.93x, a discount to its trailing P/E of 20.35x, implying expected earnings growth. Its current trailing P/E of 20.35x sits near the middle of its multi-year historical range (9.5x to 25x+), suggesting it is fairly valued relative to its own history, not overextended.
- Recent Technical Rebound from Lows: The stock has rebounded +7.84% over the past month from a low of $75.43, approaching the $82.98-$83.03 range. This bounce off the 52-week low of $74.14 suggests potential mean reversion and value recognition after a period of significant underperformance versus the S&P 500.
Bearish
- Severe Relative Underperformance: SCI has dramatically lagged the market, with a 1-year price change of +6.95% versus the S&P 500's +34.9%, resulting in a stark -27.95 relative strength reading. This persistent weakness indicates a lack of investor appetite despite stable fundamentals.
- High Financial Leverage: The company carries a significant debt burden with a debt-to-equity ratio of 3.14. While manageable with stable cash flows, this leverage amplifies risks during periods of rising interest rates or operational stress, and is reflected in a weak current ratio of 0.55.
- Anemic Revenue Growth: Top-line growth is minimal, with Q4 2025 revenue of $1.11 billion representing only a 1.69% year-over-year increase. This low-single-digit growth profile limits multiple expansion potential and fails to excite growth-oriented investors.
- Limited Analyst Coverage & Visibility: The stock suffers from minimal analyst coverage (only one analyst in the dataset), typical for its niche industry. This leads to lower institutional scrutiny, potentially less efficient price discovery, and higher volatility, as seen in its recent price swings.
SCI Technical Analysis
The stock is in a pronounced downtrend over the past year, with a 1-year price change of only +6.95%, significantly underperforming the S&P 500's +34.9% gain, as evidenced by a stark -27.95 relative strength reading. Currently trading at $82.98, the price sits at approximately 74% of its 52-week range ($74.14 to $86.67), indicating it is closer to its yearly lows than highs, which may suggest a value opportunity but also reflects persistent weakness and a lack of bullish momentum. Recent momentum shows a short-term rebound, with a +7.84% gain over the past month, which contrasts sharply with the near-flat +0.01% performance over the last three months, signaling a potential mean reversion bounce within a longer-term downtrend. The stock's beta of 0.98 indicates its volatility is nearly in line with the broader market, which is typical for a stable, defensive business, though its recent price action has been more volatile, as seen in the sharp drop to $75.43 in late March before the recent recovery. Key technical support is clearly defined at the 52-week low of $74.14, while resistance looms at the 52-week high of $86.67; a sustained breakout above $86.67 would be necessary to signal a reversal of the bearish trend, while a breakdown below $74.14 could trigger a new leg down.
Beta
0.98
0.98x market volatility
Max Drawdown
-11.9%
Largest decline past year
52-Week Range
$74-$87
Price range past year
Annual Return
+7.5%
Cumulative gain past year
| Period | SCI Return | S&P 500 |
|---|---|---|
| 1m | +11.5% | +8.5% |
| 3m | +6.4% | +2.8% |
| 6m | +5.8% | +4.6% |
| 1y | +7.5% | +32.3% |
| ytd | +11.9% | +3.9% |
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SCI Fundamental Analysis
Revenue growth is modest but stable, with Q4 2025 revenue of $1.11 billion representing a year-over-year increase of 1.69%, continuing a trend of low-single-digit growth seen in recent quarters (Q3 2025 revenue grew 3.9% YoY to $1.06 billion). The business is segmented into funeral services (the majority revenue driver) and cemetery operations, with both segments contributing to the steady top-line performance that is characteristic of the non-cyclical deathcare industry. The company is consistently profitable, posting a Q4 2025 net income of $159.4 million, which equates to a healthy net margin of 14.34%, and maintains a gross margin of 28.04% for the quarter. Profitability metrics have shown some quarterly fluctuation, with the operating margin dipping to 22.60% in Q4 from 25.01% in the year-ago quarter, but the business model inherently generates solid cash flows, as evidenced by a trailing twelve-month free cash flow of $599.2 million. The balance sheet carries significant leverage, with a debt-to-equity ratio of 3.14, which is high but manageable for a company with stable, predictable cash flows; the current ratio of 0.55 indicates limited short-term liquidity, but this is typical for the asset-heavy industry. The robust free cash flow generation supports shareholder returns, including dividends and share repurchases, and provides a cushion for the debt load, with an ROE of 33.12% demonstrating efficient use of that leverage to generate returns for equity holders.
Quarterly Revenue
$1.1B
2025-12
Revenue YoY Growth
+0.01%
YoY Comparison
Gross Margin
+0.28%
Latest Quarter
Free Cash Flow
$599187000.0B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
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Valuation Analysis: Is SCI Overvalued?
Given the company's consistent profitability, the primary valuation metric is the Price-to-Earnings (PE) ratio. SCI trades at a trailing PE of 20.35x and a forward PE of 17.93x, with the forward multiple being lower, indicating the market expects modest earnings growth. Comparing to industry averages is challenging as specific sector multiples are not provided in the data, but the stock's valuation appears reasonable for a stable, cash-generative business with a defensive profile. Historically, the stock's own trailing PE has fluctuated significantly, ranging from a low near 9.5x in early 2021 to highs above 25x in late 2025; the current 20.35x multiple sits near the middle of this multi-year range, suggesting the stock is neither historically cheap nor expensive, but fairly valued relative to its own history. The Price-to-Sales ratio of 2.56 and EV/EBITDA of 12.13 provide additional context, supporting the view that the valuation is in a balanced zone, not pricing in aggressive growth but also not indicating deep value.
PE
20.3x
Latest Quarter
vs. Historical
Mid-Range
5-Year PE Range 9x~29x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
12.1x
Enterprise Value Multiple
Investment Risk Disclosure
Financial & Operational Risks: SCI's primary financial risk stems from its high leverage, with a debt-to-equity ratio of 3.14. While its stable free cash flow ($599.2M TTM) provides a service cushion, a sustained rise in interest rates could increase financing costs and pressure net income, which saw some margin compression in Q4 (operating margin of 22.60% vs. 25.01% YoY). Furthermore, revenue growth is minimal at 1.69% YoY, indicating limited organic expansion levers, and the business is heavily reliant on its dominant North American market, creating geographic concentration risk.
Market & Competitive Risks: The stock's valuation, while reasonable historically, faces compression risk if the market continues to penalize low-growth companies. Its forward P/E of 17.93x, though lower than its trailing multiple, still implies growth expectations that may not materialize. With a beta of 0.98, its volatility is in line with the market, but its severe underperformance (-27.95 relative strength) suggests specific sector de-rating. Competitive risks are muted given its scale, but long-term threats include potential disruption from low-cost alternatives or changing consumer preferences toward simpler, less expensive services.
Worst-Case Scenario: The worst-case scenario involves a combination of rising interest rates increasing debt service costs, a recessionary environment pressuring average revenue per service (though volume may hold), and a continued flight from value/defensive stocks by growth-focused investors. This could trigger multiple compression and drive the stock back to test its 52-week low of $74.14. From the current price of ~$82.98, this represents a realistic downside of approximately -11% to that technical support level. A breach below $74.14 could see a further decline toward the $70 range, amplifying losses to -15% or more.