Carriage Services (CSV): Net Margin Jump Reinforces Bullish Case on Value and Earnings Quality

Carriage Services (CSV) reported current net profit margins of 11.9%, up from 8.5% the previous year. Earnings have grown by an average of 11.8% per year over the past five years. Notably, earnings growth over the past year was 41.8%, outpacing the company’s five-year average. Revenue is forecast to rise 4.4% annually, with earnings expected to climb 9.7% per year. With a price-to-earnings ratio of 13.5x, lower than both industry and peer averages, and shares trading below fair value, Carriage Services enters earnings season with positive momentum and expanding profitability.

See our full analysis for Carriage Services.

The next step is to see how these headline results stack up against the major narratives around Carriage Services. Some long-held views may get reinforced, while others could be put to the test.

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Inventory Project Delays Weigh on Cemetery Segment

• Cemetery operating revenue grew just 2.2% year-to-date, falling short of management’s long-term growth target of 10% to 20% and highlighting a slower recovery compared to other areas.
• According to the consensus narrative, completion of delayed high-end cemetery inventory projects is expected to unlock pent-up demand in the second half of the year and into 2026,
  • Analysts argue that addressing construction and permit challenges could restore momentum, but continued setbacks would structurally limit growth and compress net margins if inventory remains unavailable.
  • This tension between current underperformance and anticipated improvements means sustained outperformance depends on timely delivery and market acceptance of premium offerings.
• To see how cemetery segment momentum shapes the overall outlook, see the full consensus narrative for Carriage Services. 📊 Read the full Carriage Services Consensus Narrative.

Margin Expansion Meets Inflation Pressure

• Funeral field EBITDA margin dropped by 250 basis points and cemetery field EBITDA margin fell by 480 basis points, as cost inflation, especially on salaries and benefits, began to offset pricing optimization and efficiency gains in operations.
• Consensus narrative notes that while pricing strategies and technology upgrades have supported overall margin and earnings improvement,
  • the recent squeeze from variable expenses challenges the idea that margin expansion can continue smoothly if macro inflation continues or worsens, especially if overhead cost discipline starts to slip.
  • Investors attentive to margin resilience will watch closely for further evidence that Carriage can grow profitably despite the shifting cost environment.

Shares Trade Well Below Consensus and DCF Fair Value

• With the current share price at $41.81, Carriage Services trades at a 29.4% discount to the consensus analyst price target of $59.20 and at a 45% discount to the DCF fair value of $76.21.
• As the consensus narrative highlights, analysts expect profit margins to rise from 12.7% today to 13.8% in three years, justifying a higher future P/E and closing the gap between today’s price and their valuation scenarios,
  • the unusually wide spread versus both target and DCF fair values suggests that investors remain cautious about execution risks and sustainability of margin gains, creating a potential opportunity if management delivers as forecasted.
  • This disconnect between market price and fair value models puts the focus on Carriage’s ability to hit its ambitious forecasts in a competitive environment.

Next Steps

To see how these results tie into long-term growth, risks, and valuation, check out the full range of community narratives for Carriage Services on Simply Wall St. Add the company to your watchlist or portfolio so you'll be alerted when the story evolves.

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A great starting point for your Carriage Services research is our analysis highlighting 5 key rewards and 2 important warning signs that could impact your investment decision.

See What Else Is Out There

Despite rising earnings, Carriage Services faces pressure from delayed inventory projects and shrinking margins. Inflation and execution challenges are also weighing on future growth.

If you want to focus on stability, use stable growth stocks screener (2078 results) to discover companies delivering reliable revenue and earnings expansion regardless of short-term setbacks.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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