Is It Too Late To Consider Cintas After Its Strong Multi Year Share Price Run?

• For investors wondering if Cintas is still worth considering after its big run, or if most of the upside is already priced in, this article will walk through what the numbers are really telling us about the stock's value.
• The share price has climbed about 2.0% over the last week, 5.0% over the past month, and 5.0% year to date, on top of multi year gains of 74.1% over 3 years and 128.6% over 5 years that indicate the market already sees Cintas as a quality compounder.
• Recent coverage has highlighted Cintas as a bellwether for business activity in North America, with its uniform and facility services demand often viewed as a read through on employment and service sector health. Analysts and commentators have also been focusing on how its steady contract based revenue and outsourcing trends may justify a premium price tag even when short term macro data looks choppy.
• Despite that, Cintas currently scores 0/6 on our valuation checks, suggesting the stock screens as fully priced or expensive on most traditional metrics. Next we will unpack those valuation approaches, then finish by exploring a more nuanced way to think about what Cintas might really be worth.

Cintas scores just 0/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.

Approach 1: Cintas Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow model estimates what a business is worth by projecting the cash it can generate in the future and discounting those cash flows back to today using a required rate of return.

For Cintas, the model starts with last twelve months Free Cash Flow of about $1.77 billion. Analysts expect this to keep rising, with projections reaching roughly $2.57 billion by 2029, and then continuing to grow more gradually through 2035 based on Simply Wall St extrapolations from those analyst estimates. These future cash flows are converted into today’s dollars using a 2 Stage Free Cash Flow to Equity approach and then summed to arrive at an intrinsic value per share.

On this basis, the DCF model suggests a fair value of about $162.37 per share. Compared with the current market price, that outcome implies Cintas is around 17.7% overvalued, meaning investors are paying a premium to the cash flows currently expected.

Result: OVERVALUED

Our Discounted Cash Flow (DCF) analysis suggests Cintas may be overvalued by 17.7%. Discover 904 undervalued stocks or create your own screener to find better value opportunities.

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Cintas.

Approach 2: Cintas Price vs Earnings

For a profitable, mature business like Cintas, the Price to Earnings (PE) ratio is a practical way to gauge whether investors are paying a sensible price for each dollar of current earnings. In general, companies with stronger and more reliable earnings growth and lower perceived risk can justify trading on a higher PE than slower growing or more cyclical peers.

Cintas currently trades on a PE of about 40.4x, well above both the broader Commercial Services industry average of roughly 24.0x and the peer group average of around 33.2x. To move beyond simple comparisons, Simply Wall St calculates a proprietary Fair Ratio of 32.6x for Cintas, which reflects its specific earnings growth outlook, profitability, industry positioning, market cap and risk profile.

This Fair Ratio is more tailored than a straight peer or sector comparison because it adjusts for how Cintas actually earns and grows its profits rather than assuming one size fits all. Comparing the current 40.4x PE to the 32.6x Fair Ratio suggests investors are paying a meaningful premium to what those fundamentals would typically warrant, indicating the shares look expensive on an earnings basis.

Result: OVERVALUED

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1460 companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your Cintas Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let us introduce you to Narratives, a simple way to connect your view of Cintas with a concrete financial forecast and fair value. A Narrative is the story you believe about the company, translated into numbers like future revenue, earnings and margins, so you are not just guessing, you are making your assumptions explicit. On Simply Wall St’s Community page, used by millions of investors, Narratives make this process easy and accessible by linking your story to a dynamic valuation that updates automatically when new information such as earnings or news arrives. Each Narrative produces a Fair Value that you can compare to the current share price, helping you decide how Cintas aligns with your own expectations. For example, one investor might build a Cintas Narrative around resilient uniform rentals and long term double digit growth in Fire Protection and First Aid that supports a fair value near the top of analyst targets, while another might focus on remote work risks and macro headwinds to justify a valuation closer to the lowest target.

Do you think there's more to the story for Cintas? Head over to our Community to see what others are saying!

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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