Service Corporation International (SCI) Net Margin Resilience Tests Skeptical Narratives On Profit Quality

Service Corporation International FY 2025 Results Snapshot

Service Corporation International (SCI) has wrapped up FY 2025 with fourth quarter revenue of US$1.1 billion and basic EPS of US$1.14, alongside net income of US$159.4 million that caps a trailing 12 month EPS of US$3.83 on revenue of US$4.3 billion. Over the past year, the company has seen quarterly revenue move from US$1.09 billion in Q4 2024 to US$1.11 billion in Q4 2025, while basic EPS shifted from US$1.05 to US$1.14. This sets the stage for investors to focus on how SCI’s net profit margin and earnings profile shape the quality of these results.

See our full analysis for Service Corporation International.

With the headline numbers on the table, the next step is to weigh them against the main market and community narratives to see which views are supported by the latest figures and which might need a rethink.

See what the community is saying about Service Corporation International

Margins Hold Around 12.6% Net

• Over the last 12 months, SCI generated US$4.3b of revenue and US$542.6 million of net income, which works out to a 12.6% net profit margin compared with 12.4% a year earlier.
• Analysts' consensus view links this steady margin profile to growth in preneed and advance-planning revenue, yet they also flag that higher cremation rates and volatile large cemetery sales could pressure these margins if lower margin services take a larger share of that US$4.3b revenue base.
  • On the supportive side, the consensus narrative points to growing preneed sales and installment receipts as helping cash flow stability, which lines up with the 4.6% earnings growth over the past year.
  • At the same time, concerns about lower margin cremations and lumpier big-ticket cemetery property sales sit in tension with the recent 12.6% margin level, since a shift in mix toward these areas could make it harder to maintain that margin over time.

Analysts watching these earnings are weighing a 12.6% margin against mix risks in cremation and cemetery sales, which makes the consensus story about steady profitability worth a closer look. 📊 Read the full Service Corporation International Consensus Narrative.

Slow 3.6% Revenue Growth, Earnings Turning Up

• Trailing 12 month revenue grew about 3.6% while earnings rose 4.6%, compared with a 5 year earnings trend of a 7.8% annual decline, and Q4 2025 EPS of US$1.14 sits above the prior four quarters that ranged from US$0.84 to US$0.99.
• Consensus narrative argues that expansion projects, digital initiatives, and acquisitions can support long term growth. However, the relatively modest 3.6% revenue growth and history of a 7.8% annual decline in earnings mean this recent 4.6% uptick is still being tested against the idea that growth can be sustained.
  • Supporters of the bullish side highlight analysts' expectation for earnings growth of about 7.8% per year, which is stronger than the last 12 month 4.6% earnings growth, and see this as consistent with ongoing investments and a larger acquisition pipeline.
  • Critics point out that reliance on acquisition driven expansion and lumpy cemetery property sales sits against the backdrop of that 5 year earnings decline record, so they may treat one year of 4.6% growth with caution until it repeats.

Premium 20.3x P/E With Debt Coverage Risk

• SCI trades at a P/E of 20.3x, above both a 13x peer average and the 17.4x US Consumer Services industry, while the share price of US$78.73 sits about 30.3% below a DCF fair value of US$112.96 and below an analyst price target of US$97.83, with debt flagged as not well covered by operating cash flow.
• Bears focus on that combination of premium P/E and weaker debt coverage, arguing that even if models point to upside, the higher multiple and leverage could limit how much of that gap to US$112.96 DCF fair value or US$97.83 target the market is willing to close.
  • From the cautious side, the concern is that a 20.3x P/E leaves less room for error compared with peers at 13x, especially when debt is not well covered by operating cash flow, which can restrict flexibility if conditions get tougher.
  • What complicates the bearish view is that both DCF and analyst targets imply room above the current US$78.73 share price, so the valuation debate turns on whether investors prioritize that potential upside or the balance sheet and premium multiple risk first.

Skeptics watching that 20.3x P/E and flagged debt coverage risk may want to see how a more cautious valuation case stacks up against the current market price. 🐻 Service Corporation International Bear Case

Next Steps

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

See the numbers differently? If the figures tell you a slightly different story, shape that view into your own narrative in just a few minutes. Do it your way

A great starting point for your Service Corporation International research is our analysis highlighting 4 key rewards and 1 important warning sign that could impact your investment decision.

See What Else Is Out There

SCI carries a premium 20.3x P/E, modest 3.6% revenue growth and flagged debt coverage risk, which together raise questions about its risk reward balance.

If those debt coverage concerns and premium valuation make you uneasy, shift your attention to companies screened for stronger balance sheets and fundamentals through our solid balance sheet and fundamentals stocks screener (45 results).

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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