A Look At Service Corporation International’s Valuation After Mixed Recent Share Performance

Recent share performance and business snapshot

Service Corporation International (SCI) has drawn investor attention after a mixed stretch of recent returns, with the stock up over the past year but down over the past month and over the past 3 months.

The US based deathcare provider, with a market value of about US$10.7b, generates US$4.3b in annual revenue and US$535.5m in net income from funeral and cemetery operations across the United States and Canada.

See our latest analysis for Service Corporation International.

At a share price of US$78.80, SCI’s recent 1 day and 7 day share price gains sit against a weaker 30 day performance, while multi year total shareholder returns above 25% indicate that longer term holders have still been rewarded.

If you are weighing SCI against other opportunities, it can help to widen your search and review 18 top founder-led companies

With SCI trading at US$78.80 alongside an estimated intrinsic discount of about 7% and a value score of 3, the key question is whether the stock still offers upside or if the market is already factoring in expectations for the company’s performance.

Most Popular Narrative: 19.9% Undervalued

The most followed narrative for Service Corporation International points to a fair value of about $98.33, compared with the last close of $78.80. This frames a valuation gap driven by specific growth, margin, and buyback assumptions.

Analysts are assuming Service Corporation International's revenue will grow by 3.7% annually over the next 3 years. Analysts assume that profit margins will increase from 12.6% today to 14.5% in 3 years time.

Read the complete narrative.

Curious how modest revenue growth, higher margins, and shrinking share count combine to support that higher fair value? The narrative pulls these levers together in a way that might surprise you.

Result: Fair Value of $98.33 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, this hinges on cremation remaining a manageable drag and acquisition-led growth staying on track, and either factor could quickly weaken the upbeat valuation story.

Find out about the key risks to this Service Corporation International narrative.

Another way to look at SCI’s valuation

The analyst narrative treats SCI as about 19.9% undervalued, yet the current P/E of 20.3x sits above both the US Consumer Services industry at 16x and direct peers at 13.4x. Even against a fair ratio of 21.5x, that premium raises a simple question: how comfortable are you paying up for this earnings profile?

To stress test your own view on the current P/E, it is worth going one level deeper into the numbers and seeing how they compare across peers and to the fair ratio. This fair ratio is the level the market could move towards over time, See what the numbers say about this price — find out in our valuation breakdown.

Next Steps

With mixed signals from valuation, growth assumptions, and recent share performance, how confident are you in the current setup for SCI? Act now by reviewing the full balance of potential upsides and concerns through 4 key rewards and 3 important warning signs.

Looking for more investment ideas?

If SCI feels interesting but you want more options on your radar, use targeted stock lists to quickly spot opportunities that fit your style and risk profile.

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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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