- Investors may be considering whether Service Corporation International at around US$75.43 still offers value, or if most of the opportunity is already priced in.
- The stock has recently pulled back, with returns of 5.1% over the last 7 days, 5.9% over the last 30 days, and 2.3% year to date. The 1 year return sits at 1.6%, and the longer term 3 and 5 year returns are 19.3% and 59.3% respectively.
- Recent coverage has focused on Service Corporation International as an established player in consumer services, with investors weighing its role in a relatively stable industry against changing sentiment in the broader market. This context helps explain how a stock with solid multi year returns can still experience shorter term price swings as expectations reset.
- On Simply Wall St's valuation checks, Service Corporation International scores 4 out of 6, as shown in the valuation summary. The sections that follow compare different valuation methods and then conclude with a broader way to think about what this score may mean for you.
Approach 1: Service Corporation International Discounted Cash Flow (DCF) Analysis
A Discounted Cash Flow model projects a company’s future cash flows and then discounts them back to today using a required rate of return, giving an estimate of what the business may be worth per share.
For Service Corporation International, the model used is a 2 Stage Free Cash Flow to Equity approach, based on cash flows reported and projected in $. The latest twelve month free cash flow (FCF) is about $529.0 million. Analyst inputs and Simply Wall St extrapolations suggest FCF figures between $560.0 million in 2026 and about $858.5 million by 2035, all discounted back to present value in the model.
Putting these cash flow projections together, the DCF arrives at an estimated intrinsic value of about $100.15 per share. Compared with the recent share price around $75.43, this implies the stock is about 24.7% undervalued according to this method.
Result: UNDERVALUED
Our Discounted Cash Flow (DCF) analysis suggests Service Corporation International is undervalued by 24.7%. Track this in your watchlist or portfolio, or discover 52 more high quality undervalued stocks.
Approach 2: Service Corporation International Price vs Earnings
For a profitable company like Service Corporation International, the P/E ratio is a useful way to link what you pay for each share to the earnings that the business is currently generating. Investors typically accept a higher P/E when they expect stronger earnings growth or see lower risk, and a lower P/E when growth expectations are more modest or risks are higher.
Service Corporation International currently trades on a P/E of 19.35x. This sits above the Consumer Services industry average P/E of 16.95x and above a peer group average of 13.34x, so the market is currently paying more for each dollar of earnings compared with these benchmarks.
Simply Wall St’s Fair Ratio for Service Corporation International is 21.88x. This is an estimate of what the P/E might be based on factors such as the company’s earnings profile, profit margins, industry, market cap and key risks. Because the Fair Ratio blends these fundamentals, it can give you a more tailored anchor point than a simple comparison with peers or the broad industry, which may differ in size, quality or risk.
Comparing the Fair Ratio of 21.88x with the current P/E of 19.35x suggests the shares are trading below that Fair Ratio.
Result: UNDERVALUED
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Upgrade Your Decision Making: Choose your Service Corporation International Narrative
Earlier it was mentioned that there is an even better way to understand valuation, so Narratives are introduced here as your own story for Service Corporation International that connects what you think about its preneed growth, acquisitions, cremation mix, debt and long term demographics to a set of numbers for future revenue, earnings, margins and a fair value. All of this sits within Simply Wall St’s Community page, where millions of investors build their views and see in real time how that fair value compares with today’s price. Investors can also see how buy and sell decisions might differ when, for example, one investor focuses on recurring preneed sales and a 2028 earnings estimate of US$656.4 million at a P/E near 22x, while another places more weight on cremation and acquisition risks and uses a lower multiple. They can also observe how those Narratives automatically refresh when new earnings, news or valuation inputs such as the current analyst fair value of about US$97.83, a 3.69% revenue growth assumption, a 14.49% profit margin, a 7.90% discount rate or a future P/E of about 22.96x are updated on the platform.
Do you think there's more to the story for Service Corporation International? 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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