Strong Q3 Results and Raised Cash Flow Outlook Could Be a Game Changer for SCI (SCI)

• Service Corporation International reported third quarter 2025 results in the past week, with quarterly revenue of US$1.06 billion and adjusted earnings per share of US$0.87, both exceeding analyst expectations and reflecting growth in the cemetery segment.
• Management raised its 2025 cash flow guidance and reaffirmed the earnings midpoint, signaling confidence in the company’s operational strength and its ability to generate robust future cash flows.
• We’ll examine how Service Corporation International’s stronger operational performance and raised cash flow outlook may alter its investment narrative.

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Service Corporation International Investment Narrative Recap

SCI’s investment case hinges on stable cash flows from prearranged funeral and cemetery sales, supported by demographic tailwinds and disciplined capital allocation. The latest quarterly beat, driven by strong cemetery segment growth and increased preneed sales, reinforces its near-term cash flow catalyst, while the update to full-year guidance does not materially alter current risk factors, most notably ongoing pressure from the shift toward lower-margin cremation services.

The most immediately relevant announcement is management’s decision to raise 2025 cash flow guidance after solid third-quarter results. This highlights SCI’s confidence in operating execution, especially given the continued strength in preneed cemetery sales, which remains a key driver as the company works to offset headwinds from cremation and sustain revenue growth momentum into 2026.

However, the long-term impact of rising cremation rates remains an important factor investors should be mindful of, particularly as...

Read the full narrative on Service Corporation International (it's free!)

Service Corporation International's outlook suggests $4.7 billion in revenue and $656.4 million in earnings by 2028. This is based on a 3.5% annual revenue growth rate and a $121.5 million increase in earnings from the current $534.9 million.

Uncover how Service Corporation International's forecasts yield a $93.80 fair value, a 12% upside to its current price.

Exploring Other Perspectives

Simply Wall St Community members provided two fair value estimates for SCI, ranging from US$93.80 to US$99.35 per share. While many anticipate future cash flow strength from prearranged sales, others are weighing the risks posed by cremation trends and evolving consumer preferences.

Explore 2 other fair value estimates on Service Corporation International - why the stock might be worth just $93.80!

Build Your Own Service Corporation International Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Service Corporation International research is our analysis highlighting 3 key rewards and 3 important warning signs that could impact your investment decision.
• Our free Service Corporation International research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Service Corporation International's overall financial health at a glance.

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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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