What Does Service Corporation International’s Recent Expansion Mean for Its 2025 Valuation?

• Wondering if Service Corporation International is trading for a bargain or already priced for perfection? You are not alone, and getting a handle on fair value is crucial before you commit your cash.
• Shares have drifted a bit this year, rising 3.5% year-to-date but sliding 5.9% over the past 12 months, so sentiment around future growth and risk could be shifting.
• Recent headlines have focused on Service Corporation International's expansion into new geographic markets and a series of strategic acquisitions, which have caught investors' attention. These moves are shaping the outlook for the company and fueling discussion about where the stock might head next.
• Right now, the company scores just 2 out of 6 on our valuation checks, so it is worth taking a closer look at how different approaches stack up. There is an even smarter way to judge value coming up later.

Service Corporation International scores just 2/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.

Approach 1: Service Corporation International Discounted Cash Flow (DCF) Analysis

The Discounted Cash Flow (DCF) model estimates a company's value by extrapolating future cash flow projections and discounting them back to today's value. This reflects the time value of money. This approach focuses on the cash the business can generate for its shareholders in the future.

For Service Corporation International, recent data shows trailing twelve-month Free Cash Flow stands at $590.8 Million. Analyst estimates indicate that annual free cash flow could grow steadily, with projections for 2027 reaching $665 Million. Beyond analyst coverage, additional projections estimate Free Cash Flow will rise incrementally through 2035, primarily based on modest growth rates supplied by Simply Wall St extrapolation.

Applying these forecasts into the DCF model, the estimated intrinsic value of the stock is $102.92 per share. This is roughly 22.1% above the current market price, suggesting that shares are notably undervalued based on this methodology.

In summary, the cash flow outlook for Service Corporation International supports a higher valuation than where the stock trades today.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests Service Corporation International is undervalued by 22.1%. Track this in your watchlist or portfolio, or discover 863 more undervalued stocks based on cash flows.

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

Approach 2: Service Corporation International Price vs Earnings

For consistently profitable companies like Service Corporation International, the Price-to-Earnings (PE) ratio is a widely used way to gauge whether the market price is reasonable. The PE ratio indicates how much investors are willing to pay for each dollar of earnings. A higher figure can signal expectations for above-average growth or lower perceived risk, while a lower ratio may suggest slower growth prospects or higher risks.

Currently, Service Corporation International trades at 21x earnings. That is noticeably higher than the Consumer Services industry average of 15.87x and its peer group’s average of 12.87x. At first glance, this premium could suggest the stock is expensive relative to comparable companies.

Simply Wall St's Fair Ratio is a proprietary valuation tool designed to set a more nuanced benchmark. It factors in not just industry group, but company-specific details like growth outlook, profit margins, market cap, and risk profile. For Service Corporation International, the Fair Ratio stands at 20.60x, which is only a modest 0.4x below the company’s actual PE ratio. This suggests that, while the shares trade above industry and peer averages, the market is pricing them at a level quite close to what sophisticated valuation models would expect, given the company’s unique characteristics.

Result: ABOUT RIGHT

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1400 companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your Service Corporation International Narrative

Earlier, we mentioned there is an even better way to judge value. Let us introduce you to Narratives. A Narrative is simply your story about a company, where you connect your own perspective on what you think will happen to Service Corporation International’s future revenue, earnings, and margins to a financial forecast. This then leads to your own estimate of fair value.

This approach links the numbers with the real-life reasons behind them. It allows you to look beyond formulas and focus on what really matters: the company’s outlook and risks, as you see them. Narratives are straightforward and interactive, available on Simply Wall St’s Community page, where millions of investors share their views and updates.

By creating or following Narratives, you can easily compare your Fair Value with the latest market price and decide whether the stock is a buy, hold, or sell based on your convictions. Narratives update automatically whenever new news or earnings data arrives, so your view stays current with the company’s own story as it develops.

For example, some investors believe recent dividend increases, strong recurring revenue, and share buybacks could push Service Corporation International’s fair value as high as $95.40. Others, concerned about rising debt and shifting demographics, see fair value closer to $79.44. Your Narrative can help you cut through the noise and make smarter, more personalized investment decisions.

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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