Value
6.3/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 6.3 |
| P/S | 8.6 |
| EV/EBITDA | 4.7 |
| Fwd P/E | 7.2 |
| PEG | 5.0 |
| Analyst target | 6.0 |
- ▸Forward P/E: 17.3x
- ▸PEG: 1.51
SCI · Why this verdict
Why Service Corporation Internation (SCI) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
Show full disclosure ▾Hide full disclosure ▴
About TrendMatrix. TrendMatrix is a publisher of general securities research and market commentary. We publish on a regular schedule. All content is the same for every subscriber in a tier — we do not provide personalized investment advice and we do not take into account any individual subscriber's financial situation, investment objectives, risk tolerance, tax situation, or holdings.
Not investment advice. TrendMatrix is not a registered investment adviser. Our content is for informational and educational purposes only. Consult your own licensed investment adviser, broker, or tax professional before making any investment decision.
Conflicts and positions. The TrendMatrix editorial team frequently holds personal long-term positions in securities discussed. We disclose positions held at the time of publication on each piece. We maintain a trading-window policy: we do not initiate or close positions in the same direction as a TrendMatrix publication within 24 hours before or 72 hours after publication.
No paid promotion. TrendMatrix does not accept payment from any issuer, broker, or third party in exchange for coverage of any security. Our sole compensation is subscription revenue.
No fiduciary duty. No fiduciary, advisory, or agency relationship is created between you and TrendMatrix by reading our content or subscribing to our service.
Performance. Past performance is not indicative of future results. Performance figures reflect the published model only and do not reflect any individual subscriber's actual results.
VerdictSELL
Overall score4.9/10
ConfidenceHIGH
MacroNEUTRAL
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Return on equity of 33% is exceptional for a consumer services company and ranks at the maximum score, indicating the company generates strong shareholder returns even though the high debt level of 3.3x debt-to-equity inflates this metric through financial leverage. Quality breakdown | Return on equity remains above 20% and operating margin stays above 15% in at least 3 of the next 4 quarters. | →Stable |
| CounterA 33% return on equity driven by 3.3x financial leverage is a double-edged sword; if interest rates rise or revenue softens, the fixed debt service burden can rapidly turn strong returns into losses. | ||
Debt-to-equity of 3.3x triggers a leverage penalty in the scoring, reflecting that the company's capital structure is aggressive enough to create financial risk in a rising-rate or revenue-decline scenario. Bear case | Debt-to-equity ratio declines below 2.5x within 24 months as the company uses operating cash flow to reduce leverage. | →Stable |
| CounterThe funeral services industry has extremely stable, recession-resistant demand driven by demographics; high leverage in this sector is a common and well-understood capital structure choice that has been sustained without distress for decades at these companies. | ||
Analysts see 30% upside to the consensus target and the LLM news sentiment score is +0.50 out of 1.0, reflecting a positive narrative environment that supports multiple expansion from the current forward multiple of 16.2x. Sentiment breakdown | Price rises above $83, more than 12% above the current $73.96, as positive sentiment and improving earnings attract growth-oriented investors. | →Stable |
| CounterThe 30% analyst upside has been in place through a period of weak earnings delivery; if the underlying demographic demand tailwind for funeral services is already priced in, sentiment alone will not close the gap. | ||
Price momentum of 5.8 out of 10 is recovering from a death cross with MACD improving and rising on-balance volume indicating institutional accumulation below the 200-day moving average, which is a constructive technical setup for a gradual recovery. Momentum breakdown | Momentum score rises above 6.5 and price crosses back above the 200-day moving average within 90 days. | →Stable |
| CounterDeath cross recoveries with below-200MA price action frequently fail on the first attempt; the flat 200-day MA slope suggests there is no upward trend being recovered into, making the recovery thesis more uncertain. | ||
Return on equity of 33% is exceptional for a consumer services company and ranks at the maximum score, indicating the company generates strong shareholder returns even though the high debt level of 3.3x debt-to-equity inflates this metric through financial leverage.
→StableQuality breakdown
- Expectation
- Return on equity remains above 20% and operating margin stays above 15% in at least 3 of the next 4 quarters.
CounterA 33% return on equity driven by 3.3x financial leverage is a double-edged sword; if interest rates rise or revenue softens, the fixed debt service burden can rapidly turn strong returns into losses.
Debt-to-equity of 3.3x triggers a leverage penalty in the scoring, reflecting that the company's capital structure is aggressive enough to create financial risk in a rising-rate or revenue-decline scenario.
→StableBear case
- Expectation
- Debt-to-equity ratio declines below 2.5x within 24 months as the company uses operating cash flow to reduce leverage.
CounterThe funeral services industry has extremely stable, recession-resistant demand driven by demographics; high leverage in this sector is a common and well-understood capital structure choice that has been sustained without distress for decades at these companies.
Analysts see 30% upside to the consensus target and the LLM news sentiment score is +0.50 out of 1.0, reflecting a positive narrative environment that supports multiple expansion from the current forward multiple of 16.2x.
→StableSentiment breakdown
- Expectation
- Price rises above $83, more than 12% above the current $73.96, as positive sentiment and improving earnings attract growth-oriented investors.
CounterThe 30% analyst upside has been in place through a period of weak earnings delivery; if the underlying demographic demand tailwind for funeral services is already priced in, sentiment alone will not close the gap.
Price momentum of 5.8 out of 10 is recovering from a death cross with MACD improving and rising on-balance volume indicating institutional accumulation below the 200-day moving average, which is a constructive technical setup for a gradual recovery.
→StableMomentum breakdown
- Expectation
- Momentum score rises above 6.5 and price crosses back above the 200-day moving average within 90 days.
CounterDeath cross recoveries with below-200MA price action frequently fail on the first attempt; the flat 200-day MA slope suggests there is no upward trend being recovered into, making the recovery thesis more uncertain.
TrendMatrix Research · core thesis
Engine thesis — one sentence
Service Corporation International is a funeral services company with a 33% return on equity, 13.3% upside to the analyst target, and improving price momentum in a death cross recovery setup, but carries heavy debt at 3.3x debt-to-equity and has delivered below-average earnings relative to estimates with only 2 beats in the last 4 quarters.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Per-dimension breakdown
Quality
5.0/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 10.0 |
| ROA | 2.3 |
| Gross margin | 1.2 |
| Op margin | 8.8 |
| Net margin | 6.2 |
| Current ratio | 2.3 |
| FCF quality | 5.3 |
| Moat | 4.9 |
| Piotroski F | 4.4 |
- ▸Excellent ROE: 33%
- ▸Earnings quality warning: 69% FCF/NI
- ▸No competitive moat
Growth
2.4/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 3.0 |
| EPS growth | 1.8 |
Momentum
6.2/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 3.6 |
| MACD | 10.0 |
| OBV | 10.0 |
| MA position | 6.5 |
| Volume | 1.1 |
- ▸Volume accumulation (rising OBV)
- ▸Below 200-MA, MA slope flat
Sentiment
6.0/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 5.0 |
| Price target | 8.0 |
| erm sentiment | 5.0 |
- ▸Analyst upside: 23%
Insider
5.0/10data confidence 50%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 5.1 |
- ▸No net insider activity — $0 (0.000% of mkt cap)
Peer rank
4.0/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 4.6 |
| quality rank | 4.9 |
| growth rank | 1.4 |
Technical
2.7/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 0.1 |
| support resistance | 0.1 |
| 52w position | 7.8 |
Risk (lower is worse)
6.3/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 7.1 |
| days to cover | 6.6 |
| volatility | 6.0 |
| put call | 10.0 |
| implied vol | 5.1 |
| beta | 7.9 |
| debt equity | 1.7 |
Catalyst
5.2/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 5.6 |
| earnings timing | 5.0 |
| surprise avg | 3.2 |
| dividend safety | 7.0 |
- ▸Dividend: 183.0%
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position.
Engine technical detail
verdict_path:
L4:PATH_F_SELLPassed (7)
- MOMENTUM:6.2>=5.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:26d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:0.5<1.5@spot
Warning (1)
- DEATH_CROSS:momentum=6.2>=5.0 recovering
Reward-to-Risk
0.54
Upside
+6.7%
Downside
12.3%
Sizing output
AVOID
SetupRecovery — Death cross but MACD improving, RSI 64
EdgeNo clear edge — No clear edge identified
SuitabilityModerate — Balanced profile
Investment implication
The F-path SELL output reflects an overall score of 3.4 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Value at 6.3) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( ASYMMETRY:0.5<1.5@spot) reinforce the read. Current asymmetry R:R is 0.54 — supplementary context, not the trigger for this path.
The strongest dimensions are Value at 6.3, Risk (lower is worse) at 6.3, and Momentum at 6.2; the weakest are Growth at 2.4, Technical at 2.7, and Peer rank at 4.0. The V9 engine flagged 1 failed gate with 1 warning, producing an asymmetric reward-to-risk of 0.54 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1High Roe Despite Debt Leverage
Trip ifReturn on equity falls below 15% or operating margin drops below 10% in any reported quarter.
- P2Analyst Upside And Positive Sentiment
Trip ifAnalyst consensus price target drops below $70, more than 5% below the current $73.96, indicating downward revisions to the bullish case.
- P3Momentum Recovery Volume Accumulation
Trip ifMomentum score drops below 4.5 or on-balance volume reverses from accumulation to distribution for more than 30 consecutive trading days.
- P4Heavy Debt Load Constraint
Trip ifDebt-to-equity ratio rises above 4.0, increasing by more than 0.7 turns from the current 3.3x level.