Value
6.3/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 6.3 |
| P/S | 8.6 |
| EV/EBITDA | 4.8 |
| Fwd P/E | 7.3 |
| PEG | 5.0 |
| Analyst target | 6.0 |
- ▸Forward P/E: 17.1x
- ▸PEG: 1.55
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.
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VerdictSELL
Overall score5.0/10
ConfidenceHIGH
MacroNEUTRAL
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.
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. | ↓Deteriorating |
| 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. | ↓Deteriorating |
| 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.
↓DeterioratingBear 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.
↓DeterioratingMomentum 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.
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
4.5/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 4.5 |
| MACD | 7.3 |
| OBV | 1.0 |
| MA position | 7.0 |
| Volume | 2.8 |
- ▸Volume distribution (falling OBV)
- ▸Below 200-MA (recent, shallow — too early to call)
Sentiment
6.0/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 5.0 |
| Price target | 8.2 |
| erm sentiment | 5.0 |
- ▸Analyst upside: 25%
Insider
7.3/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 10.0 |
| notable moves | 7.0 |
- ▸No net insider activity — $0 (0.000% of mkt cap)
- ▸Institutions accumulating
Peer rank
3.1/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 3.9 |
| quality rank | 4.9 |
| growth rank | 1.4 |
Technical
5.6/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 4.8 |
| support resistance | 4.4 |
| 52w position | 7.5 |
Risk (lower is worse)
5.7/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 6.7 |
| days to cover | 6.8 |
| volatility | 6.9 |
| put call | 2.9 |
| implied vol | 6.7 |
| beta | 7.9 |
| debt equity | 1.7 |
- ▸Elevated put/call: 1.57
Catalyst
5.4/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 5.6 |
| earnings timing | 5.0 |
| surprise avg | 3.2 |
| dividend safety | 8.0 |
- ▸Earnings in 8 days
- ▸Dividend aristocrat: 1.8% yield
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position.
Engine technical detail
verdict_path:
L4:PATH_F_SELLPassed (6)
- MOMENTUM:4.5>=4.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (2)
- ASYMMETRY:1.4<1.5@spot
- DEATH_CROSS:HARD_BLOCK
Warning (2)
- MOMENTUM:4.5<5.5 (soft — BUY_NOW allowed but watch)
- EARNINGS_PROXIMITY:8d<=14d (soft)
Reward-to-Risk
1.35
Upside
+8.6%
Downside
6.3%
Sizing output
AVOID
SetupRecovery — Death cross but MACD improving, RSI 54
EdgeNo clear edge — No clear edge identified
SuitabilityModerate — Balanced profile
Investment implication
The F-path SELL output reflects an overall score of 3.5 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Insider at 7.3) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( ASYMMETRY:1.4<1.5@spot, DEATH_CROSS:HARD_BLOCK) reinforce the read. Current asymmetry R:R is 1.35 — supplementary context, not the trigger for this path.
The strongest dimensions are Insider at 7.3, Value at 6.3, and Sentiment at 6.0; the weakest are Growth at 2.4, Peer rank at 3.1, and Momentum at 4.5. The V9 engine flagged 2 failed gates with 2 warnings, producing an asymmetric reward-to-risk of 1.35 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.