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Service Corporation International

Intrinsic Value Analysis (Discounted Cash Flow)Industry: Personal Products & ServicesSector: Consumer Cyclical

Fair Value Summary

Current Price$78.14
5Y Range63.14 – 111.80
5Y Selected87.47
(-) Safety Margin60.59%
5Y Buy Price$34.47
Upside (to Buy Price)-55.89%
10Y Range73.13 – 123.03
10Y Selected98.08
(-) Safety Margin60.59%
10Y Buy Price$38.65
Upside (to Buy Price)-50.53%

Company Predictability & Safety

MetricValue
Revenue R2 (5Y)0.5416
Revenue R2 (10Y)0.8869
Net Income R2 (5Y)0.1141
Net Income R2 (10Y)0.4314
EBITDA R2 (5Y)0.0389
EBITDA R2 (10Y)0.7620
FCF R2 (5Y)0.1647
FCF R2 (10Y)0.6456
Safety Score0.3941

DA 10-Year Projection

Metric2025202620272028202920302031203220332034
% Growth9.37%8.77%8.18%7.58%6.98%6.39%5.79%5.19%4.60%4.00%
Revenue4,578.704,980.465,387.755,796.206,201.016,597.096,979.097,341.567,679.047,986.20
EBITDA1,337.591,454.951,573.941,693.261,811.521,927.222,038.822,144.712,243.292,333.03
D&A-345.78-376.12-406.88-437.73-468.30-498.21-527.06-554.43-579.92-603.12
EBIT991.801,078.831,167.051,255.531,343.221,429.011,511.761,590.271,663.371,729.91
Pro forma Taxes-191.90-208.74-225.81-242.92-259.89-276.49-292.50-307.69-321.84-334.71
NOPAT799.91870.09941.251,012.601,083.331,152.521,219.261,282.581,341.541,395.20
Capital Expenditures-346.84-377.27-408.13-439.07-469.73-499.73-528.67-556.13-581.69-604.96
NWC Investment45.1546.2346.8747.0046.5945.5843.9641.7138.8435.35
(+) D&A345.78376.12406.88437.73468.30498.21527.06554.43579.92603.12
Free Cash Flow844.00915.18986.871,058.271,128.481,196.581,261.611,322.601,378.601,428.70
Diluted Shares Outstanding144,710,500.00144,710,500.00144,710,500.00144,710,500.00144,710,500.00144,710,500.00144,710,500.00144,710,500.00144,710,500.00144,710,500.00

Discounting Periods

MetricDec-25Dec-26Dec-27Dec-28Dec-29Dec-30Dec-31Dec-32Dec-33Dec-34
Period Start9/30/251/1/261/1/271/1/281/1/291/1/301/1/311/1/321/1/331/1/34
Period End12/31/2512/31/2612/31/2712/31/2812/31/2912/31/3012/31/3112/31/3212/31/3312/31/34
Mid-Point11/15/257/2/267/2/277/1/287/2/297/2/307/2/317/1/327/2/337/2/34
Time (t)0.100.461.462.463.464.465.466.467.468.46
Valuation Date1/16/26

Base Case Projected Flows

WACC: 9.10%Terminal Growth: 2.44%
Metric2025202620272028202920302031203220332034TV (5y)TV (10y)
Discount Factor0.990.960.880.810.740.680.620.570.520.48
PV UFCF836.68879.25869.06854.21834.92811.48784.23753.58719.99683.93
Raw: 17,372.37
12,305.65
Raw: 21,994.18
10,080.21

Base Case Valuation

5-Year Horizon10-Year Horizon
UFCFUFCF
Enterprise Value16,579.7718,107.54
(-) Net Debt4,715.354,715.35
Equity Value11,864.4313,392.20
(/) Shares Out144.71144.71
Fair Value$81.99$92.54
(-) Safety Margin60.59%60.59%
Buy Price$32.31$36.47
Current Price$78.14$78.14
Upside (to Buy Price)-58.65%-53.32%

Conservative Projected Flows

WACC: 10.10%Terminal Growth: 1.94%
Metric2025202620272028202920302031203220332034TV (5y)TV (10y)
Discount Factor0.990.960.870.790.720.650.590.540.490.44
PV UFCF835.92875.56857.56835.25808.98779.12746.12710.45672.61633.12
Raw: 14,107.59
9,638.43
Raw: 17,860.83
7,543.24

Conservative Valuation

5-Year Horizon10-Year Horizon
UFCFUFCF
Enterprise Value13,851.7015,297.93
(-) Net Debt4,715.354,715.35
Equity Value9,136.3510,582.59
(/) Shares Out144.71144.71
Fair Value$63.14$73.13
(-) Safety Margin60.59%60.59%
Buy Price$24.88$28.82
Current Price$78.14$78.14
Upside (to Buy Price)-68.16%-63.12%

Aggressive Projected Flows

WACC: 8.10%Terminal Growth: 2.94%
Metric2025202620272028202920302031203220332034TV (5y)TV (10y)
Discount Factor0.990.960.890.830.760.710.650.600.560.52
PV UFCF837.45882.98880.82873.78861.95845.50824.67799.77771.19739.34
Raw: 22,537.28
16,557.07
Raw: 28,533.19
14,201.82

Aggressive Valuation

5-Year Horizon10-Year Horizon
UFCFUFCF
Enterprise Value20,894.0622,519.28
(-) Net Debt4,715.354,715.35
Equity Value16,178.7217,803.94
(/) Shares Out144.71144.71
Fair Value$111.80$123.03
(-) Safety Margin60.59%60.59%
Buy Price$44.06$48.49
Current Price$78.14$78.14
Upside (to Buy Price)-43.61%-37.95%

Reverse DCF: Market Implied Growth

Current Price$78.14
WACC Used9.1%
IMPLIED REVENUE GROWTH136.88%
Metric2027202820292030203120322033203420352036
Implied Revenue10,163.7724,075.6857,029.86135,090.87319,999.80758,007.331,795,548.384,253,249.0610,074,987.5423,865,372.71
Constant Implied Growth136.88%136.88%136.88%136.88%136.88%136.88%136.88%136.88%136.88%136.88%
Implied Free Cash Flow1.022.415.7013.5132.0075.80179.55425.321,007.502,386.54
Discount Factor0.930.810.740.680.620.570.520.480.440.40
Present Value of Implied FCF0.951.944.229.1619.8943.1993.77203.61442.08959.85

Rolling Historical DCF (Backtest)

Valuation based on actual realized growth.
YearValuation DateActual PriceRealized Growth (5Y)Calculated Fair ValueValuation Delta
20192019-12-31$46.038.40%$27.47-40.32%
20182018-12-31$40.2611.29%$30.21-24.97%
20172017-12-31$37.3211.30%$20.66-44.65%
20162016-12-31$28.409.38%$18.46-35.00%
20152015-12-31$26.025.44%$15.43-40.69%
20142014-12-31$22.704.55%$1.40-93.83%
20132013-12-31$18.135.17%$9.27-48.88%
20122012-12-31$13.817.25%$15.6113.04%
20112011-12-31$10.658.91%$17.9368.38%
20102010-12-31$8.2510.61%$17.66114.02%
20092009-12-31$8.1911.57%$21.44161.75%
20082008-12-31$4.9710.22%$11.08122.89%
20072007-12-31$14.057.70%$8.65-38.45%
20062006-12-31$10.254.69%$7.62-25.70%
20052005-12-31$8.187.95%$12.4952.66%
20042004-12-31$7.4510.64%$-2.17-129.13%
20032003-12-31$5.3910.52%$15.21182.19%
20022002-12-31$3.320.94%$7.41123.31%
20012001-12-31$4.99-8.47%$2.29-54.12%
20002000-12-31$1.75-11.57%$-6.62-478.55%
19991999-12-31$6.94-9.97%$-10.43-250.32%
19981998-12-31$38.06-10.67%$-36.79-196.65%
19971997-12-31$36.75-10.51%$-8.20-122.32%
19961996-12-31$28.00-4.85%$-8.16-129.15%
19951995-12-31$22.000.44%$-5.58-125.38%

Monte Carlo Simulation (1,000 Iterations)

Mean Fair Value
$95.92
Median
$93.26
10th Percentile
$71.34
90th Percentile
$123.09

Fair Value Distribution

$52.81 - $61.63
23
$61.63 - $70.45
65
$70.45 - $79.27
144
$79.27 - $88.08
176
$88.08 - $96.90
151
$96.90 - $105.72
149
$105.72 - $114.54
132
$114.54 - $123.36
61
$123.36 - $132.18
37
$132.18 - $141.00
25
$141.00 - $149.82
21
$149.82 - $158.63
6
$158.63 - $167.45
1
$167.45 - $176.27
3
$176.27 - $185.09
2
$185.09 - $193.91
2
$193.91 - $202.73
1
$202.73 - $211.55
0
$211.55 - $220.37
0
$220.37 - $229.18
1