It has been a few month for the reason that final earnings report for Cintas (CTAS). Shares have added about 1% in that time-frame, underperforming the S&P 500.
Will the latest optimistic pattern proceed main as much as its subsequent earnings launch, or is Cintas due for a pullback? Earlier than we dive into how buyers and analysts have reacted as of late, let’s take a fast take a look at the newest earnings report in an effort to get a greater deal with on the necessary catalysts.
Cintas’ Q1 Earnings & Revenues Surpass Estimates, View Up
Cintas reported first-quarter fiscal 2025 (ended Aug. 31, 2024) earnings of $1.10 per share, which beat the Zacks Consensus Estimate of $1.00. The underside line elevated 18.3% yr over yr regardless of a rise in working prices.
Complete revenues of $2.502 billion marginally outperformed the consensus estimate of $2.497 billion. The highest line rose 6.8% yr over yr, pushed by increased segmental revenues. Natural gross sales had been up 8% yr over yr.
Cintas’ Segmental Outcomes
The corporate has two reportable segments, Uniform Rental and Facility Companies and First Assist and Security Companies. Different companies like Uniform Direct Sale and Fireplace Safety Companies are included in All Different. Quarterly gross sales knowledge is briefly mentioned beneath.
Revenues from the Uniform Rental and Facility Companies phase (representing 77.3% of the quarter’s web gross sales) totaled $1.93 billion, up 5.9% yr over yr. Our estimate for segmental revenues was $1.93 billion.
Revenues from the First Assist and Security Companies phase (representing 11.7% of the quarter’s web gross sales) totaled $292.6 million, up 12.2% yr over yr. Our estimate for segmental revenues was $283 million.
Revenues from All Different enterprise (representing 11% of the quarter’s web gross sales) totaled $275.2 million, up 8% yr over yr. Our estimate for segmental revenues was $275.3 million.
Margin Profile
Cintas’ value of gross sales (comprising prices associated to uniform rental and facility providers and others) elevated 4.1% yr over yr to $1.25 billion. It represented roughly 49.9% of web gross sales. Gross revenue elevated 9.6% to $1.25 billion. The gross margin was 50.1% in contrast with 48.7% within the year-ago interval. Our estimate for the gross margin was pegged at 49.7%.
Promoting and administrative bills totaled $691.1 million, reflecting a 7.8% improve from the year-ago determine. It represented 27.6% of web gross sales. Working revenue elevated 12.1% yr over yr to $561 million. The working margin was 22.4% in contrast with 21.4% within the year-ago quarter. Curiosity bills elevated 4.4% to $25.6 million.
Cintas’ Stability Sheet & Money Stream
Exiting first-quarter fiscal 2025, Cintas had money and money equivalents of $101.4 million in contrast with $88.1 million on the finish of the year-ago fiscal quarter. Lengthy-term debt was about $2.03 billion in contrast with $2.48 billion on the finish of the prior fiscal yr.
Within the first three months of fiscal 2025, CTAS generated web money of $466.7 million from working actions, up 38.5% from the year-ago interval. Capital expenditures in the identical interval totaled $92.9 million, down 12.9% yr over yr. Free money circulation elevated 62.4% yr over yr to $373.8 million.
The corporate repurchased shares price $614.8 million in contrast with $73.3 million within the year-ago interval. Dividend funds totaled $138.2 million, up roughly 17.5% yr over yr.
FY25 Steering
For fiscal 2025, Cintas expects revenues to be within the vary of $10.22-$10.32 billion, increased than the sooner predicted band of $10.16-$10.31 billion. Earnings per share are estimated to be within the vary of $4.17-$4.25 in contrast with $4.06-$4.19 guided earlier.
Cintas predicts web curiosity bills of roughly $101 million. This compares with curiosity bills of $95 million recorded in fiscal 2024. The efficient tax price is anticipated to be 20.4%, which is identical in contrast with fiscal 2024.
How Have Estimates Been Transferring Since Then?
Previously month, buyers have witnessed a downward pattern in estimates evaluation.
VGM Scores
At the moment, Cintas has an incredible Development Rating of A, although it’s lagging loads on the Momentum Rating entrance with a C. Charting a considerably comparable path, the inventory was allotted a grade of D on the worth facet, placing it within the backside 40% for this funding technique.
General, the inventory has an mixture VGM Rating of C. If you happen to aren’t centered on one technique, this rating is the one you ought to be enthusiastic about.
Outlook
Estimates have been broadly trending downward for the inventory, and the magnitude of those revisions has been web zero. Notably, Cintas has a Zacks Rank #2 (Purchase). We anticipate an above common return from the inventory within the subsequent few months.
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Cintas Corporation (CTAS) : Free Stock Analysis Report
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The views and opinions expressed herein are the views and opinions of the creator and don’t essentially mirror these of Nasdaq, Inc.
