Cintas (CTAS) AI Stock Analysis

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Cintas

(NASDAQ:CTAS)

78Outperform

Cintas exhibits strong financial performance with consistent revenue and profit growth, supported by strategic management of resources and effective cash flow generation. The earnings call reinforced this strength with robust growth metrics and positive guidance. However, the high P/E ratio suggests the stock may be overvalued, and limited technical indicators provide a neutral technical outlook. Overall, the stock is well-positioned, though potential valuation concerns and external challenges should be monitored.

Positive Factors

Earnings

The company experienced strong profitability and exceeded expectations on EBIT margins, which contributed to a positive earnings per share outcome.

Revenue Growth

Revenue growth was led by the First Aid segment, continuing to show double-digit growth, which supports overall company strength.

Negative Factors

Cost Pressures

Margins likely pressured in the Fire business on higher IT costs.

Potential Headwinds

Potential headwinds could include revenue growth/operating leverage gains likely slowing modestly amid choppier macro.

Cintas (CTAS) vs. S&P 500 (SPY)

Market Cap

$81.86B

Dividend Yield0.74%

Average Volume (3M)2.27M

Price to Earnings (P/E)47.0

Beta (1Y)0.93

Revenue Growth7.79%

EPS Growth19.09%

CountryUS

Employees46,500

SectorIndustrials

Sector Strength70

IndustrySpecialty Business Services

Share Statistics

EPS (TTM)4.31

Shares Outstanding403,786,960

10 Day Avg. Volume2,977,360

30 Day Avg. Volume2,271,220

Financial Highlights & Ratios

PEG Ratio2.46

Price to Book (P/B)N/A

Price to Sales (P/S)7.76

Price to Cash Flow (P/CF)43.70

P/FCF Ratio43.70

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$218.10

Price Target Upside5.85% Upside

Rating ConsensusHold

Number of Analyst Covering12

Cintas Business Overview & Revenue Model

Company DescriptionCintas Corporation (CTAS) is a leading provider of corporate identity uniform programs, facility services, first aid and safety products, fire protection services, and document management solutions. The company operates across various sectors including healthcare, hospitality, food service, and manufacturing, offering a wide range of products and services designed to enhance workplace safety and efficiency. With its headquarters in Cincinnati, Ohio, Cintas serves businesses of all sizes throughout North America.

How the Company Makes MoneyCintas makes money primarily through its comprehensive rental and sales programs. Its core revenue streams include uniform rental and facility services, which encompass laundering and delivering uniforms and providing essential facility maintenance products like mats, mops, and restroom supplies. The company also generates income from selling first aid and safety products, offering fire protection services, and providing document management solutions. Cintas benefits from long-term contracts and recurring revenue due to the essential nature of its services and products. Additionally, strategic partnerships with businesses across various industries contribute to stable revenue growth and expand its market reach.

Cintas Financial Statement Overview

Summary

Cintas is showcasing strong financial performance with substantial revenue and profit growth, supported by efficient cost management and cash generation. The company maintains a robust balance sheet with low leverage, although reduced liquidity could be a concern. Overall, Cintas is in a strong financial position, poised for continued growth in the corporate services industry.

Income Statement

Very Positive

Cintas has demonstrated strong revenue growth, with a 12.76% increase in total revenue from 2023 to TTM (Trailing-Twelve-Months). Gross profit margin remains robust at 49.13%, indicating efficient cost management. Net profit margin is also solid at 17.23%. However, the EBITDA margin slightly decreased from 26.30% in 2023 to 24.75% in TTM, showing a small dip in operational efficiency.

Balance Sheet

Positive

The company's balance sheet shows a healthy equity ratio of 49.87% in TTM, suggesting a strong financial foundation. The debt-to-equity ratio is 0.19, reflecting low leverage and reduced financial risk. Return on equity is impressive at 39.88%, showcasing efficient use of equity. However, the decrease in cash reserves from $342 million in 2023 to $122 million in TTM presents a liquidity concern.

Cash Flow

Very Positive

Cintas has achieved a significant 46.45% growth in free cash flow from 2023 to TTM, indicating strong cash generation capabilities. The operating cash flow to net income ratio is favorable at 1.32, highlighting effective conversion of earnings into cash. However, a decrease in cash reserves may affect short-term liquidity management.

TTM	Jun 2024	Jun 2023	Jun 2022	Jun 2021	Jun 2020
Breakdown
Income Statement		Total Revenue
10.14B	9.60B	8.82B	7.85B	7.12B	7.09B
	Gross Profit
5.02B	4.69B	4.17B	3.63B	3.31B	3.23B
	EBIT
2.31B	2.07B	1.80B	1.59B	1.39B	1.16B
	EBITDA
2.70B	2.52B	2.22B	1.99B	1.77B	1.54B
	Net Income Common Stockholders
1.78B	1.57B	1.35B	1.24B	1.11B	876.04M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
243.43M	342.01M	124.15M	90.47M	493.64M	145.40M
	Total Assets
9.61B	9.17B	8.55B	8.15B	8.24B	7.67B
	Total Debt
664.37M	2.67B	2.67B	2.97B	2.72B	2.71B
	Net Debt
420.94M	2.33B	2.54B	2.88B	2.22B	2.56B
	Total Liabilities
5.02B	4.85B	4.68B	4.84B	4.55B	4.43B
	Stockholders Equity
4.59B	4.32B	3.86B	3.31B	3.69B	3.24B
Cash Flow		Free Cash Flow
1.83B	1.67B	1.27B	1.30B	1.22B	1.06B
	Operating Cash Flow
2.22B	2.08B	1.60B	1.54B	1.36B	1.29B
	Investing Cash Flow
-579.73M	-608.63M	-388.67M	-402.63M	-137.22M	-285.40M
	Financing Cash Flow
-1.52B	-1.25B	-1.17B	-1.54B	-879.87M	-955.21M

Cintas Technical Analysis

Technical Analysis Sentiment

Positive

Last Price206.04

Price Trends

50DMA

201.11

Positive

100DMA

202.18

Positive

200DMA

199.92

Positive

Market Momentum

MACD

0.95

Negative

RSI

60.37

Neutral

STOCH

68.59

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CTAS, the sentiment is Positive. The current price of 206.04 is above the 20-day moving average (MA) of 199.17, above the 50-day MA of 201.11, and above the 200-day MA of 199.92, indicating a bullish trend. The MACD of 0.95 indicates Negative momentum. The RSI at 60.37 is Neutral, neither overbought nor oversold. The STOCH value of 68.59 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for CTAS.

Cintas Risk Analysis

Cintas disclosed 19 risk factors in its most recent earnings report. Cintas reported the most risks in the “Finance & Corporate” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Cintas Peers Comparison

Overall Rating

UnderperformOutperform

Sector (62)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
UNF	79 Outperform	$3.09B	21.52	7.17%	0.79%	5.04%	31.69%
CTAS	78 Outperform	$81.86B	47.04	40.15%	0.74%	7.79%	19.09%
RTO	71 Outperform	$10.90B	28.07	7.44%	2.34%	3.96%	-17.48%
CBZ	69 Neutral	$4.11B	69.41	3.19%	―	13.97%	-54.48%
ABM	66 Neutral	$2.82B	35.73	4.46%	2.08%	2.81%	-67.57%
Sector *	62 Neutral	$7.50B	12.89	3.19%	3.38%	3.64%	-14.27%
ARMK	60 Neutral	$9.01B	26.76	11.46%	1.22%	-5.98%	-46.55%

* Industrials Sector Average

Performance Comparison

CTAS

Cintas

206.04

40.22

24.26%

ABM

ABM Industries

46.11

3.38

7.91%

CBZ

CBIZ

77.73

3.72

5.03%

UNF

UniFirst

174.15

13.95

8.71%

ARMK

ARAMARK Holdings

33.13

1.89

6.05%

RTO

Rentokil Initial

22.49

-5.15

-18.63%

Cintas Earnings Call Summary

Earnings Call Date: Mar 26, 2025 | % Change Since: 6.50% | Next Earnings Date: Jul 10, 2025

Earnings Call Sentiment Positive

Cintas Corporation reported strong third quarter results with significant revenue growth, record gross margin, and increased operating income. The company also saw robust EPS growth and strong free cash flow. Strategic acquisitions and updated positive financial guidance further emphasize a strong performance. However, challenges such as the negative impact of foreign exchange rates, termination of UniFirst acquisition discussions, a decline in uniform direct sales, potential tariff impacts, and fewer workdays negatively affecting revenue growth were noted.

Highlights

Strong Revenue Growth

Third quarter total revenue grew 8.4% to $2.61 billion, with an organic growth rate of 7.9%.

Record Gross Margin

Gross margin for the third quarter grew 11.1% over the prior year to 50.6%, an all-time high.

Increased Operating Income

Operating income increased 17.1% to 23.4%, setting a new all-time high.

Robust EPS Growth

Diluted EPS grew 17.7% to $1.13, reflecting strong earnings growth.

Strong Free Cash Flow

Free cash flow for the first nine months increased 14.5% over the prior year.

Successful Strategic Acquisitions

Strategic acquisitions were made across all three route-based segments.

Updated Positive Financial Guidance

Annual revenue expectations updated to a range of $10.28 billion to $10.305 billion, with an organic revenue growth guidance of 7.4% to 7.7%.

Lowlights

Negative Impact from Foreign Exchange Rates

Third quarter revenue growth negatively impacted by 40 basis points due to foreign exchange rates.

Termination of UniFirst Acquisition Discussions

Cintas terminated discussions with UniFirst regarding a proposed acquisition due to lack of substantive engagement.

Uniform Direct Sale Decline

Uniform direct sale was down 2.3% in the quarter.

Potential Tariff Impact

Concerns about potential increased costs from tariffs on Mexico and China.

Fewer Workdays Impact

Two fewer workdays in fiscal 2025 compared to fiscal 2024, negatively impacting revenue growth by about 80 basis points for the year.

Company Guidance

During the Cintas Corporation's fiscal 2025 third-quarter earnings call, the company reported a robust set of financial metrics, showcasing strong performance and operational excellence. Total revenue for the third quarter increased by 8.4% to $2.61 billion, with an organic growth rate of 7.9%. The company achieved an all-time high gross margin of 50.6%, up 11.1% from the previous year. Operating income rose by 17.1% to 23.4% of revenue, also marking an all-time high. Excluding a $15 million gain from a property sale, the operating margin was 22.8%, the second highest in Cintas history. Diluted EPS grew by 17.7% to $1.13. The company experienced strong growth across its business segments, including a 7% organic growth in uniform rental and facility services and double-digit growth in first aid and safety services as well as fire protection services. Cintas updated its annual revenue guidance to a range of $10.28 billion to $10.305 billion and raised its annual diluted EPS expectations to between $4.36 and $4.40, reflecting a growth rate of 15% to 16.1%. The company emphasized its focus on operational efficiencies, sourcing initiatives, and technology investments, such as leveraging its SAP system and SmartTruck technology to enhance margins and customer experience.

Cintas Corporate Events

Executive/Board Changes

Cintas Announces CFO Transition Effective June 2025

Neutral

Apr 4, 2025

On April 4, 2025, Cintas Corporation announced the retirement of J. Michael Hansen from his role as Executive Vice President & Chief Financial Officer, effective May 31, 2025. Hansen will transition to a new role as Assistant to the CEO, supporting strategic initiatives and the transition to his successor, Scott Garula. Garula, who joined Cintas in 1996 and has held various leadership roles, will assume the position of Executive Vice President & CFO on June 1, 2025. His appointment is part of a planned succession process, and he is expected to continue Cintas’ financial strategy aimed at growth and shareholder value creation.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.