Seeking Alpha author gives another Service Corp opinion

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Last week was Earnings Release week for Service Corporation International (SCI) and readers of Funeral Director Daily are getting their second consecutive article on the company’s performance in this update.  This morning’s article was headlined, “Firing on all cylinders”.

Investor information network Seeking Alpha published an article last week from Lighting Rock Research that you can access here, about SCI and it’s 2nd Quarter 2025 report titled “As steady as she goes”.  It in many ways reaffirms what Funeral Director Daily said about the 2nd Quarter and Half-Year performance of the company so far in 2025 but goes a little bit further making some projections for the future.

In a short sentence Lighting Rock Research makes this comment about the future of SCI, “The company’s stable business model, direct sales transition, and acquisition strategy position it for 5% organic revenue growth from FY26 onward.”

Included in the article is the following chart which the authors use to feature what they believe will be the financial performance of Service Corporation moving forward.  As you can see it projects Revenue, Operating Profits, Net Profits and more through the year 2034.

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Projections of SCI’s Revenue, Operating Profits, Net Profits, Free Cash-Flow and more through 2034

Lighting Rock Research mentions two risk factors for SCI going forward.  Here is what they think those may be:

1. In the U.S. market, many Hispanic and Asian customers prefer cemetery services. Due to the Trump administration’s immigration policy, I think some Hispanic and Asian populations might leave the U.S.  If that occurs, the population mix change could pose some growth challenges to Service Corporation..
2. In addition, the gross margin of its cemetery business declined by 110basis points during the quarter, caused by higher sales compensations. Investors need to closely monitor the company’s gross margin in the upcoming quarters to ensure these elevated sales compensation payments do not become a persistent issue.

Funeral Director Daily take:  There has been a lot of anxiety about Death Care moving forward.  The positivity of this article was a refreshing change from some of the bleak predictions of Death Care moving into the future.  I think it shows that the glass is either half-full or half-empty in someone’s opinion.

Lighting Rock Research predicts a “5% organic revenue growth” for SCI annually for the next decade.  In a Death Care world where we see some providers dealing with a Direct Cremation induced revenue decrease that is, in my estimation, a bold prediction that if it rings true indicates a very positive future for SCI.

The projections show an even stronger company going into the future that uses the cash it generates to no only continue growing with acquisitions, but also rewards existing shareholders by reducing the number of shares outstanding through internal stock buy-backs.

As you look at the projection chart, the projections show Revenue going from $4.3 billion to 7.4 billion — a compounded 72% increase in the next ten years.  The projections also show Net Profits more than doubling from $548 million to $1.24 billion in that same time period.

If SCI truly hits those numbers it should mean business is good for Death Care in North America.

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