Cintas Corp (CTAS, Financial) has recently captured the attention of investors and financial analysts with its strong financial performance. With a current share price of $766.27, Cintas Corp has experienced a daily gain of 1.02% and an impressive three-month increase of 15.27%. A detailed analysis, supported by the GF Score, indicates that Cintas Corp is poised for significant growth, making it a compelling choice for investors.
What Is the GF Score?
The GF Score is a proprietary ranking system developed by GuruFocus, assessing stocks across five key dimensions: financial strength, profitability, growth, GF Value, and momentum. These dimensions are weighted based on their correlation with long-term stock performance, as determined by extensive backtesting from 2006 to 2021. Stocks with higher GF Scores typically yield superior returns. For Cintas Corp, the GF Score is an impressive 93 out of 100, indicating a strong potential for market outperformance.
- Financial strength rank: 7/10
- Profitability rank: 10/10
- Growth rank: 10/10
- GF Value rank: 3/10
- Momentum rank: 9/10
Understanding Cintas Corp's Business
Cintas Corp, with a market cap of $77.59 billion and annual sales of $9.60 billion, operates as a comprehensive service provider of uniforms, mops, first aid kits, and fire inspections. Predominantly, its uniform and facility services unit, which constitutes the majority of its sales, offers rental programs for a diverse range of professional attire. Additionally, Cintas sells products like entrance mats, shop towels, and restroom supplies, while also providing first aid and safety services, fire protection services, and direct uniform sales.
Financial Strength and Profitability
Cintas Corp's financial robustness is evident in its Interest Coverage ratio of 20.53, significantly above the benchmark set by investment guru Benjamin Graham. The company's Altman Z-Score of 13.09 further underscores its financial stability, minimizing risks of financial distress. A Debt-to-Revenue ratio of 0.28 indicates a well-managed debt level, enhancing its financial health.
The company's profitability is also noteworthy, with an Operating Margin that has consistently improved over the past five years, reaching 21.56% in 2024. This trend is complemented by a rising Gross Margin, which stood at 48.83% in 2024, reflecting increasing efficiency in revenue conversion into profit.
Growth Trajectory
Cintas Corp's commitment to growth is evident from its Growth Rank of 10/10. The company has achieved a 3-Year Revenue Growth Rate of 12%, outperforming 60.87% of its peers in the Business Services industry. This is further supported by a strong increase in EBITDA over the past years, highlighting its capability to expand profitably.
Conclusion
Considering Cintas Corp's robust financial strength, impressive profitability, and consistent growth metrics, the GF Score effectively highlights the company's superior position for potential market outperformance. Investors looking for high-performing stocks should consider Cintas Corp as a prime candidate for their portfolios.
For more insights into companies with strong GF Scores, GuruFocus Premium members can explore our exclusive GF Score Screen.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
