Overall SRCL gets a fundamental rating of 3 out of 10. We evaluated SRCL against 80 industry peers in the Commercial Services & Supplies industry. While SRCL is still in line with the averages on profitability rating, there are concerns on its financial health. SRCL is valied quite expensively at the moment, while it does show a decent growth rate.

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1. Profitability

2. Health

3. Growth

4. Valuation

5. Dividend

1. Profitability

1.1 Basic Checks

SRCL had positive earnings in the past year.
In the past year SRCL had a positive cash flow from operations.
In the past 5 years SRCL reported 4 times negative net income.
Each year in the past 5 years SRCL had a positive operating cash flow.

1.2 Ratios

SRCL's Return On Assets of 0.66% is in line compared to the rest of the industry. SRCL outperforms 42.35% of its industry peers.
SRCL's Return On Equity of 1.42% is in line compared to the rest of the industry. SRCL outperforms 44.71% of its industry peers.
SRCL's Return On Invested Capital of 3.62% is in line compared to the rest of the industry. SRCL outperforms 42.35% of its industry peers.
The Average Return On Invested Capital over the past 3 years for SRCL is significantly below the industry average of 10.58%.

		Industry Rank	Sector Rank
ROA	0.66%
ROE	1.42%
ROIC	3.62%

ROA(3y)0.05%

ROA(5y)-1.25%

ROE(3y)0.1%

ROE(5y)-3.39%

ROIC(3y)3.93%

ROIC(5y)3.93%

1.3 Margins

SRCL's Profit Margin of 1.37% is in line compared to the rest of the industry. SRCL outperforms 47.06% of its industry peers.
The Operating Margin of SRCL (8.35%) is better than 61.18% of its industry peers.
In the last couple of years the Operating Margin of SRCL has declined.
SRCL's Gross Margin of 38.58% is fine compared to the rest of the industry. SRCL outperforms 65.88% of its industry peers.
In the last couple of years the Gross Margin of SRCL has remained more or less at the same level.

		Industry Rank	Sector Rank
OM	8.35%
PM (TTM)	1.37%
GM	38.58%

OM growth 3Y1.79%

OM growth 5Y-5.31%

PM growth 3YN/A

PM growth 5YN/A

GM growth 3Y-1.25%

GM growth 5Y-1.05%

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ROA

ROE

ROIC

Operating and Profit Margin

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2. Health

2.1 Basic Checks

With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), SRCL is destroying value.
Compared to 1 year ago, SRCL has more shares outstanding
The debt/assets ratio for SRCL has been reduced compared to a year ago.

2.2 Solvency

An Altman-Z score of 2.17 indicates that SRCL is not a great score, but indicates only limited risk for bankruptcy at the moment.
SRCL has a Altman-Z score (2.17) which is comparable to the rest of the industry.
SRCL has a Debt/Equity ratio of 0.55. This is a neutral value indicating SRCL is somewhat dependend on debt financing.
SRCL has a Debt to Equity ratio of 0.55. This is comparable to the rest of the industry: SRCL outperforms 45.88% of its industry peers.

		Industry Rank	Sector Rank
Debt/Equity	0.55
Debt/FCF	N/A
Altman-Z	2.17

ROIC/WACC0.45

WACC7.97%

2.3 Liquidity

SRCL has a Current Ratio of 1.13. This is a normal value and indicates that SRCL is financially healthy and should not expect problems in meeting its short term obligations.
SRCL has a worse Current ratio (1.13) than 74.12% of its industry peers.
SRCL has a Quick Ratio of 1.13. This is a normal value and indicates that SRCL is financially healthy and should not expect problems in meeting its short term obligations.
SRCL has a worse Quick ratio (1.13) than 63.53% of its industry peers.

		Industry Rank	Sector Rank
Current Ratio	1.13
Quick Ratio	1.13

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WACC

Debt/Equity

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Altman-Z score

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3. Growth

3.1 Past

SRCL shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 9.74%, which is quite good.
Measured over the past years, SRCL shows a very negative growth in Earnings Per Share. The EPS has been decreasing by -15.70% on average per year.
SRCL shows a decrease in Revenue. In the last year, the revenue decreased by -1.68%.
Measured over the past years, SRCL shows a decrease in Revenue. The Revenue has been decreasing by -5.27% on average per year.

EPS 1Y (TTM)9.74%

EPS 3Y-5.65%

EPS 5Y-15.7%

EPS Q2Q%23.26%

Revenue 1Y (TTM)-1.68%

Revenue growth 3Y-0.2%

Revenue growth 5Y-5.27%

Sales Q2Q%-0.78%

3.2 Future

Based on estimates for the next years, SRCL will show a very strong growth in Earnings Per Share. The EPS will grow by 21.37% on average per year.
Based on estimates for the next years, SRCL will show a small growth in Revenue. The Revenue will grow by 3.90% on average per year.

EPS Next Y22.51%

EPS Next 2Y22.71%

EPS Next 3Y25.13%

EPS Next 5Y21.37%

Revenue Next Year2.13%

Revenue Next 2Y2.67%

Revenue Next 3Y3.39%

Revenue Next 5Y3.9%

3.3 Evolution

When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.

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4. Valuation

4.1 Price/Earnings Ratio

With a Price/Earnings ratio of 28.96, SRCL can be considered very expensive at the moment.
SRCL's Price/Earnings ratio is in line with the industry average.
The average S&P500 Price/Earnings ratio is at 27.21. SRCL is around the same levels.
The Price/Forward Earnings ratio is 21.78, which indicates a rather expensive current valuation of SRCL.
Based on the Price/Forward Earnings ratio, SRCL is valued a bit cheaper than 67.06% of the companies in the same industry.
SRCL is valuated at similar levels of the S&P average when we compare the Price/Forward Earnings ratio to 25.98, which is the current average of the S&P500 Index.

		Industry Rank	Sector Rank
PE	28.96
Fwd PE	21.78

4.2 Price Multiples

SRCL's Enterprise Value to EBITDA ratio is in line with the industry average.

		Industry Rank	Sector Rank
P/FCF	N/A
EV/EBITDA	16.43

4.3 Compensation for Growth

SRCL's PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
SRCL's earnings are expected to grow with 25.13% in the coming years. This may justify a more expensive valuation.