Taking everything into account, SRCL scores 3 out of 10 in our fundamental rating. SRCL was compared to 80 industry peers in the Commercial Services & Supplies industry. There are concerns on the financial health of SRCL while its profitability can be described as average. While showing a medium growth rate, SRCL is valued expensive at the moment.

Quickly go to:

1. Profitability

2. Health

3. Growth

4. Valuation

5. Dividend

1. Profitability

1.1 Basic Checks

SRCL had positive earnings in the past year.
SRCL had a positive operating cash flow in the past year.
SRCL had negative earnings in 4 of the past 5 years.
SRCL had a positive operating cash flow in each of the past 5 years.

1.2 Ratios

SRCL has a Return On Assets (0.66%) which is in line with its industry peers.
The Return On Equity of SRCL (1.42%) is comparable to the rest of the industry.
SRCL has a Return On Invested Capital (3.62%) which is comparable to the rest of the industry.
Measured over the past 3 years, the Average Return On Invested Capital 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 has a Profit Margin of 1.37%. This is comparable to the rest of the industry: SRCL outperforms 47.06% of its industry peers.
With a decent Operating Margin value of 8.35%, SRCL is doing good in the industry, outperforming 61.18% of the companies in the same industry.
SRCL's Operating Margin has declined in the last couple of years.
The Gross Margin of SRCL (38.58%) is better than 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

The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so SRCL is destroying value.
SRCL has more shares outstanding than it did 1 year ago.
SRCL has a better debt/assets ratio than last year.

2.2 Solvency

SRCL has an Altman-Z score of 2.17. This is not the best score and indicates that SRCL is in the grey zone with still only limited risk for bankruptcy at the moment.
With a Altman-Z score value of 2.17, SRCL perfoms like the industry average, outperforming 50.59% of the companies in the same industry.
SRCL has a Debt/Equity ratio of 0.55. This is a neutral value indicating SRCL is somewhat dependend on debt financing.
With a Debt to Equity ratio value of 0.55, SRCL perfoms like the industry average, outperforming 45.88% of the companies in the same industry.

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

ROIC/WACC0.45

WACC7.97%

2.3 Liquidity

A Current Ratio of 1.13 indicates that SRCL should not have too much problems paying its short term obligations.
SRCL's Current ratio of 1.13 is on the low side compared to the rest of the industry. SRCL is outperformed by 74.12% of its industry peers.
A Quick Ratio of 1.13 indicates that SRCL should not have too much problems paying its short term obligations.
Looking at the Quick ratio, with a value of 1.13, SRCL is doing worse than 63.53% of the companies in the same industry.

		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

The Earnings Per Share has grown by an nice 9.74% over the past year.
The earnings per share for SRCL have been decreasing by -15.70% on average. This is quite bad
The Revenue has decreased by -1.68% in the past year.
SRCL shows a decrease in Revenue. Measured over the last years, the Revenue has been decreasing by -5.27% yearly.

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

SRCL is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 21.37% yearly.
SRCL is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 3.90% yearly.

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

Based on the Price/Earnings ratio of 28.96, the valuation of SRCL can be described as expensive.
SRCL's Price/Earnings is on the same level as the industry average.
SRCL is valuated at similar levels of the S&P average when we compare the Price/Earnings ratio to 28.39, which is the current average of the S&P500 Index.
With a Price/Forward Earnings ratio of 21.78, SRCL is valued on the expensive side.
67.06% of the companies in the same industry are more expensive than SRCL, based on the Price/Forward Earnings ratio.
Compared to an average S&P500 Price/Forward Earnings ratio of 25.72, SRCL is valued at the same level.

		Industry Rank	Sector Rank
PE	28.96
Fwd PE	21.78

4.2 Price Multiples

The rest of the industry has a similar Enterprise Value to EBITDA ratio as SRCL.

		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.
A more expensive valuation may be justified as SRCL's earnings are expected to grow with 25.13% in the coming years.