We assign a fundamental rating of 3 out of 10 to SRCL. 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. SRCL is quite expensive at the moment. 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.
SRCL had negative earnings in 4 of the past 5 years.
Each year in the past 5 years SRCL had a positive operating cash flow.

1.2 Ratios

SRCL has a Return On Assets (0.66%) which is comparable to the rest of the industry.
The Return On Equity of SRCL (1.42%) is comparable to the rest of the industry.
SRCL has a Return On Invested Capital of 3.62%. This is comparable 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 has a Profit Margin (1.37%) which is comparable to the rest of the industry.
Looking at the Operating Margin, with a value of 8.35%, SRCL is in the better half of the industry, outperforming 61.18% of the companies in the same industry.
In the last couple of years the Operating Margin of SRCL has declined.
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

SRCL has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
Compared to 1 year ago, SRCL has more shares outstanding
Compared to 1 year ago, SRCL has an improved debt to assets ratio.

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 of 2.17. This is comparable to the rest of the industry: SRCL outperforms 50.59% of its industry peers.
SRCL has a Debt/Equity ratio of 0.55. This is a neutral value indicating SRCL is somewhat dependend on debt financing.
SRCL's Debt to Equity ratio of 0.55 is in line compared 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

A Current Ratio of 1.13 indicates that SRCL should not have too much problems paying its short term obligations.
Looking at the Current ratio, with a value of 1.13, SRCL is doing worse than 74.12% of the companies in the same industry.
A Quick Ratio of 1.13 indicates that SRCL should not have too much problems paying its short term obligations.
SRCL has a Quick ratio of 1.13. This is in the lower half of the industry: SRCL underperforms 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.
The Revenue has decreased by -1.68% in the past year.
The Revenue has been decreasing by -5.27% on average over the past years.

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.
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

The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
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

SRCL is valuated quite expensively with a Price/Earnings ratio of 28.96.
SRCL's Price/Earnings is on the same level as the industry average.
The average S&P500 Price/Earnings ratio is at 28.39. SRCL is around the same levels.
Based on the Price/Forward Earnings ratio of 21.78, the valuation of SRCL can be described as rather expensive.
67.06% of the companies in the same industry are more expensive than SRCL, based on the Price/Forward Earnings ratio.
SRCL is valuated at similar levels of the S&P average when we compare the Price/Forward Earnings ratio to 25.72, 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

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

The 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.