Service Corporation International (SCI) Down 11.5% — Should I Book It and Bail?
Service Corporation International (SCI) is under heavy pressure on Thursday, last trading at $72.88 on the NYSE. That is a $9.45 drop from the prior close of $82.33 and an 11.48% loss in a single session for a stock that usually moves quietly. The selloff pushes SCI roughly 19.9% below its 52-week high of $90.99, which it reached on July 30, 2026. That peak came just as management was issuing the full-year guidance it has now walked back. Three months later, nearly all of the optimism built into that high has been erased.
Volume reached about 1.29 million shares against a 90-day average of roughly 1.05 million, about 23% above normal turnover with the session still open. Selling has been steady and heavy since the gap lower at the open.
Why Service Corporation International Price is Moving Lower
The driver is company-specific. SCI cut its earnings outlook in its Q3 report on October 28. Management now expects full-year adjusted EPS of $3.94 to $4.04, down from the $4.10 to $4.30 range issued in July. That moves the midpoint from $4.20 to $3.99, a reduction of about 5%. The company blamed funeral volumes that came in below its earlier expectations, along with persistently higher healthcare, selling-compensation, advertising, and marketing costs. Q4 adjusted EPS guidance of $1.10 to $1.20 confirms that the pressure is expected to last through year-end. For a business valued on its record of predictable earnings, a mid-year guidance cut of this size changes how investors see it, and the stock opened at $72.76 on Thursday, an 11.6% gap below the prior close.
The quarter itself was mixed. Adjusted EPS of $0.97 missed the $0.99 consensus estimate by $0.02, although it still rose 11% from $0.87 a year earlier. Revenue of $1.107 billion edged past the $1.10 billion estimate and grew 4.6% year over year. That top-line result suggests demand has not broken down. The problem is that rising costs are absorbing more of each revenue dollar than the market had assumed.
Management argued that its investment in preneed sales supports future growth, while acknowledging that those costs weigh on near-term results. It kept its adjusted operating cash flow midpoint at $1.085 billion, which offers some reassurance that cash generation remains intact. Investors are clearly giving more weight to the earnings downgrade than to the cash flow. The contrast with the rest of the peer group is stark. Expedia Group, Inc. (EXPE) is up 3.25% and Booking Holdings Inc. (BKNG) has gained 2.30% today, so this decline belongs to SCI alone.
What is the Service Corporation International Rating - Should I Sell?
Weiss Ratings assigns SCI a B rating. Current recommendation is Buy. That rating reflects a business whose underlying economics remain solid even after a disappointing quarter. Today's guidance cut does not undo the fundamental strengths behind the rating, but it does test how much confidence the market is willing to extend.
The Excellent rating on the Efficiency Index is the clearest of those strengths. A 34.71% ROE stands out for a company that owns and maintains a large physical network of funeral homes and cemeteries. It shows how effectively SCI turns its asset base and preneed sales backlog into earnings. The Good rating on the Growth Index fits a company expanding revenue at 3.55% with low volatility in the top line. The latest quarter's 4.6% revenue gain shows that growth is still there, even if it is not dramatic. The Good Solvency Index rating suggests the balance sheet can absorb a period of elevated costs, and the steady $1.085 billion operating cash flow outlook supports that view. The Good Total Return Index rating reflects the strong run that carried the stock to $90.99 in late July, though part of that record has now been surrendered.
Where the picture becomes more nuanced is in the Fair ratings. The Fair Volatility Index rating looks justified on a day when the guidance cut erased more than a tenth of the stock's value in a single session. Shareholders in a deathcare company do not typically expect moves like that. The Fair Dividend Index rating reflects a 1.70% yield that is reliable but modest. Even after today's decline, the stock trades at a forward P/E of 21.54, which leaves little room for further earnings disappointments. A 12.30% profit margin is respectable, but it is also the figure most exposed to the healthcare, compensation, and marketing cost pressures management flagged.
Within the Consumer Discretionary sector, Service Corporation is on par with Marriott International, Inc. (MAR, B), Airbnb, Inc. (ABNB, B), and Expedia Group, Inc. (EXPE, B). It ranks slightly ahead of Booking Holdings Inc. (BKNG, B-) and Yum! Brands, Inc. (YUM, B-). That positioning holds for now, but the rating will depend on whether the cost pressures prove temporary.
About Service Corporation International
Service Corporation International (SCI) is a Consumer Discretionary company operating within the Consumer Services industry. Headquartered in Houston, Texas, it is the largest provider of deathcare products and services in North America. SCI runs a network of roughly 1,500 funeral homes and nearly 500 cemeteries across the United States, Canada, and Puerto Rico. It operates through two segments, funeral and cemetery. Services include traditional funerals, cremation, memorial services, burial property, monuments, and related merchandise. Its flagship consumer brand is Dignity Memorial, and it also operates through names such as National Cremation Society and Advantage Funeral and Cremation Services.
Preneed sales are a defining feature of the business. Families arrange and pay for funeral services and cemetery property years or even decades before they are needed. These contracts build a large backlog of future revenue and trust assets, which gives SCI visibility into earnings that few consumer businesses can match. The tradeoff, as the latest quarter showed, is that growing the preneed sales force requires upfront spending on compensation and marketing before those contracts become revenue.
SCI's competitive advantages come from scale and local density. Clustering funeral homes and cemeteries within a market lets the company share staff, vehicles, and facilities, which supports margins that independent operators struggle to match. Cemetery land is finite and highly local, which makes established properties difficult to replicate. The industry also benefits from long-term demographic tailwinds as the population ages. At the same time, SCI must manage the continuing shift toward cremation, which typically carries lower revenue per service than traditional burial, and year-to-year swings in death rates that drive funeral volumes.
Investor Outlook
Service Corporation International (SCI) holds a Weiss Rating of B (Buy), but the reduced guidance calls for patience rather than a rush to buy the dip. Investors should watch whether funeral volumes stabilize and whether the company delivers Q4 adjusted EPS within its $1.10 to $1.20 range. They should also look for signs that preneed sales investments begin translating into revenue as SCI moves into 2027. See full rankings of all B-rated Consumer Discretionary stocks inside the Weiss Stock Screener.
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