Stock Story -
Funeral services company Carriage Services (NYSE:CSV) reported Q2 CY2024 results topping analysts' expectations, with revenue up 4.8% year on year to $102.3 million. The company's full-year revenue guidance of $395 million at the midpoint also came in 2.3% above analysts' estimates. It made a GAAP profit of $0.40 per share, down from its profit of $0.53 per share in the same quarter last year.
Is now the time to buy Carriage Services? Find out by reading the original article on StockStory, it's free.
Carriage Services (CSV) Q2 CY2024 Highlights:
- Revenue: $102.3 million vs analyst estimates of $94.98 million (7.7% beat)
- EPS: $0.40 vs analyst expectations of $0.54 (25.9% miss)
- Gross Margin (GAAP): 36.2%, up from 35.6% in the same quarter last year
- Free Cash Flow of $1.7 million, down 91.9% from the previous quarter
- Market Capitalization: $485 million
Established in 1991, Carriage Services (NYSE:CSV) is a provider of funeral and cemetery services in the United States.
Specialized Consumer ServicesSome consumer discretionary companies don’t fall neatly into a category because their products or services are unique. Although their offerings may be niche, these companies have often found more efficient or technology-enabled ways of doing or selling something that has existed for a while. Technology can be a double-edged sword, though, as it may lower the barriers to entry for new competitors and allow them to do serve customers better.
Sales GrowthExamining a company's long-term performance can provide clues about its business quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul. Over the last five years, Carriage Services grew its sales at a weak 8.1% compounded annual growth rate. This shows it failed to expand in any major way and is a rough starting point for our analysis.
We at StockStory place the most emphasis on long-term growth, but within consumer discretionary, a stretched historical view may miss a company riding a successful new product or emerging trend. Carriage Services's recent history shows its demand slowed as its annualized revenue growth of 2% over the last two years is below its five-year trend.
This quarter, Carriage Services reported reasonable year-on-year revenue growth of 4.8%, and its $102.3 million of revenue topped Wall Street's estimates by 7.7%. Looking ahead, Wall Street expects revenue to remain flat over the next 12 months, a deceleration from this quarter.
Cash Is KingIf you've followed StockStory for a while, you know we emphasize free cash flow. Why, you ask? We believe that in the end, cash is king, and you can't use accounting profits to pay the bills.
Carriage Services has shown impressive cash profitability, giving it the option to reinvest or return capital to investors. The company's free cash flow margin averaged 14.1% over the last two years, better than the broader consumer discretionary sector.
Carriage Services's free cash flow clocked in at $1.7 million in Q2, equivalent to a 1.7% margin. The company's cash profitability regressed as it was 7.9 percentage points lower than in the same quarter last year, prompting us to pay closer attention. Short-term fluctuations typically aren't a big deal because investment needs can be seasonal, but we'll be watching to see if the trend extrapolates into future quarters.
Key Takeaways from Carriage Services's Q2 Results We were impressed by how significantly Carriage Services blew past analysts' revenue expectations this quarter. We were also glad its full-year revenue guidance came in higher than Wall Street's estimates. On the other hand, its EPS missed. Overall, we think this was a strong quarter that should satisfy shareholders. The stock traded up 2.9% to $33.05 immediately after reporting.
