Service Corporation International (SCI) has come into focus after reporting second quarter 2026 results that modestly exceeded market expectations, with management reaffirming full year earnings guidance and raising its adjusted operating cash flow midpoint.

The latest earnings report has coincided with a clear pick up in interest in Service Corporation International, with an 11.65% year to date share price return and a 46.24% five year total shareholder return suggesting momentum has been building over both shorter and longer periods.

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Bulls argue that Service Corporation International’s steady earnings, cash generation and buybacks support a richer multiple, while bears point to slower funeral volumes and a mature business mix. Which side does the current valuation really support?

Most Popular Narrative: 12.6% Undervalued

The most followed narrative for Service Corporation International pegs fair value at $98.67 per share, compared with the latest close at $86.19, and builds a detailed case around medium term earnings and cash flow.

The strong and rising installment receipts and stable consumer payment behavior for prearranged cemetery services, in a context of increasing societal engagement with advance planning, supports continued robust cash flows and improves operating cash flow conversion and predictability. Continued investments in greenfield expansions, digital transformation, and strategic acquisitions (with a robust acquisition pipeline exceeding guidance targets) are expected to support long-term revenue growth, operating leverage, and higher earnings through market consolidation and digital up-selling of services.

Behind that fair value is a tight set of assumptions about steady top line growth, fatter margins, and fewer shares over time. The narrative leans on consistent preneed volumes, disciplined buybacks, and a higher future earnings multiple to bridge the gap between today’s price and its own target. If you want to see exactly how those moving parts are expected to work together, the full narrative lays out the numbers and timing in detail.

Result: Fair Value of $98.67 (UNDERVALUED)

However, the case for Service Corporation International can weaken quickly if cremation continues to pressure higher value services or if acquisition-led growth fails to deliver solid returns.

Another View on Service Corporation International’s Valuation

Analysts see Service Corporation International as 12.6% undervalued using earnings and multiples. However, the current P/E of 21.9x is above the US Consumer Services industry at 16.7x, above the peer average at 17.1x, and slightly above a fair ratio of 21.5x. This suggests there may be limited margin for error if sentiment shifts.

Next Steps

If the mixed sentiment around Service Corporation International has you weighing both the risk flags and the upside potential, act promptly and review the full picture for yourself with 3 key rewards and 2 important warning signs

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.