Seeking Alpha author anticipating Carriage Services 3Q Report this week

October 28, 2024/Finance/

It’s an interesting week in the Death Care profession. Not only do we have Halloween coming up on Thursday, but the day before that, Wednesday, October 30, both of the two largest public funeral home and cemetery operating companies in America are expected to report their 3rd Quarter 2024 earnings.

Depending on how you look at it — especially if you are an investor — October 30 might be a “spookier” day than Halloween the following day. Or, on the other hand, it may bring encouraging news.

One recent writer for Seeking Alpha is cautiously optimistic about the 3Q report of Carriage Services. This report, published on October 22, makes these observations and then concludes that “we may upgrade the stock shortly after the announcement of the company’s upcoming Q3 earnings numbers.” Here are the observations mentioned:

“Carriage Services’ stock has surged 25% in 6.5 months, outperforming the S&P 500, driven by Q1 and Q2 earnings beats and bullish technical indicators.”
“Q2 revenues exceeded $100 million, with a 30%+ rise in preneed cemetery sales, leading to increased top-line guidance and bullish consensus trends.”
“Free cash flow has grown 81% over five years, and with projected increases, investors are becoming more bullish on Carriage’s growth prospects.”
“Successful credit agreement reduces interest expenses and supports deleveraging, enhancing return on capital and free cash flow, with potential for a post-Q3 earnings rally.”

Funeral Director Daily take: I’ll let you read the article and decide on your own what you think about Carriage Services prospects.

In the meantime, I don’t think it is any secret that traditional funeral home operations have been challenging for the past 18 months whether you operate a 75-call firm or a 1,000 call firm. Inflationary rising costs of doing business including financing and staffing have, at many firms, chipped away at the operating profits.

It takes an enormous amount of effort to control the cash outflows and bring increased profitability to the business amidst these headwinds. However, once you find the correct plan and make the adjustments necessary to fine-tune the operations, you can be in a terrific spot for greater profitably while moving forward again.

I think the writer thinks that Carriage Services may be in that spot.

Disclaimer — The author of this article for Funeral Director Daily has a stock position in Carriage Services.

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