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Cintas Corporation (XNAS:CTAS) In-Depth Stock/Fundamental/Options Analysis Today

Primary Facts

CTAS

Name:

CINTAS CORPORATION (XNAS:CTAS)

Sector:

213.39M

Industry:

Specialty Business Services

CEO:

Mr. Scott Farmer

Total Employees:

43,000

Our Technological Advancement Rating

Our Rating:

D

Technological advancement compared to industry is -159.74% lower

ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF CINTAS CORPORATION(CTAS) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND SPECIALTY BUSINESS SERVICES INDUSTRY. DATE: 07/09/2022

Primary Targets/Price Insights

Previous Close ($) :

405.79

One Month Price Target:

$409.04

Six Month Price Target :

$425.27

Likely Price in One Year's Time:

Ticker:

$444.75

Likely Trading Range Today Under (Normal Volatility)
 

$404.56

Price Upper limit ($) :

$407.78

Price Lower limit ($) :

Crash Risk Prep/Key Price Levels (High Volatility/Risk)

Price, as per data analysis, isn't likely to fall below:

Today:

$386.73

                                                               This week:

$363.17

                                                        This month :

$320.55

Other Primary facts

Market Cap:

41.86B

Market Cap Classification:

Large Cap

Number of Shares

IPO Date:

101.19M

Best/Worst Daily Performance (Last 3+ Years)
 

Highest Daily Appreciation:

14.66%

-16.86%

Worst Daily Decline:

Our Options Trading Entry Points

Iron Condor entry points for options expiring in 1 week's time

Low risk (<2%) entry points

Buy Call:

Sell Call:

Buy Put:

Sell Put:

$494.16

$453.13

$317.42

$358.45

Medium risk (<10%) entry points

Buy Call

Sell Call

$439.78

Buy Put:

Sell Put:

$431.02

$371.69

$380.56

These entry points can be used for other strategies, such as butterflies, straddles, etc.

Risk-Adjusted returns (Sharpe Ratio) of

CTAS

Sharpe Ratio:

3.62%

Comparison:

CTAS, is amongst the top 20% stocks with highest risk-adjusted returns

Sharpe ratio is 515.05% higher than the industry

& ratio is 58.93% higher than the market/S&P 500 average

Average Returns/Yield of

CTAS

Daily returns:

0.09%

Weekly returns:

0.47%

Monthly returns:

1.87%

Yearly returns:

5.18%

Comparison of returns:

Average annual returns/yield (last 3 years) is 332.26% above industry average

Classification:

CTAS, is amongst the top 40% highest yielding stocks in terms of daily returns

Results of T-Test of Returns:

0.39

Statistical test of Returns:

CTAS has yielded returns statistically similar to the market

SHARPE ratio explained.png

Volatility (measured by Standard Deviation)

Daily Volatility:

2.33%

Weekly Volatility:

5.22%

Monthly Volatility:

10.43%

Yearly Volatility:

36.13%

Volitlilty of last five days (Measured by Standard Deviation) 

Average Volatility of this Week:

0.70%

Volatility in last five trading days has been -69.99% below long-term volatility

Value at Risk Analysis (VaR)

Daily VaR:

-4.70%

Weekly VaR:

-10.50%

Monthly VaR:

-21.00%

How Much Can the price of

CTAS

Decline in a Recession?

Likely price decline in a recession: 

Base case (decline):

-18%

Worst case (decline):

-72.76%

This translates to price declining to:

$334.77

This translates to price declining to:

$110.53

Severe Crash Probability

Risk of crash in next 6/12 months: High (50-70%)

What is Value at Risk (VaR)?

VaR explained figure

Risk Fundamentals

CTAS is a 48.25% riskier investment compared to the market/S&P 500 & is 27.01% riskier than Nasdaq (IXIC)

Risk (measured by volatility) is -11.33% below industry average

Overall, it is amongst the top 50% most risky stocks

Beta Examination of

CTAS

Beta in relation to market/S&P 500--1.43

Expected beta in 1 year's time:

0.885

Expected beta in 3 year's time:

1.252

Unlevered (debt free) Beta:

1.043

Beta in relation to Nasdaq (XNAS):

0.875

Beta in relation to all global stocks::

0.82

Beta Comparison & Analysis

Beta of competitors/peers::

1.086

Beta is 31.62% higher than peers

Average Industry Beta: 

1.172

Beta is 21.90% above industry average

Sustainable Growth Rate Analysis

Sustainable growth rate for this stock/firm:

21.67%

Sustainable growth rate is -38.50% below industry average

Alpha provided | Alpha Analysis 

Alpha provided:

0.095

Alpha is -257.82% below industry average alpha yield

Alpha is 602% higher than market/& is unsustainably high

Analysis of Cost of Capital of

CTAS

Equity cost of capital:

0.129

Equity cost of capital is 15.73% above industry mean WACC

Unlevered (without debt) cost of capital:  

9.45%

Before-tax cost of debt:

3.24%

After-tax cost of debt:

2.56%

Overall debt rating:

High AA grade (second highest grade)

Weighted average cost of capital (WACC):

2.56%

WACC is 17.99% above industry mean WACC

Key Per-Share Metrics & Analysis

Revenue per share:

$75.26

Revenue growth rate per share of (3Y):

12.41

Annual revenue growth rate is 176.56% above the industry average

EPS:

$11.33

Expected Annual growth rate of  EPS (3Y):

0.00%

-

Free cash flow (FCF) per share:

$11.84

Balance sheet equity growth per share: 161.25%

Equity growth rate per share is -49.14% lower than the industry

Debt per share

$14.48

EBITDA per share

$19.12

Valuation Analysis Today of

CTAS

P/E Ratio:

34.84

P/E Ratio of Competitors/Peers:

28.41

P/E ratio is 22.63% higher than main peers & is 24.80% higher than the industry

Stock price/value with industry average P/E ratio: $316.30

CTAS is 28.29% overvalued if valued using industry average P/E ratio

Share value as per dividend discount (DDM) model: $26.68

Present value of the expected future dividends only: $19.44

P/S (Price to Sales ratio):

5.39

Price to sales ratio is 54.07% above the industry mean

P/B (Price to book value ratio):

12.41

Price to free cash flow: 34.29

-

Net income growth rate (3Y):

34.01%

Net income growth rate is -99.99% lower than the industry average net income growth rate

Dividend Analysis

Dividend payout rate: 6.55%

Dividend yeild: 0.94%

Previous Dividend: $0.95

Previous adjusted dividend: $0.95

Previous Dividend: $3.80

Expected next dividend best case: $1.59

Expected next dividend worst case: $0.31

Average dividend payment (long-term): $1.07

Average dividend increase/decrease (growth rate) % per period: -5.53%

Expected next dividend payment date: 13/09/2022

Expected next dividend record date: 15/08/2022

Expected next dividend declaration date: 07/12/2022

Previous dividend payment date: 15/06/2022

Previous dividend record date: 16/05/2022

Previous dividend declaration date: 13/04/2022

Dividend History:

2022-05-13--$0.95

2021-11-12--$0.95

2021-05-13--$0.75

2022-02-14--$0.95

2021-08-12--$0.95

2021-02-11--$0.75

Dividend growth rate is -145.74% lower than the industry average

In-depth Debt & Leverage Analysis

Debt to equity ratio:

44.29%

Net debt to equity ratio:

81.72%

Debt to assets ratio:

18.65%

Net debt to assets ratio:

34.41%

Debt-to-asset ratio is -69.99% below industry average

Ability to repay debt:

Interest coverage ratio:

21.42

Interest coverage ratio is 478.39% more than industry average

Looking forward:

Debt growth rate:

0.41%

Annual debt growth is -82% lower than industry average debt growth rate

Debt repayment rate in last quarter: 14.57%

Analysis of Key Statistics  

Correlation of price movement with the market:

0.786

Statistical significance of correlation:

CTAS has a statistically significant correlation with the market

Average Correlation of  the industry with the market:

0.646

Stock price is 21.77% more correlated with the market, compared to the industry average correlation

R Squared (percentage of price movement explained by movement of the market): 

0.646

Correlation of price movement with Nasdaq (^IXIC):

0.019

Covariance  of price movement with the market:

0.025

Kurtosis 

10.881

Returns have a significant fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are more probable, compared to assets with normally distributed returns

Skewness of returns:

-0.452

Returns are, approximately, symmetrical

Fundamental Analysis & Dupont Analysis of

CTAS

Gross Profit Margin Ratio:

186%

Operating Profit Margin Ratio:

20.21%

Operating profit margin is 80.52% higher than the industry

Net Profit Margin Ratio:

186%

Effective Tax Rate:

16.58%

Effective tax rate is -5.07% lower than the industry

Dupont Method

Net Profit Margin

Return on Equity Ratio (ROE):

×

ROA

=

×

36.54%

Return on equity (ROE) is 10.05% higher than the industry

Financial Leverage

Asset Turnover Ratio (ROA):

15.39%

Return on assets (ROA) is 158.98% higher than the industry

Financial Leverage:

1.2x

Current Ratio:

1.09

Current ratio is -45.42% below industry average

Cash Conversion Cycle (days):

60.6

Cash conversion cycle is 132.31% above industry average

The remaining useful life of property plant & equipment is: 0.2 years

Stock based compensation to net income ratio:

3.02%

In-depth Efficiency  Analysis

Revenue generated per employee:

177.1K

Each employee generates -36% less revenue than industry average revenue per employee

EBITDA generated per employee: 

45.0K

Each employee generates -49% less EBITDA than industry average revenue per employee

Profit generated per employee: 

28.1K

Each employee generates -44% less net income/profit than industry average revenue per employee

Free cash flow (FCF) generated per employee: 

5.0K

Each employee generates -65% less free cash flow than industry average revenue per employee

Assets/Capital per employee

125.1K

Each employee generates -65% less free cash flow than industry average revenue per employee

Research & Development (R&D) Analysis

-

-

Competitors/Peer firms of 

CTAS

OLD DOMINION FREIGHT LINE, INC. (XNAS:ODFL)

PAYCHEX, INC. (XNAS:PAYX)

Fastenal Company (XNAS:FAST)

PACCAR INC (XNAS:PCAR)

COPART, INC. (XNAS:CPRT)

RYANAIR HOLDINGS PUBLIC LIMITED COMPANY (XNAS:RYAAY)

EXPEDITORS INTERNATIONAL OF WASHINGTON, INC (XNAS:EXPD)

J. B. HUNT TRANSPORT SERVICES, INC. (XNAS:JBHT)

BNGOW

Current Analyst Ratings

Strong buy�8%

Buy�13%

Hold�33%

Sell�4%

Strong sell�0%

Overall analyst sentiment is: Hold

Income Statement

Period:

TTM

Date:

2/28/22

Revenue:

7.62B

Cost of Revenue:

Gross Profit:

R&D Expense

General & Admin Expenses:

Selling, General & Admin Expenses

Sales and Marketing Expenses

Other Expenses :

Operating Expenses :

Cost & Expenses :

Interest Income:

Interest Expenses:

Depreciation & Amortization:

EBITDA:

Operating Income:

Other Income Expenses:

Income Before Tax:

Income Tax Expense:

Net Income:

Balance Sheet

Date:

Calendar Year:

Period:

Cash & Cash Equivalents:

Short Term Investments:

Cash & Short Term Investments:

Net Receivables:

Inventory:

Other Current Assets:

Total Current Assets:

PP&E:

Goodwill: 

Intangible Assets: 

Long Term Investments: 

Tax Assets: 

Other Non-Current Assets: 

Total Non-Current Assets: 

Other Assets: 

Total Assets: 

Accounts Payable: 

Short Term Debt:

Tax Payables:

Deferred Revenue:

Other Current Liabilities:

Total Current Liabilities:

Long Term Debt:

Other Non-Current Liabilities:

Total Non Current Liabilities:

Other Liabilities:

Total Liabilities:

Common Stock:

Retained Earnings:

Accumulated Other Comprehensive Loss:

Other Total Stockholders' Equity:

Total Stockholders' Equity:

Total Liabilities and Stockholders' Equity:

Total Investments:

Total Debt:

Net Debt:

4.07B

3.55B

-

-

2.01B

-

-

2.01B

266.00K

90.34M

395.45M

1.94B

1.54B

1.21B

1.45B

240.29M

1.21B

Statement of Cash Flow

Date:

Period:

97.95M

Differed Income Tax :

22.89M

Stock Based Compensation :

36.50M

Change in Working Capital :

- 214192.00K

Accounts Receivables:

- 27742.00K

Other Working Capital:

- 74824.00K

Other Non-Cash Items:

- 12178.00K

Net Cash Provided by Operating Activities:

262.14M

Investments in PP&E:

-

Net Acquisitions:

- 35725.00K

Purchases of Investments:

- 8738.00K

Sales/Maturities of Investments:

Other Investing Activities:

​Net Cash Used for Investing Activities:

Debt Repayment:

Common Stock Issued:

Common Stock Repurchased:

Dividend Paid:

Other Financing Activities:

Net Cash Used Provided by Financing Activities:

Effect of FOREX on Changes in Cash:

Net Changes in Cash:

Cash at End of Period:

Cash at Beginning of Period:

Operating Cash Flow:

Capital Expenditure:

Free Cash Flow (FCF):

8/31/21

2022

Q1

79.75M

-

79.75M

938.61M

1.31B

148.96M

2.48B

1.46B

2.92B

403.98M

295.27M

-

295.32M

5.38B

-

7.86B

202.97M

1.32B

-

-

747.60M

2.27B

1.47B

418.40M

2.28B

-

4.55B

1.63B

8.11B

- 30266.0K

- 6395493.00K

August 31, 2021 at 6:00:00 AM

6.08B

3.31B

7.86B

-

2.78B

2.7B

-

- 39858.00K

- 84321.00K

- 250000.00K

-

- 659235.00K

- 79135.00K

398.29M

- 590084.00K

- 1627.00K

- 413891.00K

79.75M

493.64M

262.14M

- 48748.00K

213.39M

Our Proprietary Portfolio Rating

Our Rating:

D

Portfolio rating_explained.png
Tech rating_explained.png
Alpha explained.png

Price Forecast/Expected Price in Next 5 Years of

CTAS

2023

2024

2025

2026

2027

$457.14

$501.03

$549.14

$601.87

$659.66

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