Skip to Content
Morningstar
Get 14 Days Free

Cintas Corp CTAS

Morningstar Rating
Rating as of

Morningstar’s Analysis

Valuation
Currency in USD
Is it the right time to buy or sell?
Find out with Morningstar Premium
Is it the right time to buy or sell?
Find out with Morningstar Premium

1-Star Price

PREMIUM

5-Star Price

PREMIUM

Economic Moat

PREMIUM

Capital Allocation

PREMIUM

Cintas Reports Margin Improvement Amid Underwhelming Revenue, Shares Are Still Overvalued

Joshua Aguilar Equity Analyst

Analyst Note

| Joshua Aguilar |

Wide-moat Cintas reported fourth-quarter results that were slightly ahead of our expectations. We plan to increase our fair value about 3% to 5% and will re-evaluate when the firm releases its 10-K and we roll our model for fiscal year 2021. This increase in our fair value is driven by our improved revenue and margin outlook, as well as time value of money. Fourth-quarter revenue increased 13% year over year, while fiscal year revenue increased 0.4%. For the uniform rentals and facilities services segment, fourth-quarter revenue increased roughly 15% year over year, but was up only 0.8% for the fiscal year. Government shutdowns led many companies to shift to work-from-home models in the fourth quarter of fiscal year 2020, causing a slowdown in sales. The segment was up roughly 3% sequentially and we expect mid-single-digit growth over the next year as offices reopen and demand increases.

Read Full Analysis

Company Profile

Business Description

In its core uniform and facility services unit (80% of sales), Cintas provides uniform rental programs to businesses across the size spectrum, mostly in North America. The firm is by far the largest provider in the industry. Facilities products generally include the rental and sale of entrance mat, mops, shop towels, and restroom supplies. Cintas also runs a first aid and safety services business (11% of sales), a fire protection services business (6% of sales), and a uniform direct sales business (3% of sales).

Contact
6800 Cintas Boulevard, P.O. Box 625737
Cincinnati, OH, 45262-5737
T +1 513 459-1200
Sector Industrials
Industry Specialty Business Services
Most Recent Earnings May 31, 2021
Fiscal Year End May 31, 2021
Stock Type Cyclical
Employees 40,000

Related

Commentary
The Week Ahead: Heavy Hitters Cintas, FedEx, and Nike to Report
Packaged food companies to announce earnings, and data on personal income and spending for November will be released.
Charlotte Frank
Our Picks
10 Scary Stocks
These are the most overpriced stocks in our coverage universe today.
Susan Dziubinski
ETF Specialist
3 Unrated Large-Cap Dividend ETFs for Your Radar
The menu of dividend ETFs features something for every palate.
Ben Johnson
Our Picks
11 Stocks to Sell
These names are among the most expensive in our coverage universe.
Susan Dziubinski
Our Picks
7 Wide-Moat Stocks to Avoid--For Now
These large companies have sustainable competitive advantages, but their stocks are too pricey for our taste.
Susan Dziubinski
Stock Analyst Update
No Surprises From Cintas
The wide-moat company's impressive operational execution persists in terms of adding new programmers and boosting account penetration with ancillary services.
Matthew Young
Stock Analyst Update
Cintas: Integration Will Be Dominant Theme, Short-Term
The G&K Services acquisition offers upside potential to our fair value on this wide-moat uniform rental specialist.
Matthew Young
US Videos
An Upgrade for This Leader in Uniform Rental
Although the current stock price is steep, wide-moat Cintas benefits from scale-based cost advantages and strong network infrastructure.
Matthew Young
Credit Insights
The Rumors Were True: Eurogroup Agrees to Provide Loans to Recapitalize Spanish Banks
We continue to favor U.S. corporate bonds over European corporate bonds.
David Sekera
Stock Strategist Industry Reports
AMN Healthcare Still a Healthy Opportunity
Anemic conditions don't derail our upbeat thesis that this staffing firm remains a top pick in the employment services industry.
Vishnu Lekraj
Credit Insights
New Issue Corporate Bond Market Reaches a Frenzied Pace
The draw of low interest rates combined with tight credit spreads keeps issuers coming back to the market for more.
David Sekera
US Videos
How First Eagle Mixes Moats with Cigar Butts
First Eagle's Abhay Deshpande on the strategy behind portfolio holdings that fit the mold of Graham's cigar butts and others that are more Buffett-like.
John Coumarianos
Stock Strategist Industry Reports
Our Top Pick for a Recovering Job Market
We think one hidden gem could give investors a sweet payday.
Vishnu Lekraj
Fund Spy
Meet Our Newest Fund Analyst Pick
Find out why this fund's recent attention is well-deserved.
Andrew Gogerty
Investing Specialists
Peak Oil: Who Wins, Who Loses?
What increased oil scarcity means for E&P companies, alternative energy, transportation, utilities, labor, and even Coke and Pepsi.
Paul Larson
US Videos
Two New Wide Moat Firms, Two Downgrades
Morningstar's Pat Dorsey outlines recent changes to our wide moat stock list. See who made the cut and who dropped off.
Pat Dorsey
Fund Spy
Put These Top Managers to Work for You
How to employ our Fund Manager of the Decade nominees wisely.
John Coumarianos
US Videos
A Uniform Route to a Wide-Moat Business
Cintas CFO Bill Gale on how the company navigated the downturn, adjusted to a service-oriented client base, and consistently manages better margins than its rivals.
Vishnu Lekraj
US Videos
Bigger Fish on Sale in the Recession
Morningstar 2008 Manager of the Year Charlie Dreifus discusses going up the market-cap ladder for three picks during the severe market downturn.
John Coumarianos
Quarter-End Insights
Our Take on the Second Quarter
As the rally eases off the gas pedal, we take stock of winners, losers, valuations, and the opportunities remaining.
John Coumarianos

Transparency is how we protect the integrity of our work and keep empowering investors to achieve their goals and dreams. And we have unwavering standards for how we keep that integrity intact, from our research and data to our policies on content and your personal data.

We’d like to share more about how we work and what drives our day-to-day business.

We sell different types of products and services to both investment professionals and individual investors. These products and services are usually sold through license agreements or subscriptions. Our investment management business generates asset-based fees, which are calculated as a percentage of assets under management. We also sell both admissions and sponsorship packages for our investment conferences and advertising on our websites and newsletters.

How we use your information depends on the product and service that you use and your relationship with us. We may use it to:

  • Verify your identity, personalize the content you receive, or create and administer your account.
  • Provide specific products and services to you, such as portfolio management or data aggregation.
  • Develop and improve features of our offerings.
  • Gear advertisements and other marketing efforts towards your interests.

To learn more about how we handle and protect your data, visit our privacy center.

Maintaining independence and editorial freedom is essential to our mission of empowering investor success. We provide a platform for our authors to report on investments fairly, accurately, and from the investor’s point of view. We also respect individual opinions––they represent the unvarnished thinking of our people and exacting analysis of our research processes. Our authors can publish views that we may or may not agree with, but they show their work, distinguish facts from opinions, and make sure their analysis is clear and in no way misleading or deceptive.

To further protect the integrity of our editorial content, we keep a strict separation between our sales teams and authors to remove any pressure or influence on our analyses and research.

Read our editorial policy to learn more about our process.