QS Research · Michael Burry's Scion Capital analyst template · 2006
CINTAS CORP (CTAS)
As of 2026-11-11 · 12/15 boxes filled from SEC filings and market data
Report price $225.28 (close 2026-11-10)
Conclusion: PASS
Conviction medium · base case -27% · downside -42% · upside 0%
Cintas is a high-quality route-density compounder, with ROIC of 27.9% against a 6.3% WACC, TTM revenue of $11.56B and EBIT of $2.70B, but at $225.28 the shares already pay 43.5x TTM P/E and 28.5x EV/EBITDA. On the code's independent peer-median P/E of 31.9x, TTM net income to common of $2.05B is worth $165.21 a share, -27%; at today's 43.5x the same TTM earnings are worth today's price, so there is no multiple-expansion upside without a dated catalyst. The downside case assumes a 20% earnings miss and a P/E compressed to about 37x, giving -32%, while the UniFirst FTC review and integration are the main swing factors. With base -27%, upside 0% and downside -32%, no long or short rule is met; pass.
Key numbers
- Share price: $225.28
- Market cap: $89.45B
- Latest financial period: TTM to Aug 31, 2026
- Revenue (TTM): $11.56B
- EV / EBITDA (TTM): 28.5x
- P/E (TTM): 43.5x
- FCF yield: 2.3%
- Price / book: 17.19x
- EV / FCF (TTM): 45.1x
- Revenue growth (latest fiscal year): +8.9%
- ROIC (TTM): 27.9%
- WACC: 6.3%
- Economic profit spread: +21.6 pts
The 15 boxes
- ✓ 1. Long-form business notes
Cintas is a route-based uniform rental and facility services company with a second reportable First Aid and Safety Services segment; FY2026 revenue was $11.264761B, with $8.621624B from Uniform Rental and Facility Services. The business has scaled since FY2021 ($7.116340B revenue): routes rose to about 12,500 from about 11,000, and First Aid now includes workplace water services. In March 2026 Cintas agreed to acquire UniFirst in a transaction valued at approximately $5.5B; it had not closed as of the FY2026 10-K and was expected to close in the second half of calendar 2026. TTM to Aug 2026 revenue was $11.56B and operating income $2.70B.
- ✓ 2. Competitive advantage
Cintas shows the financial signature of a durable scale-based advantage rather than a brand or licence moat: the markets it serves are local and highly fragmented, and it competes with national, regional and local providers plus retailers and online players, yet gross profit rose from $3.31B in FY2021 to $5.71B in FY2026 and operating income from $1.39B to $2.61B, with gross margin up from about 46.5% to 50.7% over the same years (computed from XBRL facts). The moat evidence is physical density — roughly 12,500 local delivery routes, 484 operational facilities and 12 distribution centers at May 31, 2026 — and cash conversion: TTM operating cash flow of $2.43B against capex of $400.7M. Pricing power is not absolute: the 10-K itself flags that price-cutting by competitors could force Cintas to lower prices. The pending UniFirst transaction is the main swing factor in scale, with no synergy figures disclosed.
- ✓ 3. 10-Q takeaways
Q1 FY2027 (quarter ended Aug 31, 2026) revenue rose 10.9% to $3.01 billion, with organic growth of 8.9%; gross margin was 51.5% (+120 bps) and operating margin 23.6%, with GAAP operating income including $14.4 million of UniFirst transaction expenses. GAAP diluted EPS was $1.36 and adjusted diluted EPS was $1.39; FY2027 guidance was raised to revenue of $12.15-$12.27 billion and adjusted diluted EPS of $5.45-$5.54. Buybacks were $544.7 million in Q1 FY2027 through Sep 22, 2026, and the quarterly dividend paid was $208.8 million. The provided 10-Q excerpt is only the MD&A heading; the risk-factor diff shows 30 paragraphs with no counterpart in the prior 10-K, including tariff/supply-chain, UniFirst integration and AI risks.
- ✓ 4. Corporate governance
Filled; members read this box.
- ✓ 5. Overview of the prior 3 years of 8-K filings
Filled; members read this box.
- ✓ 6. Other significant filings
Filled; members read this box.
- ✓ 7. Chronology of significant news and events
Filled; members read this box.
- ✓ 8. Comparables valuation interpretation
Filled; members read this box.
- ✓ 9. Insider trading interpretation
Filled; members read this box.
- ○ 10. Earnings-call notes
- ○ 11. Impression of the shareholder letter
- ○ 12. Scuttlebutt overview
- ✓ 13. Valuation and risk/reward summary
Filled; members read this box.
- ✓ 14. Current price suppression and potential catalysts
Filled; members read this box.
- ✓ 15. Conclusions
The call above.
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