Cintas (CTAS 3.69%) announced its fiscal 2025 fourth-quarter results on Thursday, July 17, with revenue up 8% year over year to $2.67 billion and diluted EPS up 9% to $1.09, with record full-year revenue of $10.34 billion and EPS growth of 16.1%. The company projects fiscal 2026 revenue of $11 billion–$11.15 billion (6.4%–7.8% growth) and EPS of $4.71–$4.85 (7%–10.2% growth), while highlighting robust recurring business performance, disciplined capital allocation, and technology-driven productivity initiati ...

Core Viewpoint - Cintas Corporation (CTAS) is set to release its fourth-quarter fiscal 2025 results on July 17, with expectations of strong revenue growth and margin improvement despite rising costs [1][6]. Group 1: Revenue Expectations - The Uniform Rental and Facility Services segment is projected to generate revenues of $2.02 billion, reflecting a 5.7% increase year-over-year [2]. - The First Aid and Safety Services segment is expected to achieve revenues of $313.1 million, indicating a 12.8% increase from the previous year [3]. - Overall, the Zacks Consensus Estimate for total revenues is $2.63 billion, which represents a 6.3% increase compared to the same quarter last year [6]. Group 2: Margin and Cost Analysis - Cintas is anticipated to show an improvement in operating margin by 50 basis points from the prior year, driven by operational execution and pricing strategies [5]. - Selling, general and administrative (SG&A) expenses are expected to rise to $714.4 million, marking a 7% increase from the year-ago level, which may impact overall profitability [7]. Group 3: Acquisitions Impact - The acquisitions of Paris Uniform Services and SITEX are expected to contribute positively to revenues and enhance market presence in key regions [4][9].

Industry Overview - The business services industry is experiencing sustained expansion, with economic activity in the services sector growing for the 10th consecutive month as of April, indicated by a robust Services PMI remaining above the 50% threshold for the 56th time in 59 months, reflecting a post-pandemic recovery [1] - The industry is mature, with revenues, income, and cash flows now exceeding pre-pandemic levels, and it ranks in the top 19% of the Zacks Sector Rank, suggesting an expected outperformance over the next three to six months [3] Technological Impact - The rapid advancement and adoption of artificial intelligence and automation technologies are transforming the delivery of business services, promising enhanced efficiency and cost reduction while also presenting challenges such as workforce displacement and the need for continuous upskilling [2] Stock Recommendations - Five business services stocks with favorable Zacks Rank for investment are recommended: Cintas Corp. (CTAS), Thomson Reuters Corp. (TRI), Healthcare Services Group Inc. (HCSG), ZipRecruiter Inc. (ZIP), and Bright Horizons Family Solutions Inc. (BFAM), all currently carrying a Zacks Rank 2 (Buy) [4] Company Highlights Cintas Corp. (CTAS) - Cintas is well-positioned to benefit from strong momentum across its segments, with improved demand in its Uniform Rental and Facility Services segment and First Aid and Safety Services segment [7] - Expected revenue and earnings growth rates for CTAS are 7% and 10.8%, respectively, for the next year, with a 1.7% improvement in the Zacks Consensus Estimate for next-year earnings over the past 60 days [8] Thomson Reuters Corp. (TRI) - TRI operates as a content and technology company across various regions and segments, providing value-added information and technology in fields such as law, tax, accounting, and healthcare [9][10] - Expected revenue and earnings growth rates for TRI are 3.1% and 4.2%, respectively, for the current year, with a 1.3% improvement in the Zacks Consensus Estimate for current-year earnings over the past 30 days [10] Healthcare Services Group Inc. (HCSG) - HCSG provides management and operational services to healthcare facilities, making it a preferred choice for clients in the sector [11][12] - Expected revenue and earnings growth rates for HCSG are 5.1% and 58.5%, respectively, for the current year, with a 5% improvement in the Zacks Consensus Estimate for current-year earnings over the past seven days [12] ZipRecruiter Inc. (ZIP) - ZIP operates an online marketplace connecting job seekers and employers, offering various recruitment and hiring services [13] - Expected revenue and earnings growth rates for ZIP are 9% and 13%, respectively, for the next year, with a 3.8% improvement in the Zacks Consensus Estimate for next-year earnings over the past 30 days [14] Bright Horizons Family Solutions Inc. (BFAM) - BFAM provides employer-sponsored child care and early education solutions, managing child care centers for various organizations [15][16] - Expected revenue and earnings growth rates for BFAM are 7.6% and 18.4%, respectively, for the current year, with a significant 24.6% improvement in the Zacks Consensus Estimate for current-year earnings over the past 30 days [17]