Core Viewpoint - Growth investors seek stocks with above-average financial growth, but identifying stocks that can fulfill their potential is challenging [1] Group 1: Company Overview - Cintas (CTAS) is highlighted as a recommended stock with a favorable Growth Score and a top Zacks Rank [2] - The company exhibits strong growth features that consistently outperform the market [3] Group 2: Earnings Growth - Cintas has a historical EPS growth rate of 15.4%, with projected EPS growth of 13.7% this year, surpassing the industry average of 12.2% [5] Group 3: Cash Flow Growth - Cintas shows a year-over-year cash flow growth of 14.6%, exceeding the industry average of 9.7% [6] - The company's annualized cash flow growth rate over the past 3-5 years is 10.9%, compared to the industry average of 9.8% [7] Group 4: Earnings Estimate Revisions - The current-year earnings estimates for Cintas have increased by 2% over the past month, indicating a positive trend in earnings estimate revisions [8] Group 5: Investment Potential - Cintas holds a Zacks Rank 2 and a Growth Score of B, suggesting it is a potential outperformer and a solid choice for growth investors [10]

Market Overview - The U.S. stock market experienced its worst week since mid-November, with the Dow Jones falling 2.3%, the S&P 500 declining 2%, and the Nasdaq Composite Index dropping 1.8% [1] - Investors are anticipating a Santa Claus rally, which typically occurs in the final week of the calendar year and extends into the first two days of the New Year [2] Economic Indicators - The U.S. economy is expanding, driven by rising consumer confidence and increased spending power, with economic output reaching its highest level in nearly three years in December [3] - The S&P Global's flash U.S. composite PMI rose to 56.6 in December, up from 54.9 in August, indicating growth in both services and manufacturing sectors [3] - Retail sales in November rose faster than expected, reflecting strong consumer spending and economic momentum [12] - The University of Michigan's consumer sentiment index increased to 74 in December from 71.8 the previous month, marking the fifth consecutive month of improvement [12] Federal Reserve Actions - The Federal Reserve has cut interest rates for the third time in three months, bringing the benchmark rate to 4.25-4.50%, which is expected to lower borrowing costs and support business expansion [4] - The Fed's outlook has shifted, now projecting only two rate cuts in 2025 compared to four previously anticipated, due to a solid labor market and persistent inflation [9] Company Highlights - Upstart, an AI lending platform, saw its stock tumble 19% last week but has an estimated earnings growth rate of 204% for 2025 [5] - Industrial Logistics Properties has a Zacks Rank of 2 and a Momentum Score of A, despite a 13% decline in stock price last week and an estimated earnings growth rate of 25% for 2025 [6][13] - Cintas Corporation provides specialized services across North America, including corporate identity uniform programs and restroom supplies [7] - monday.com has an estimated earnings growth rate of 11.2% for this year, holds a Zacks Rank of 1, and has a Momentum Score of A [8] - Sezzle, a digital payments company, has an estimated earnings growth rate of 27.97% for the next year and also holds a Zacks Rank of 1 with a Momentum Score of A [14][17] Investment Opportunities - A selection of stocks, referred to as "Secret Santas," includes Upstart Holdings Inc., Industrial Logistics Properties Trust, Sezzle Inc., Cintas Corporation, and monday.com, all of which have underperformed recently but show strong growth potential for 2025 [10]

Growth stocks are attractive to many investors, as above-average financial growth helps these stocks easily grab the market's attention and produce exceptional returns. But finding a great growth stock is not easy at all.In addition to volatility, these stocks carry above-average risk by their very nature. Also, one could end up losing from a stock whose growth story is actually over or nearing its end.However, the Zacks Growth Style Score (part of the Zacks Style Scores system), which looks beyond the trad ...

Cintas Corporation (CTAS) reported second-quarter fiscal 2025 (ended Nov. 30, 2024) earnings of $1.09 per share, which beat the Zacks Consensus Estimate of $1.01. The bottom line increased 21.1% year over year despite an increase in operating costs.Total revenues of $2.562 billion marginally outperformed the consensus estimate of $2.56 billion. The top line rose 7.8% year over year, driven by higher segmental revenues. Organic sales were up 7.1% year over year.Stay up-to-date with all quarterly releases: Se ...

Core Insights - Cintas reported solid Q2 results with $2.56 billion in revenue, reflecting a 7.8% year-over-year increase, driven by growth in both the core uniform segment and the smaller Other segment [1][9] - The company raised its revenue and earnings guidance, indicating a positive outlook for future performance [2] - Cintas maintains a strong dividend profile with an annual dividend of $1.56 and a remarkable 92.59% annualized three-year dividend growth [3][10] Financial Performance - The gross margin expanded by 180 basis points and the operating margin by 210 basis points, contributing to a 19.7% increase in net income [9] - Free cash flow improved significantly, up by 35% in the first half of the year [9] - The company has a dividend payout ratio of 39.39% and a long-term liability less than 1x, indicating a healthy balance sheet [11] Market Sentiment - Analysts have shifted consensus sentiment to Hold from Moderate Buy, with a price target revision suggesting a potential market price of $200 in 2025, indicating a possible 30% gain from current levels [5][8] - Despite a recent stock price correction, there is optimism that the stock may be near its bottom, presenting a buying opportunity [7] Capital Returns - Cintas is recognized for its reliable and growing capital returns, including dividends and share repurchases, which have reduced share count by an average of 0.6% [4][10] - The company has a strong track record of dividend increases, maintaining a 42-year history of dividend growth [10]

Cintas Corporation (NASDAQ: CTAS ) is a stock that we have traded at our service and have covered publicly a number of times. The stock recently underwent a stock split following its ongoing rise to attractLooking for our highest conviction ideas?Win with our playbook to advance your savings and retirement timeline by embracing a blended trading and investing approach at our one-stop shop.We activated our HOLIDAY deal so you can lock in our best price in years BEFORE prices rise January 1st. Join Seeking Al ...

Key TakeawaysCintas shares tumbled Thursday as the provider of uniforms and other business supplies reported a decline in direct sales of its uniforms and warned about pricing.Second-quarter revenue and profit topped analysts' estimates.Shares of Cintas sank to their lowest level since August. Cintas (CTAS) shares tumbled nearly 10% intraday Thursday as the provider of uniforms and other business supplies reported a decline in direct sales of its uniforms and warned about pricing. In a transcript of the com ...

Financial Data and Key Metrics - Total revenue for Q2 2025 grew 7.8% to $2.56 billion, an all-time high for quarterly revenue [6] - Organic growth rate adjusted for acquisitions and FX fluctuations was 7.1% [7] - Gross margin increased 11.8% YoY to 49.8%, just below the all-time high set in Q1 [8] - Operating income as a percentage of revenue reached a record 23.1%, up 18.4% YoY [8] - Diluted EPS grew 21.1% to $1.09 [9] - Free cash flow for the first six months increased 34.9% YoY [9] Business Line Performance - Uniform Rental and Facility Services grew 6.9% organically [17] - First Aid and Safety Services grew 12.3% organically [17] - Fire Protection Services grew 10% organically [17] - Uniform Direct Sales declined 9.2% [17] - Gross margin by business: Uniform Rental and Facility Services (49.1%), First Aid and Safety Services (57.3%), Fire Protection Services (49.9%), Uniform Direct Sales (41.2%) [18] Market Performance - Strong demand across all markets, particularly in healthcare, hospitality, education, and state/local government verticals [7][8] - The company continues to deepen its value proposition in these verticals, which are performing above normal operating levels of growth [86] Strategy and Industry Competition - The company is focused on operational excellence, leveraging technology investments, and optimizing routes and energy usage [9][11] - Strategic investments in customers and employee partners are key priorities, alongside returning capital to shareholders through dividends and share buybacks [10][12] - The company is actively pursuing M&A opportunities, particularly in route-based businesses, to expand its customer base and extract synergies [62][142] Management Commentary on Operating Environment and Future Outlook - Management is confident in the company's ability to deliver long-term value, citing strong momentum and a differentiated culture [14] - The company updated its annual revenue guidance to $10.255 billion to $10.32 billion, representing a growth rate of 6.9% to 7.5% [13] - Diluted EPS guidance was updated to $4.28 to $4.34, reflecting a growth rate of 12.9% to 14.5% [13] - Management noted that obtaining price increases has become more challenging, but the company is still achieving historical levels of price increases [41][66] Other Important Information - The company paid a quarterly cash dividend of $0.39 per share [12] - Net interest expense for fiscal 2025 is expected to be approximately $101 million, up from $95 million in fiscal 2024 due to higher variable rate debt [25] - The effective tax rate for fiscal 2025 is expected to be 20.2% [25] Q&A Summary Question: Why was the high-end of the organic growth guide lowered? - The high-end of the organic growth guide was lowered from 8.1% to 7.7%, but the implied growth rate for the back half of the year remains unchanged at 6.6% to 7.9% [28][33] - The adjustment reflects fine-tuning around the edges rather than a significant change in outlook [35] Question: What drove the strong incremental EBITDA margins in the quarter? - The strong incremental EBITDA margins of 60% were driven by robust revenue growth and operational efficiencies, with no one-off factors contributing [36][38] Question: How is pricing trending compared to historical levels? - Price increases have returned to historical levels of 0% to 2%, down from higher levels during peak inflation [41][152] Question: What is the impact of proposed tariffs on material costs? - The company is closely monitoring tariff proposals but is well-positioned with a dual-sourced supply chain and geographic diversity to mitigate potential impacts [45][46] Question: How is the Uniform Direct Sales business performing? - Uniform Direct Sales declined 9.2% in the quarter, reflecting the lumpy nature of this business, but it remains a strategic area for the company [17][90] Question: What are the key drivers of margin improvement? - Margin improvements are driven by operational efficiencies, including garment sharing, automated sorting, and SmartTruck routing optimization [98][101][102] Question: What is the outlook for M&A activity? - The company remains active in M&A, focusing on quality businesses with strong customer bases and employee partners, particularly in route-based businesses [62][142] Question: How is the myCintas portal contributing to margins? - The myCintas portal enhances customer experience and operational efficiency, contributing to margin improvements by reducing cash application and call center volumes [146][149]

Shares of professional uniform company Cintas (CTAS -9.47%) plunged 9.3% on Thursday as of 12 p.m. EDT.Cintas has been a long-term winner in the market and, prior to the past week, had been up some 50% on the year. However, the past week's inflation scare and last night's "disappointing" earnings report sent shares tumbling today.Cintas' valuation didn't leave room for errorAt first glance, one might be confused as to why investors had such a negative reaction to these numbers. Revenue was up 7.8% to $2.56 ...

Cintas (CTAS) reported $2.56 billion in revenue for the quarter ended November 2024, representing a year-over-year increase of 7.8%. EPS of $1.09 for the same period compares to $0.90 a year ago.The reported revenue compares to the Zacks Consensus Estimate of $2.56 billion, representing a surprise of +0.05%. The company delivered an EPS surprise of +7.92%, with the consensus EPS estimate being $1.01.While investors closely watch year-over-year changes in headline numbers -- revenue and earnings -- and how t ...