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Cintas (CTAS) Gains But Lags Market: What You Should Know

Zacks Equity Research

Cintas (CTAS) closed the most recent trading day at $268.89, moving +0.08% from the previous trading session. This change lagged the S&P 500's 0.97% gain on the day. Meanwhile, the Dow gained 1.11%, and the Nasdaq, a tech-heavy index, added 1.13%.

Coming into today, shares of the uniform rental company had gained 3.88% in the past month. In that same time, the Industrial Products sector gained 3.63%, while the S&P 500 gained 2.16%.

Investors will be hoping for strength from CTAS as it approaches its next earnings release. The company is expected to report EPS of $2.03, up 15.34% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $1.82 billion, up 6.04% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $8.57 per share and revenue of $7.32 billion, which would represent changes of +12.76% and +6.14%, respectively, from the prior year.

Investors should also note any recent changes to analyst estimates for CTAS. These recent revisions tend to reflect the evolving nature of short-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. CTAS is currently a Zacks Rank #2 (Buy).

Investors should also note CTAS's current valuation metrics, including its Forward P/E ratio of 31.35. This valuation marks a premium compared to its industry's average Forward P/E of 25.04.

Also, we should mention that CTAS has a PEG ratio of 3.02. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The Uniform and Related industry currently had an average PEG ratio of 2.23 as of yesterday's close.

The Uniform and Related industry is part of the Industrial Products sector. This industry currently has a Zacks Industry Rank of 101, which puts it in the top 40% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.

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