TL;DR: Carriage Services (CSV) runs higher EBITDA, operating and net margins than Service Corp (SCI), the 800 lb gorilla of death. It carries basically the same leverage. Yet the market prices CSV at \~7.8x EBITDA and \~9.8x forward earnings while SCI gets \~11.8x and \~18.3x. Stock is down \~35% from its April high. Every person on this sub is a future customer. Demand is literally guaranteed. Let’s dig in.
What is this thing
CSV is the scrappy #2 public US deathcare operator: 155 funeral homes in 24 states and 28 cemeteries. SCI is the final boss, with 1,495 funeral locations, 505 cemeteries, and \~700,000 families served a year. Same business, same HQ city (Houston), wildly different valuations.
Why it got buried
Two straight quarterly misses. After Q2, the stock fell 10.8% to about $36.92, with EPS of $0.78 against a $0.82 consensus. Management blamed fewer deaths: lower national mortality trends this year caused a 3.5% decline in at-need volume versus Q2 2025. They also trimmed revenue guidance to $435-$445M. Then it kept sliding to a $30.11 low on Sept 21. Closed yesterday at $33.73.
But here’s the thing regards: they held the full-year guide for adjusted EBITDA ($135-$140M), adjusted EPS ($3.35-$3.55) and free cash flow ($40-$50M). Fewer customers, same profits. That’s margin power.
THE BOOMER SUPERCYCLE
This is the macro tailwind nobody can stop. The Census Bureau says that by 2030 every baby boomer will be over 65, so about one in five Americans will be retirement age. By 2034, people 65 and older (77.0M) are projected to outnumber kids under 18 (76.5M) for the first time in US history. Census also projects that deaths will rise substantially from 2020 to 2050 as the population ages.
The 2026 volume weakness is mostly a pull-forward hangover. COVID took deaths that would have happened later, and that pool is being refilled every year by the largest generation in American history. CSV’s whole growth engine is preneed, and the boomers are exactly the people buying cemetery plots and prepaid funerals right now. That’s why preneed interment pricing is up 17% while at-need volume dips: the backlog is getting built today and recognized later.
THE MARGIN DEEP CUT (H1 2026)
|Metric|CSV|SCI|
|:-|:-|:-|
|Revenue|$209.1M|$2,199.7M|
|Gross margin (GAAP)|35.2%|25.5%|
|Corporate G&A % of revenue|11.5%|3.9%|
|Operating margin|23.5%|21.6%|
|EBITDA margin (same build)\*|32.1%|\~29.7%|
|Adj. net margin|12.6%|11.8%|
|Interest as % of EBITDA|20.2%|19.7%|
|Net debt / EBITDA|\~3.9x|\~3.85x|
|FCF / EBITDA (2026 guide)|33%|\~53%|
Where CSV wins:
- Field profitability is elite. 35% gross margin vs SCI’s 25.5%. In Q2, CSV posted cemetery comparable EBITDA margin of 44.5% and funeral comparable EBITDA margin of 36.5%. Meanwhile SCI’s comparable funeral gross margin dropped 130 bps to 18.5%, which SCI attributed to selling compensation on insurance-funded preneed being expensed upfront.
- The cheat code: financial revenue. CSV’s financial EBITDA margin was 93.2% in Q2, and that line grew 14%. Earlier in the year, CSV said financial revenue growth came mainly from an 8% jump in insurance-funded preneed contracts boosting general agency commissions. In Q2 those insurance-funded contracts grew 21.1%. SCI eats the selling cost on this stuff; CSV is clipping a 93% margin coupon on it.
- Pricing power is real. Comparable funeral revenue per contract: CSV $6,088 (+3.7%) vs SCI $6,016 (+3.3%). Cemetery is where it gets spicy: CSV’s comparable average price per preneed interment right rose from $5,894 to $6,950. That’s +17.9% YoY on dirt. Land is the only thing they’re not making more of, and CSV is pricing it like Man