SERV - Embedded Expectations Analysis - 2020 04 21
ï€ ServiceMaster Global Holdings, Inc. (SERV:USA) currently trades above corporate averages relative to UAFRS-based (Uniform) earnings, with a 26.4x Uniform P/E. At these levels, markets have bullish expectations for the firm, but management appears concerned about termite damage claims, their customer experience platform, and strategic brand alternativesï€ Specifically, management may lack confidence in their ability to sustain organic growth, identify strategic brand alternatives, and mitigate their exposure to termite damage risks, specifically in the Mobile Bay Area. Furthermore, they may be exaggerating their focus on improving customer experience, and they may be concerned about the progress of their CEO search and margin pressures from their ongoing operational and system improvement initiatives. Moreover, they may be downplaying concerns about higher production labor costs, increased sales commissions, and termite damage claims expenses. Finally, they may have concerns about the launch of their customer experience platform, the threat of ongoing litigation, and they may be exaggerating the capabilities of their improved inspection tools and techniques
ServiceMaster Global Holdings is a holding company. Through its subsidiaries, the company provides services to residential and commercial customers in the termite, pest control, cleaning and restoration markets, operating through a network of company-owned locations and franchise and license agreements. The company's portfolio of brands includes Terminix (residential termite and pest control), Terminix Commercial (commercial termite and pest control), Copesan (commercial national accounts pest management), ServiceMaster Restore (restoration), ServiceMaster Clean (commercial cleaning), Merry Maids (residential cleaning), Furniture Medic (cabinet and furniture repair) and AmeriSpec (home inspections).
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