Cintas has built an enviable business model centered on uniform rental and facility services, serving over one million businesses across North America. The route-based delivery model creates high customer retention and predictable recurring revenue. With a P/E of 41.8 and EPS of $4.63, Cintas trades at a steep premium, but the consistency of its execution and decades-long track record of earnings growth partially justify the multiple. The stock has underperformed modestly over the past year, declining about 5%, though it remains near the middle of its 52-week range. The bull case rests on continued market share gains, cross-selling opportunities, and the essential nature of its services driving recession-resilient revenue. The bear case involves the elevated valuation leaving little room for execution missteps, potential margin pressure from wage inflation in its labor-intensive operations, and limited geographic diversification beyond North America. Cintas is a quality compounder best suited for long-term holders.

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Site: Cintas (ID: 2025)