Cintas’ Digital Push Is Paying Off With Higher Retention, Analyst Says

by | Dec 19, 2025 | General

Cintas Corporation (NASDAQ:CTAS) stock slipped on Friday despite a modest earnings and revenue beat, as well as a higher full-year outlook.

On Thursday, the company reported second-quarter earnings per share of $1.21, beating the analyst consensus estimate of $1.20.

Quarterly sales of $2.80 billion (+9.3% year over year) beat the Street view of $2.766 billion.

Cintas raised its fiscal 2026 GAAP EPS outlook to $4.81 to $4.88, up from $4.74 to $4.86, compared with the analyst consensus of $4.85.

Analysts’ Take

RBC Capital Markets analyst Ashish Sabadra reiterated the Sector Perform rating on the stock, with a price forecast of $206.

Sabedra said guidance points to a softer revenue cadence in the second half of fiscal 2026, even as profitability stays sturdy.

He wrote that fiscal 2026 incrementals should run 29% to 30% when excluding the $15 million property-sale gain, and he pegged second-half incrementals at 30% to 33%.

Sabedra noted net leverage sits below 1.0x and free cash flow remains strong, which keeps Cintas flexible. He said that cushion supports continued buybacks, steady technology investment, and the ability to pursue M&A.

On pricing, Sabedra said Cintas maintained a stable 2% to 3% range, leveraging technology to deliver value to customers.

The analyst added that these investments are translating into an all-time high in retention, reinforcing the company’s staying power.

Sabedra said cross-selling remains in the early innings, but management is clearly pushing it as a growth lever.

He wrote that the strategy begins with deeper expansion within existing accounts, then extends to a massive opportunity set.

Sabedra estimated the U.S./Canada market at roughly 16 million businesses, with a little over 1 million as current customers.

He said platform upgrades, such as SAP, SmartTruck, and the MyCintas portal, should keep that playbook moving. Sabedra wrote that the tools can drive new sales, sharpen retention, and facilitate cross-selling more easily.

He added that the same digital shift should also support pricing discipline and lift margins over time.

According to the analyst, labor productivity gains across routes and laundry operations, plus lower fuel costs, could add another tailwind.

CTAS Price Action: Cintas shares were down 1.03% at $187.93 at the time of publication on Friday, according to Benzinga Pro data.

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