Jim Cramer - Mad Money Cintas Corp CTAS-Q BUY ON WEAKNESS May 28, 2024

They just reported a massive beat and shares jumped 5%. The short-sellers bet wrong.

CTAS operates as a corporate uniform service provider, and is now trading at 35x times' Forward P/E. In the last five years, sales grew around 6% on average. The balance sheet is strong, with net debt of $2.5B. Net debt/EBITDA is currently at 1.1x. Based on consensus estimates, sales are expected to grow by 6%-8% on average over the next few years. The company has been consistently raising dividends and repurchasing shares over the last few years, which we like. Overall, a solid company with the recurring business model and shareholder-friendly policies, however, trading at 35x Forward P/E while growth is only around 7% does not seem to us as a screaming buy, but we would be comfortable averaging into the position over time, being more aggressive if valuation dips.
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They report Thursday. They've seen no slowdown in business and he expects that to continue. Buy on any pullback.

Strong organic growth and operating margins, and exceeded high expectations. They did a 4-for-1 split a few weeks ago that will attract new investors.

A great stock. They have a huge pastiche of customers, including Mosaic.

Cintas is launching a hostile takeover of Unifirst. Though the applauds M&A, this deal may need federal anti-trust scrutiny, because of this small market (work uniform rentals), though Cintas insists there is competition from Amazon and Costco.

It reports Wednesday. The market didn't like their last report and shares got hammered. He's worried about small business, and Cintas sells uniforms to small business.