Cintas Inc. (NASDAQ: CTAS) is a leading provider of workplace uniforms in the business services sector. As the dominant player in the uniform and facility services industry, Cintas has been trying to grow its market share by proposing a $275 per share takeover offer to competitor UniFirst Co. (NYSE: UNF).

However, UniFirst has flatly rejected the offer, which was a 25% premium to its closing price on Jan. 10, 2025. Nonetheless, business has been robust for Cintas, as evidenced by its five straight years of EPS beats, with a record $5 billion in revenues expected in 2025.

The Trump administration’s plan to levy up to 25% tariffs on trading partners and deport millions of migrants has caused investors to sell the news on CTAS stock. With shares having fallen 9% in just over 30 days, bullish investors may see this as a buying opportunity.

Cintas Has a Solutions for Every Business

In addition to uniform sales and rentals, Cintas generates nearly 50% of its revenues from its facilities business, which provides cleaning supplies, first aid cabinets, fire extinguishers, exit lights, mats, mops, and alarms to bathroom supplies and sprinkler systems. The company is the leader in the United States in providing uniforms to healthcare, hospitality, manufacturing, automotive, education, state, and local government agencies. New business is strong, and retention rates are robust. The solid labor market in the United States, evidenced by the 256,000 new jobs and the unemployment rate drop to 4.1% in December 2024, continues to feed its growth.

A Solid FQ2 With Margin Improvement

Cintas reported fiscal second-quarter 2025 EPS of $1.09, beating consensus analyst estimates by 8 cents. Revenues grew 7.8% year-over-year (YoY) to $2.56 billion, matching consensus estimates. Organic revenue growth was 7.1%.

The gross margin for the quarter was $1.28 billion, up 11.8% or $1.1 billion from the year-ago period. Gross margin was 49.8%, up from 48% in the year-ago period. Operating income rose to 23.1%, up from 21% in FQ2 2024. Net income rose 19.7% YoY to $448.5 million.

Guidance Craters the Stock Despite Raising Forecasts

Cintas raised its forecast for the fiscal full-year 2025 EPS to $4.28 to $4.34, up from $417 to $4.25 per previous guidance, versus $4.24 consensus estimates. Full-year revenue guidance was raised to $10.255 billion to $10.320 billion, up from $10.22 billion to $10.32 billion earlier forecasts versus $10.28 billion consensus estimates. Despite the solid FQ2 earnings report and raised guidance, the stock sold off 10.6% the following day. This is likely linked to the organic revenue growth guidance to 7% to 7.7%, down slightly from 7% to 8.1% prior guidance, essentially cutting its high end. Nonetheless, the company still expects to break the $10 billion mark, hitting a new record, with two fewer workdays in 2025.

Cintas CEO Todd Schneider commented, “Cintas delivered strong results in the second quarter, with robust year-over-year revenue and earnings growth, excellent margin expansion, and strong cash generation. Our results reflect the exceptional execution of our employee-partners and the comprehensive value proposition we provide to our customers in supporting their image, safety, cleanliness, and compliance needs.”

CTAS Forms a Descending Triangle Pattern

A descending triangle is normally a bearish chart pattern indicator of lower highs on the bounce against flat bottom support. The descending upper trendline converges with the flat-bottom horizontal lower trendline support at the apex. A breakdown triggers if the stock falls below the lower trendline support. A breakout triggers if the stock surges above the upper trendline resistance.

CTAS formed its descending upper trendline resistance at $228.12, converging with its flat-bottom lower trendline support at $181.04. CTAS is retesting the upper trendline resistance for a second attempt at a breakout. The daily anchored VWAP is rising at $186.80. The daily RSI is stalled around the 40-band. Fibonacci (Fib) pullback support levels are at $181.04, $172.74, $167.79, and $162.16.

CTAS’s average consensus price target is $198.46, implying a 4.84% upside and its highest analyst price target sits at $245.00. It has five analysts' Buy ratings, five Hold, and two Sell Ratings. The stock has a 1.47% short interest.

Actionable Options Strategies: Bullish investors can consider using cash-secured puts at the Fib pullback support levels to buy the dip. If assigned the shares, then writing covered call at upside Fib levels executes a wheel strategy for income on top of its 0.82% dividend yield.