Brink's (BCO)

Cash management services provider Brink's (NYSE:BCO) reported revenue ahead of Wall Street’s expectations in Q1 CY2025, but sales were flat year on year at $1.25 billion. Guidance for next quarter’s revenue was optimistic at $1.28 billion at the midpoint, 3% above analysts’ estimates. Its non-GAAP profit of $1.62 per share was 38.1% above analysts’ consensus estimates.

Company Overview

Known for its iconic armored trucks that have been a fixture in American cities since 1859, Brink's (NYSE:BCO) provides secure transportation and management of cash and valuables for banks, retailers, and other businesses worldwide.

Rising concerns over physical security, cybersecurity threats, and workplace safety regulations will present opportunities for companies in this sector. AI and digitization will enhance surveillance, access control, and threat detection, which could benefit key players in Safety & Security Services. These trends could also introduce ethical and regulatory concerns over data privacy and automated decision-making in security operations, giving rise to headline risks. Finally, increasing scrutiny on private security practices and evolving criminal justice policies again mean that companies in the space need to operate with the utmost care or risk being the poster child of abuse of power.

Brink's main competitors in the global cash management and secure logistics industry include Loomis AB (Sweden), Prosegur (Spain), and Garda World Security Corporation (Canada).

A company’s long-term performance is an indicator of its overall quality. Any business can put up a good quarter or two, but many enduring ones grow for years.

With $5.02 billion in revenue over the past 12 months, Brink's is one of the larger companies in the business services industry and benefits from a well-known brand that influences purchasing decisions.

As you can see below, Brink's grew its sales at a decent 6.6% compounded annual growth rate over the last five years. This shows its offerings generated slightly more demand than the average business services company, a useful starting point for our analysis.

We at StockStory place the most emphasis on long-term growth, but within business services, a half-decade historical view may miss recent innovations or disruptive industry trends. Brink’s recent performance shows its demand has slowed as its annualized revenue growth of 4% over the last two years was below its five-year trend.

This quarter, Brink’s $1.25 billion of revenue was flat year on year but beat Wall Street’s estimates by 2.8%. Company management is currently guiding for a 1.7% year-on-year increase in sales next quarter.

Looking further ahead, sell-side analysts expect revenue to remain flat over the next 12 months, a deceleration versus the last two years. This projection is underwhelming and indicates its products and services will face some demand challenges.

Brink's was profitable over the last five years but held back by its large cost base. Its average operating margin of 8.6% was weak for a business services business.

On the plus side, Brink’s operating margin rose by 5.1 percentage points over the last five years, as its sales growth gave it immense operating leverage.

In Q1, Brink's generated an operating profit margin of 9.5%, in line with the same quarter last year. This indicates the company’s overall cost structure has been relatively stable.

We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.

Brink’s EPS grew at a spectacular 14.6% compounded annual growth rate over the last five years, higher than its 6.6% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded.

Diving into Brink’s quality of earnings can give us a better understanding of its performance. As we mentioned earlier, Brink’s operating margin was flat this quarter but expanded by 5.1 percentage points over the last five years. On top of that, its share count shrank by 16.8%. These are positive signs for shareholders because improving profitability and share buybacks turbocharge EPS growth relative to revenue growth.

In Q1, Brink's reported EPS at $1.62, down from $1.65 in the same quarter last year. Despite falling year on year, this print easily cleared analysts’ estimates. Over the next 12 months, Wall Street expects Brink’s full-year EPS of $7.15 to grow 4.4%.

If you’ve followed StockStory for a while, you know we emphasize free cash flow. Why, you ask? We believe that in the end, cash is king, and you can’t use accounting profits to pay the bills.

Brink's has shown decent cash profitability, giving it some flexibility to reinvest or return capital to investors. The company’s free cash flow margin averaged 6.2% over the last five years, slightly better than the broader business services sector.

Taking a step back, we can see that Brink’s margin dropped by 3.4 percentage points during that time. If its declines continue, it could signal increasing investment needs and capital intensity.

Brink's burned through $119.1 million of cash in Q1, equivalent to a negative 9.6% margin. The company’s cash burn increased meaningfully year on year and is a deviation from its longer-term margin, indicating it is a seasonal business that must build up inventory during certain quarters.

EPS and free cash flow tell us whether a company was profitable while growing its revenue. But was it capital-efficient? Enter ROIC, a metric showing how much operating profit a company generates relative to the money it has raised (debt and equity).

Brink's historically did a mediocre job investing in profitable growth initiatives. Its five-year average ROIC was 12.7%, somewhat low compared to the best business services companies that consistently pump out 25%+.

We like to invest in businesses with high returns, but the trend in a company’s ROIC is what often surprises the market and moves the stock price. Brink’s ROIC has increased over the last few years. This is a good sign, and we hope the company can continue improving.

Brink's reported $1.23 billion of cash and $4.17 billion of debt on its balance sheet in the most recent quarter. As investors in high-quality companies, we primarily focus on two things: 1) that a company’s debt level isn’t too high and 2) that its interest payments are not excessively burdening the business.

With $908.7 million of EBITDA over the last 12 months, we view Brink’s 3.2× net-debt-to-EBITDA ratio as safe. We also see its $37.5 million of annual interest expenses as appropriate. The company’s profits give it plenty of breathing room, allowing it to continue investing in growth initiatives.

We were impressed by how significantly Brink's blew past analysts’ revenue, EPS, and EBITDA expectations this quarter. We were also glad its revenue guidance for next quarter trumped Wall Street’s estimates. On the other hand, its quarterly EPS and EBITDA guidance missed. Overall, we think this was a decent quarter with some key metrics above expectations. Investors were likely hoping for more, and shares traded down 1.4% to $93 immediately after reporting.

Updated: July 10, 2025 at 12:18 AM EDT

Before making an investment decision, investors should account for Brink’s business fundamentals and valuation in addition to what happened in the latest quarter.

Brink's isn’t a terrible business, but it doesn’t pass our quality test. Although its revenue growth was good over the last five years, it’s expected to deteriorate over the next 12 months and its cash profitability fell over the last five years. And while the company’s astounding EPS growth over the last five years shows its profits are trickling down to shareholders, the downside is its mediocre ROIC lags the market and is a headwind for its stock price.

Brink’s P/E ratio based on the next 12 months is 12.6x. While this valuation is fair, the upside isn’t great compared to the potential downside. We're fairly confident there are better stocks to buy right now.

Wall Street analysts have a consensus one-year price target of $126.50 on the company (compared to the current share price of $93.56).

Although the price target is bullish, readers should exercise caution because analysts tend to be overly optimistic. The firms they work for, often big banks, have relationships with companies that extend into fundraising, M&A advisory, and other rewarding business lines. As a result, they typically hesitate to say bad things for fear they will lose out. We at StockStory do not suffer from such conflicts of interest, so we’ll always tell it like it is.