Serco Group plc (SRP.L) stock analysis

In our weekly check, Serco Group plc is graded B (A to F). Of 25 checks on debt, profit, cash flow and trend: 17 pass, warnings: 5, red flags: 3.

About Serco Group plc

Serco Group plc is an Industrials company (Specialty Business Services) based in the United Kingdom, listed on LSE as SRP.L.

What our checks show for SRP.L

Red flags

• The net margin fell by 3.9 points over 5 years, to 3%: the company keeps less of each sale as profit.
• The net margin is only 3%: little room if costs rise.
• The stock has fallen as much as 86% from a peak. Would you have held through that?

Warning signs

• Net debt is 1.4x a year of EBITDA (debt/equity 1.04). That limits room in a downturn and raises refinancing risk.
• Analysts expect only about 3.9% a year of growth in revenue.
• Revenue grew only 2.5% a year over the last 3 years.
• Net profit fell 2.1% a year over the last 3 years.
• The stock is still below its previous peak.

Strengths

• The gross margin is 11.5% and has risen by 0.9 points: pricing power is holding.
• Operating cash flow is 2.93x net profit: the profit arrives as real cash.
• Analysts expect earnings per share to grow about 16.9% a year over the next years.
• The dividend takes 22% of profit: there is a cushion.
• Beta 0.52: the stock usually moves less than the market.
• The share count fell by 8.8% in 2 years: the company buys back its own shares.

Similar companies

BFAM · MTO.L · CBZ · ABM · FLYW · PAGS

Questions

What grade does Serco Group plc (SRP.L) have?

In our weekly check, Serco Group plc is graded B (A to F). Of 25 checks on debt, profit, cash flow and trend: 17 pass, warnings: 5, red flags: 3. The grade is a risk check, not a buy or sell recommendation.

What are the main risks of SRP.L stock?

This week's biggest flags for Serco Group plc: Margins falling, Thin margins, Deep past fall. In total 8 of 25 checks show a warning or a red flag.

What does Serco Group plc do?

Serco Group plc is an Industrials company (Specialty Business Services) based in the United Kingdom, listed on LSE as SRP.L.

The grade is a risk check, not a price forecast, and not investment advice. In our 10-year test (S&P 500, 2016-2026), stocks we graded A or B fell more than 30% 2-3 times less often than D or F, without a lower average return.

Updated 2026-10-31

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