ServiceMaster Global Holdings, Inc.
Thesis
ServiceMaster is expected to grow free cash flow per share by 15-20% per year, with the stock currently trading at a 7.5% FCF yield. The upcoming spinoff of American Home Shield (AHS) and Terminix is anticipated to unlock additional value for shareholders, with a conservative target price of $60 based on sum-of-the-parts analysis.
Did it work?
failed
confidence: high
The thesis called for 15-20% annual FCF/share growth and a $60 target via sum-of-the-parts, but the stock has collapsed 84.3% over 103 months — nearly nine years, far beyond any reasonable horizon for the stated targets. The spinoff catalyst has long since occurred and the price outcome is decisively negative, so the thesis is clearly invalidated rather than an interim fluctuation.