The end of an earnings season can be a great time to discover new stocks and assess how companies are handling the current business environment. Let’s take a look at how Casella Waste Systems (NASDAQ:CWST) and the rest of the waste management stocks fared in Q3.
Waste management companies can possess licenses permitting them to handle hazardous materials. Furthermore, many services are performed through contracts and statutorily mandated, non-discretionary, or recurring, leading to more predictable revenue streams. However, regulation can be a headwind, rendering existing services obsolete or forcing companies to invest precious capital to comply with new, more environmentally-friendly rules. Lastly, waste management companies are at the whim of economic cycles. Interest rates, for example, can greatly impact industrial production or commercial projects that create waste and byproducts.
The 8 waste management stocks we track reported a softer Q3. As a group, revenues missed analysts’ consensus estimates by 2.1%.
Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 8.2% since the latest earnings results.
Casella Waste Systems (NASDAQ:CWST)
Starting with the founder picking up garbage with a pickup truck he purchased using savings from high school, Casella (NASDAQ:CWST) offers waste management services for businesses, residents, and the government.
Casella Waste Systems reported revenues of $411.6 million, up 16.7% year on year. This print was in line with analysts’ expectations, but overall, it was a softer quarter for the company with a significant miss of analysts’ adjusted operating income estimates.
“We posted another solid quarter of execution against our growth strategies across our business," said John W. Casella, Chairman and CEO of Casella Waste Systems,
Casella Waste Systems scored the fastest revenue growth but had the weakest full-year guidance update of the whole group. Unsurprisingly, the stock is up 10.9% since reporting and currently trades at $112.34.
Read our full report on Casella Waste Systems here, it’s free.
Best Q3: Waste Management (NYSE:WM)
Headquartered in Houston, Waste Management (NYSE:WM) is a provider of comprehensive waste management services in North America.
Waste Management reported revenues of $5.61 billion, up 7.9% year on year, outperforming analysts’ expectations by 1.7%. The business had a strong quarter with a decent beat of analysts’ adjusted operating income estimates.
Waste Management pulled off the biggest analyst estimates beat among its peers. The market seems happy with the results as the stock is up 7% since reporting. It currently trades at $222.95.
Is now the time to buy Waste Management? Access our full analysis of the earnings results here, it’s free.
Weakest Q3: Quest Resource (NASDAQ:QRHC)
Recycling corporate waste to help companies be more sustainable, Quest Resource (NASDAQ:QRHC) is a provider of waste and recycling services.
Quest Resource reported revenues of $72.77 million, up 3.3% year on year, falling short of analysts’ expectations by 5.6%. It was a disappointing quarter as it posted a significant miss of analysts’ EBITDA and EPS estimates.
As expected, the stock is down 15.7% since the results and currently trades at $6.94.
Read our full analysis of Quest Resource’s results here.
Enviri (NYSE:NVRI)
Cooling America’s first indoor ice rink in the 19th century, Enviri (NYSE:NVRI) offers steel and waste handling services.
Enviri reported revenues of $573.6 million, up 9.3% year on year. This print lagged analysts' expectations by 6.5%. It was a disappointing quarter as it also logged full-year EBITDA guidance missing analysts’ expectations.
Enviri had the weakest performance against analyst estimates among its peers. The stock is down 24.6% since reporting and currently trades at $7.57.
Read our full, actionable report on Enviri here, it’s free.
Republic Services (NYSE:RSG)
Processing several million tons of recyclables annually, Republic (NYSE:RSG) provides waste management services for residences, companies, and municipalities.
Republic Services reported revenues of $4.08 billion, up 6.5% year on year. This print lagged analysts' expectations by 1%. Taking a step back, it was a mixed quarter as it also recorded an impressive beat of analysts’ adjusted operating income estimates but a slight miss of analysts’ sales volume estimates.
The stock is up 6.2% since reporting and currently trades at $217.00.
Read our full, actionable report on Republic Services here, it’s free.
Market Update
In response to the Fed's rate hikes in 2022 and 2023, inflation has been gradually trending down from its post-pandemic peak, trending closer to the Fed's 2% target. Despite higher borrowing costs, the economy has avoided flashing recessionary signals. This is the much-desired soft landing that many investors hoped for. The recent rate cuts (0.5% in September and 0.25% in November 2024) have bolstered the stock market, making 2024 a strong year for equities. Donald Trump’s presidential win in November sparked additional market gains, sending indices to record highs in the days following his victory. However, debates continue over possible tariffs and corporate tax adjustments, raising questions about economic stability in 2025.
Want to invest in winners with rock-solid fundamentals? Check out our Top 5 Growth Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.
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