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Casella Waste Systems (CWST)
NASDAQ:CWST
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Casella Waste
(NASDAQ:CWST)64Neutral
Positive Factors
Acquisitions
CWST completed 8 acquisitions with over $200 million in revenues, strengthening its footprint in the Mid-Atlantic region and expanding into adjacent markets.
Cash Flow
Cash generation is a key bright spot with an adjusted free cash flow of $158 million, up 23% year-over-year and above the guide.
Negative Factors
Valuation
Valuation remains at a notable premium to the waste sector.
Casella Waste (CWST) vs. S&P 500 (SPY)
Market Cap
$7.21B
Dividend YieldN/A
Average Volume (3M)384.42K
Price to Earnings (P/E)497.9
Beta (1Y)0.66
Revenue Growth23.15%
EPS Growth-50.55%
CountryUS
Employees5,100
SectorIndustrials
Sector Strength66
IndustryWaste Management
Share Statistics
EPS (TTM)0.22
Shares Outstanding62,370,274
10 Day Avg. Volume443,578
30 Day Avg. Volume384,421
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)4.63
Price to Cash Flow (P/CF)16.40
P/FCF Ratio25.50
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$115.40Price Target Upside5.12% Upside
Rating ConsensusHold
Number of Analyst Covering5
Casella Waste Business Overview & Revenue Model
Company DescriptionCasella Waste Systems, Inc. (CWST) is a regional, vertically integrated solid waste services company headquartered in the United States. It operates within the waste management sector, providing a comprehensive range of waste and recycling services. The company's core products and services include solid waste collection, transfer, disposal, and recycling operations, serving both residential and commercial customers primarily in the northeastern United States.
How the Company Makes MoneyCasella Waste Systems makes money through a diversified revenue model that includes several key revenue streams. The primary source of revenue comes from solid waste collection services, which involve transporting waste from residential, commercial, and industrial customers to disposal or recycling facilities. Additionally, the company generates income from its landfill operations, where it charges tipping fees for waste disposal. Casella also operates recycling facilities that recover and sell recyclable materials, adding another stream of revenue. Furthermore, the company offers resource management services, which include consulting and sustainability services aimed at helping clients reduce waste and improve recycling efforts. Strategic partnerships and acquisitions also play a role in expanding Casella's market reach and enhancing its service capabilities, contributing to its overall earnings.
Casella Waste Financial Statement Overview
Summary
Casella Waste exhibits strong revenue growth and stable cash generation, but faces challenges with low net profit margins and increased debt levels. This suggests a need for better financial management to enhance profitability and reduce financial risk.Income Statement
Casella Waste has shown solid revenue growth, increasing from $743 million in 2019 to $1.56 billion in 2024. The company maintains a consistent EBITDA margin, indicating stable operational profitability. However, the net profit margin is relatively low, which points to higher expenses or tax burdens affecting net income.65
Positive
Balance Sheet
The company's debt-to-equity ratio has increased significantly, indicating a high reliance on debt financing which could pose risks if not managed well. The equity ratio has improved over time, showing a growing asset base supported by equity. Casella Waste's return on equity has been declining, reflecting challenges in generating profits from shareholders' investments.55
Neutral
Cash Flow
Operating cash flow has been consistently positive, supporting the company’s operations and capital expenditures. However, free cash flow growth has been volatile, with a significant drop in 2024 due to high capital expenditures. The operating cash flow to net income ratio suggests strong cash generation compared to net income.60
Neutral
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 1.56B | 1.26B | 1.09B | 889.21M | 774.58M | Gross Profit |
| 529.95M | 261.80M | 361.97M | 306.81M | 258.94M | EBIT |
| 72.76M | 80.43M | 95.39M | 77.66M | 59.30M | EBITDA |
| 318.37M | 274.17M | 248.29M | 208.78M | 151.46M | Net Income Common Stockholders |
| 13.54M | 25.40M | 53.08M | 41.10M | 91.11M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 383.30M | 220.91M | 71.15M | 33.81M | 154.34M | Total Assets |
| 3.23B | 2.54B | 1.45B | 1.28B | 1.19B | Total Debt |
| 117.36B | 1.12B | 658.33M | 616.09M | 609.18M | Net Debt |
| 117.36B | 897.64M | 587.18M | 582.28M | 454.83M | Total Liabilities |
| 1.68B | 1.51B | 951.32M | 861.12M | 831.76M | Stockholders Equity |
| 1.55T | 1.02B | 497.90M | 422.46M | 362.14M |
| Cash Flow | Free Cash Flow | |||
| 77.85M | 78.19M | 86.35M | 59.44M | 31.81M | Operating Cash Flow |
| 281.36M | 233.09M | 217.31M | 182.74M | 139.92M | Investing Cash Flow |
| -670.61M | -1.01B | -206.92M | -293.15M | -140.03M | Financing Cash Flow |
| 551.64M | 922.30M | 26.95M | -10.12M | 150.98M |
Casella Waste Technical Analysis
Positive
109.78
Price Trends
108.86
Positive
107.69
Positive
104.67
Positive
Market Momentum
0.78
Positive
48.08
Neutral
46.09
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CWST, the sentiment is Positive. The current price of 109.78 is below the 20-day moving average (MA) of 110.95, above the 50-day MA of 108.86, and above the 200-day MA of 104.67, indicating a neutral trend. The MACD of 0.78 indicates Positive momentum. The RSI at 48.08 is Neutral, neither overbought nor oversold. The STOCH value of 46.09 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for CWST.
Casella Waste Risk Analysis
Casella Waste disclosed 23 risk factors in its most recent earnings report. Casella Waste reported the most risks in the “Production” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Casella Waste Peers Comparison
Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | $92.64B | 33.85 | 36.24% | 1.30% | 8.01% | 20.17% | |
75 Outperform | $73.62B | 36.33 | 18.61% | 0.95% | 7.13% | 18.68% | |
74 Outperform | $71.83B | 85.09 | 7.86% | 0.63% | 12.88% | -19.09% | |
70 Outperform | $10.84B | 27.25 | 16.69% | ― | 8.89% | 6.76% | |
69 Neutral | $25.94B | ― | -10.23% | 0.12% | 4.61% | -2848.30% | |
64 Neutral | $7.21B | 497.86 | 1.05% | ― | 23.15% | -50.55% | |
62 Neutral | $8.11B | 13.34 | 1.17% | 3.02% | 4.16% | -15.14% |
* Industrials Sector Average
Performance Comparison
CWST
Casella Waste
109.78
16.51
17.70%
CLH
Clean Harbors
197.53
9.39
4.99%
RSG
Republic Services
231.49
49.38
27.12%
WM
Waste Management
225.96
21.15
10.33%
TSE:WCN
Waste Connections
272.51
48.88
21.86%
TSE:GFL
GFL Environmental
65.95
19.12
40.82%
Casella Waste Earnings Call Summary
Earnings Call Date: Feb 12, 2025 | % Change Since: 2.88% | Next Earnings Date: Apr 24, 2025
Earnings Call Sentiment Positive
The earnings call reflects a positive trajectory for Casella Waste Systems, with strong acquisition-driven revenue growth, improved cash flow, and operational efficiencies in the collection and resource solutions segments. However, there are challenges related to declining landfill revenues, integration of mid-Atlantic acquisitions, and increased technology costs. Despite these challenges, the outlook remains optimistic with strategic efforts in place to address them.Highlights
Strong Acquisition Activity
In 2024, Casella Waste Systems closed eight acquisitions with over $200 million in annualized revenue. Additionally, three acquisitions were completed in early 2025 with approximately $40 million in annualized revenue.
Revenue and Profit Growth
Revenues increased by 18.9% year-over-year to $427.5 million in Q4 2024. Adjusted EBITDA grew by 15.6% to $95 million, marking three consecutive years of over 20% adjusted EBITDA growth.
Adjusted Free Cash Flow
Adjusted free cash flow increased by 23% to $158.3 million for fiscal year 2024, surpassing the high end of guidance.
Resource Solutions Growth
The recycling processing operations and national accounts business experienced a strong year, with resource solutions revenues up 9.7% year-over-year.
Collection Business Performance
The collection operations reported a year-over-year adjusted EBITDA margin expansion in the base business of over 100 basis points.
Lowlights
Landfill Revenue Decline
Landfill revenue decreased by 5% year-over-year, with volumes down 8.2% due to continued weakness in special waste, C&D, and other tons.
Challenges with Mid-Atlantic Acquisitions
Volume declines were concentrated in recently acquired businesses in the mid-Atlantic region, with a higher rate of churn as efforts were made to improve revenue quality and margins.
Technology Investment Spend
Increased investment in technology is expected to represent a headwind of approximately 10 basis points to EBITDA margins in 2025.
Ontario Landfill Closure
The Ontario County landfill is expected to close by 2028, challenging the company to find alternatives for the displaced tons.
Company Guidance
During the Casella Waste Systems Q4 2024 conference call, the company provided optimistic guidance for 2025, with expected revenue growth in the range of $1.775 to $1.805 billion, representing a 15% increase at the midpoint. Adjusted EBITDA is anticipated to grow by 16%, ranging from $410 million to $425 million. The company achieved robust performance in 2024, with over 20% growth in revenues, adjusted EBITDA, and adjusted free cash flow. In 2024, Casella completed eight acquisitions, contributing over $200 million in annualized revenue, and began 2025 with three acquisitions totaling approximately $40 million. The company plans to continue leveraging its strong pricing and operating programs while expanding its collection business, which now accounts for over 60% of consolidated revenues. Despite a challenging market for construction and demolition (C&D) and special waste volumes, Casella is focused on internalizing waste and improving operations, with expectations for modest volume growth in 2025.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.