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Republic Services (RSG)
NYSE:RSG
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Republic Services
(NYSE:RSG)75Outperform
Positive Factors
Mergers and Acquisitions
There is an expectation to invest $1 billion in M&A in 2025, with only assumed acquisitions closed, suggesting further growth opportunities.
Sustainability Investments
Given its ongoing investments in EVs and recycling processing capabilities, RSG is anticipated to increasingly be the preferred name among sustainability-focused investors.
Negative Factors
Revenue Growth
Revenue growth is trending lower but costs are moderating too.
Republic Services (RSG) vs. S&P 500 (SPY)
Market Cap
$73.62B
Dividend Yield0.96%
Average Volume (3M)1.06M
Price to Earnings (P/E)36.3
Beta (1Y)0.52
Revenue Growth7.13%
EPS Growth18.68%
CountryUS
Employees42,000
SectorIndustrials
Sector Strength66
IndustryWaste Management
Share Statistics
EPS (TTM)6.49
Shares Outstanding312,284,940
10 Day Avg. Volume1,207,332
30 Day Avg. Volume1,061,046
Financial Highlights & Ratios
PEG Ratio1.94
Price to Book (P/B)N/A
Price to Sales (P/S)4.59
Price to Cash Flow (P/CF)18.00
P/FCF Ratio28.30
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$243.83Price Target Upside4.12% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering19
Republic Services Business Overview & Revenue Model
Company DescriptionRepublic Services, Inc. operates as a leading provider of environmental services in the United States. The company primarily focuses on the collection, transfer, recycling, and disposal of non-hazardous solid waste. Republic Services serves a diverse customer base, including residential, commercial, industrial, and municipal clients, providing essential waste management solutions that promote sustainability and environmental stewardship.
How the Company Makes MoneyRepublic Services generates revenue through several key streams, primarily centered around its waste collection and disposal services. The company earns money by charging fees for collecting waste from residential, commercial, and industrial clients. Additionally, Republic Services operates transfer stations and recycling facilities, where it processes and sells recyclable materials. Another significant revenue stream is landfill operations, where the company charges tipping fees for waste disposal. Republic Services also engages in strategic partnerships with municipalities and other organizations to manage waste services, further contributing to its earnings.
Republic Services Financial Statement Overview
Summary
Republic Services demonstrates strong financial performance with robust revenue growth, improved profitability, efficient leverage management, and solid cash flow generation. The company is well-positioned with strategic investments for future growth.Income Statement
Republic Services has demonstrated a robust financial performance with consistent revenue growth, increasing from $10.15 billion in 2020 to $16.03 billion in 2024. The gross profit margin remains strong, with marked improvements in EBIT and EBITDA margins, showcasing operational efficiency. Net profit margins have also improved, indicating enhanced profitability. The revenue growth rate is commendable, reflecting an upward trajectory.85
Very Positive
Balance Sheet
The company's balance sheet shows a healthy equity base, with stockholders' equity rising steadily. The debt-to-equity ratio has decreased over time, indicating improved leverage management. However, the equity ratio remains relatively stable, suggesting a balanced asset financing structure. The return on equity has improved, highlighting effective use of equity to generate earnings.78
Positive
Cash Flow
Cash flow statements reveal a strong free cash flow position, with positive free cash flow growth. Operating cash flow has increased, supporting the company's ability to sustain operations and fund dividends. The operating cash flow to net income ratio remains favorable, indicating efficient cash generation relative to net income. However, capital expenditures have been significant, reflecting ongoing investment in business growth.80
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 16.03B | 14.96B | 13.51B | 11.29B | 10.15B | Gross Profit |
| 6.68B | 6.02B | 5.31B | 4.56B | 4.05B | EBIT |
| 3.20B | 2.78B | 2.39B | 2.08B | 1.71B | EBITDA |
| 4.75B | 4.32B | 3.66B | 3.38B | 3.00B | Net Income Common Stockholders |
| 2.04B | 1.73B | 1.49B | 1.29B | 967.20M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 282.00M | 140.00M | 143.40M | 29.00M | 38.20M | Total Assets |
| 32.40B | 31.41B | 29.05B | 24.95B | 23.43B | Total Debt |
| 862.00M | 13.07B | 11.78B | 9.55B | 8.93B | Net Debt |
| 788.00M | 12.93B | 11.64B | 9.53B | 8.90B | Total Liabilities |
| 21.00B | 20.87B | 19.36B | 15.98B | 14.95B | Stockholders Equity |
| 11.40B | 10.54B | 9.69B | 8.98B | 8.48B |
| Cash Flow | Free Cash Flow | |||
| 2.08B | 1.99B | 1.74B | 1.47B | 1.28B | Operating Cash Flow |
| 3.94B | 3.62B | 3.19B | 2.79B | 2.47B | Investing Cash Flow |
| -2.56B | -3.67B | -4.42B | -2.47B | -1.92B | Financing Cash Flow |
| -1.40B | 61.90M | 1.34B | -329.20M | -612.00M |
Republic Services Technical Analysis
Positive
234.18
Price Trends
218.08
Positive
212.98
Positive
204.70
Positive
Market Momentum
4.75
Positive
61.41
Neutral
55.24
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For RSG, the sentiment is Positive. The current price of 234.18 is above the 20-day moving average (MA) of 230.51, above the 50-day MA of 218.08, and above the 200-day MA of 204.70, indicating a bullish trend. The MACD of 4.75 indicates Positive momentum. The RSI at 61.41 is Neutral, neither overbought nor oversold. The STOCH value of 55.24 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for RSG.
Republic Services Risk Analysis
Republic Services disclosed 33 risk factors in its most recent earnings report. Republic Services 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
Republic Services 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% | 0.96% | 7.13% | 18.68% | |
74 Outperform | $71.83B | 85.09 | 7.86% | 0.63% | 12.88% | -19.09% | |
70 Outperform | $10.89B | 26.62 | 16.69% | ― | 8.89% | 6.76% | |
64 Neutral | $7.07B | 489.65 | 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
RSG
Republic Services
234.18
52.07
28.59%
CWST
Casella Waste
112.47
19.20
20.59%
CLH
Clean Harbors
197.07
8.93
4.75%
WM
Waste Management
229.55
24.74
12.08%
TSE:WCN
Waste Connections
272.51
48.88
21.86%
Republic Services Earnings Call Summary
Earnings Call Date: Feb 13, 2025 | % Change Since: 4.32% | Next Earnings Date: Apr 30, 2025
Earnings Call Sentiment Positive
The earnings call reflects a strong financial and operational performance for Republic Services in 2024, with notable achievements in revenue growth, customer retention, and sustainability initiatives. However, challenges remain with respect to volume declines in certain segments and potential headwinds from commodity prices.Highlights
Strong Financial Performance
Republic Services achieved revenue growth of 7%, adjusted EBITDA growth of 12%, and expanded adjusted EBITDA margin by 140 basis points in 2024. Adjusted earnings per share stood at $6.46 with $2.18 billion of adjusted free cash flow.
Customer Retention and Satisfaction
The company maintained a strong customer retention rate of more than 94% and saw favorable trends in net promoter scores due to high-quality service delivery.
Technological Advancements
The implementation of EMPower, a new fleet and equipment management system, is expected to deliver $20 million in annual cost savings. Digital platforms like RISE have already generated $60 million in incremental revenue.
Sustainability Initiatives
The company’s investments in plastic circularity and renewable natural gas are progressing well, with several projects coming online and contributing to long-term value creation.
Successful Capital Allocation
In 2024, Republic Services invested $358 million in strategic acquisitions and returned $1.18 billion to shareholders, including $490 million through share repurchases.
Lowlights
Volume Decline in Certain Segments
Organic volume on total revenue declined 1.2% in Q4 2024, with softness in construction and manufacturing end markets, and shedding of underperforming residential contracts.
Commodity Price Headwinds
Recycling commodity prices are expected to pose a headwind, with current prices at $145 per ton compared to $164 for the full year 2024.
Environmental Solutions Margin Challenges
While margins improved significantly in the Environmental Solutions segment, the pace of future margin expansion is expected to slow down.
Company Guidance
In the Republic Services fourth quarter and full-year 2024 investor conference call, the company exceeded its financial guidance by achieving a 7% revenue growth, a 12% increase in adjusted EBITDA, and expanding the adjusted EBITDA margin by 140 basis points. They delivered an adjusted earnings per share (EPS) of $6.46 and generated $2.18 billion in adjusted free cash flow. For 2025, Republic Services projects revenue between $16.85 billion and $16.95 billion, adjusted EBITDA in the range of $5.275 billion to $5.325 billion, and adjusted EPS between $6.82 and $6.90. The company also anticipates adjusted free cash flow between $2.32 billion and $2.36 billion, and plans to invest at least $1 billion in acquisitions. Key metrics included a strong customer retention rate over 94%, while the fourth-quarter organic revenue growth was bolstered by a 4.4% average yield on total revenue and a 5.3% average yield on related revenue, despite a 1.2% decline in organic volume. The company continues to advance its sustainability initiatives with investments in polymer centers and renewable natural gas projects, while also making strides in fleet electrification.Republic Services Corporate Events
Business Operations and StrategyFinancial Disclosures
Republic Services Reports Strong 2024 Financial Results
Positive
Feb 13, 2025
On February 13, 2025, Republic Services reported its financial results for the fourth quarter and full year of 2024, showing a notable performance with a net income of $512 million for Q4 and $2.04 billion for the full year. The company exceeded its 2024 guidance on adjusted EBITDA, earnings per share, and free cash flow, and returned $1.18 billion to shareholders. For 2025, Republic Services projects revenue between $16.85 billion and $16.95 billion and plans to invest approximately $1 billion in acquisitions, indicating a strong outlook supported by favorable pricing, acquisitions, and sustainability investments.
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.