Waste Connections (WCN) AI Stock Analysis

• Market Cap: $71.83B
• Dividend Yield: 0.63%
• Average Volume (3M): 286.26K
• Price to Earnings (P/E): 85.1
• Beta (1Y): 0.57
• Revenue Growth: 12.88%
• EPS Growth: -19.09%
• Country: CA
• Employees: 22,539
• Sector: Industrials
• Sector Strength: 66
• Industry: Waste Management
• EPS (TTM): 3.22
• Shares Outstanding: 258,085,200
• 10 Day Avg. Volume: 284,070
• 30 Day Avg. Volume: 286,262
• PEG Ratio: 3.87
• Price to Book (P/B): N/A
• Price to Sales (P/S): 5.64
• Price to Cash Flow (P/CF): 22.10
• P/FCF Ratio: 19.30
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: C$297.30
• Price Target Upside: 7.68% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 13

Waste Connections demonstrates strong financial performance with solid cash flow and revenue growth, despite increased leverage. Technical indicators suggest a steady upward trend. However, the high P/E ratio indicates potential overvaluation, partially offset by a stable dividend yield. Recent earnings guidance is promising, although operational challenges exist.

Positive Factors

Financial Performance

Management increased FY24 guidance for the second time this year, indicating confidence in the company's performance.

Mergers and Acquisitions

A robust M&A pipeline could drive incremental upside in 2025 guidance.

Negative Factors

Financial Guidance

Initial 2025 revenue and EBITDA guidance appeared to underwhelm investors, indicating some disappointment in the market.

Waste Connections Business Overview & Revenue Model

Company Description

Waste Connections, Inc. is an integrated solid waste management services company. It provides waste collection, waste disposal, transfer, and recycling services in the US and Canada.

How the Company Makes Money

Waste Connections makes money through several key revenue streams. The primary source of revenue comes from its solid waste collection services, which include residential subscriptions, municipal contracts, and commercial waste collection. The company also generates income from its transfer and disposal operations, where collected waste is transported to landfills and other disposal sites managed by Waste Connections. Recycling and resource recovery programs contribute additional revenue by processing and selling recyclable materials. Furthermore, the company engages in strategic acquisitions to expand its service areas and enhance operational efficiencies, thereby boosting revenue growth. Significant partnerships with municipalities and other organizations also play a crucial role in securing long-term contracts and sustaining revenue streams.

Waste Connections Financial Statement Overview

Summary

Waste Connections shows strong revenue growth and healthy profit margins. While there is an increase in leverage, the company maintains a robust financial profile with solid cash flow generation and a stable balance sheet.

Income Statement

Waste Connections demonstrates strong revenue and profit growth with a revenue increase from $5.45 billion in 2020 to $8.92 billion in 2024. The gross profit margin remains healthy, consistently above 40%, indicating effective cost management. The net profit margin, although slightly reduced over the years, remains robust. Despite a slight drop in EBIT margin from 15.5% in 2020 to 12.0% in 2024, the company maintains a strong EBITDA margin, indicating stable operational efficiency.

Balance Sheet

The balance sheet shows a moderate increase in total assets and equity over the years, with total assets growing from $13.99 billion in 2020 to $19.82 billion in 2024. The debt-to-equity ratio has increased due to rising total debt, indicating higher leverage, which could pose risks. However, the equity ratio remains stable, suggesting a solid financial foundation. Return on equity is positive, reflecting efficient use of equity.

Cash Flow

Operating cash flow has shown consistent growth, supporting the company’s ability to generate cash from operations. Free cash flow has also grown, though at a slower rate, reflecting significant capital expenditures. The operating cash flow to net income ratio is strong, indicating good cash generation relative to net income. The free cash flow to net income ratio remains stable, highlighting effective cash management.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
8.92B	8.02B	7.21B	6.15B	5.45B
	Gross Profit
3.73B	3.28B	2.88B	2.50B	2.17B
	EBIT
1.07B	1.24B	1.24B	1.04B	883.01M
	EBITDA
2.25B	2.26B	2.17B	1.89B	1.17B
	Net Income Common Stockholders
617.57M	762.80M	835.66M	618.05M	204.68M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
62.37M	78.40M	78.64M	147.44M	617.29M
	Total Assets
19.82B	17.92B	17.13B	14.70B	13.99B
	Total Debt
8.39B	7.02B	7.10B	5.21B	4.89B
	Net Debt
8.33B	6.94B	7.02B	5.07B	4.28B
	Total Liabilities
11.96B	10.22B	10.02B	7.71B	7.13B
	Stockholders Equity
7.86B	7.69B	7.11B	6.99B	6.86B
Cash Flow		Free Cash Flow
1.17B	1.19B	1.11B	953.91M	743.96M
	Operating Cash Flow
2.23B	2.13B	2.02B	1.70B	1.41B
	Investing Cash Flow
-3.16B	-1.58B	-3.09B	-1.69B	-1.05B
	Financing Cash Flow
944.95M	-544.40M	1.03B	-499.50M	-78.22M

Waste Connections Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 276.11
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:WCN, the sentiment is Positive. The current price of 276.11 is above the 20-day moving average (MA) of 269.80, above the 50-day MA of 260.25, and above the 200-day MA of 249.47, indicating a bullish trend. The MACD of 3.38 indicates Negative momentum. The RSI at 66.08 is Neutral, neither overbought nor oversold. The STOCH value of 88.63 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:WCN.

Waste Connections Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
WCN	74 Outperform	$71.83B	85.09	7.86%	0.63%	12.88%	-19.09%
Sector *	62 Neutral	$8.11B	13.34	1.17%	3.02%	4.16%	-15.14%
WM	44 Neutral	C$65.99M	―	-3.77%	―	―	72.77%

Waste Connections Corporate Events

Waste Connections Declares Quarterly Dividend with Future Growth Focus

Waste Connections, Inc. has announced a regular quarterly cash dividend of $0.315 per common share, payable on March 13, 2025. The board plans to review the dividend annually with the intent to increase it over time. The dividend will be paid in U.S. dollars or Canadian dollars depending on the shareholder’s residency and the depository they use. This announcement underscores Waste Connections’ commitment to returning value to shareholders while maintaining its focus on long-term growth and sustainability initiatives, which are integral to its business operations.

Waste Connections Announces Robust 2024 Results and Optimistic 2025 Outlook

Waste Connections, Inc. reported strong financial results for the fourth quarter and full year 2024, with significant revenue growth and improved operating trends. The company achieved a record year of acquisitions, contributing approximately $750 million in annualized revenue. Looking ahead to 2025, Waste Connections anticipates further growth, projecting revenue between $9.45 billion and $9.60 billion, with an emphasis on organic growth and continued acquisition activity. The company’s strategic focus on human capital has led to improved employee retention, setting the stage for continued expansion in operating margins.

Waste Connections Sets Dates for Q4 2024 Earnings Release and 2025 Outlook

Waste Connections announced the release dates for its fourth quarter 2024 earnings and 2025 outlook, set for February 12, 2025. An investor conference call will follow on February 13. The announcement signals the company’s ongoing commitment to engaging with investors and stakeholders, providing transparency in its financial performance and future direction. This move is likely to reinforce Waste Connections’ positioning in the waste services industry by highlighting its operational strategies and financial health.