Quarterly earnings results are a good time to check in on a company’s progress, especially compared to its peers in the same sector. Today we are looking at Enviri (NYSE:NVRI) and the best and worst performers in the waste management industry.
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 slower Q2. As a group, revenues missed analysts’ consensus estimates by 1.9%.
After much suspense, the Federal Reserve cut its policy rate by 50bps (half a percent) in September 2024. This marks the central bank’s first easing of monetary policy since 2020 and the end of its most pointed inflation-busting campaign since the 1980s. Inflation had begun to run hot in 2021 post-COVID due to a confluence of factors such as supply chain disruptions, labor shortages, and stimulus spending. While CPI (inflation) readings have been supportive lately, employment measures have prompted some concern. Going forward, the markets will debate whether this rate cut (and more potential ones in 2024 and 2025) is perfect timing to support the economy or a bit too late for a macro that has already cooled too much.
In light of this news, waste management stocks have held steady with share prices up 3.2% on average since the latest earnings results.
Weakest Q2: 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 $610 million, flat year on year. This print fell short of analysts’ expectations by 1.1%. Overall, it was a disappointing quarter for the company with a miss of analysts’ EBITDA and earnings estimates.
“Enviri again delivered growth and favorable quarterly results supported by consistent execution in each of our three business units,” said Enviri Chairman and CEO Nick Grasberger.
Enviri Total Revenue
Unsurprisingly, the stock is down 16.4% since reporting and currently trades at $9.89.
Established in 1980, Clean Harbors (NYSE:CLH) provides environmental and industrial services like hazardous and non-hazardous waste disposal and emergency spill cleanups.
Clean Harbors reported revenues of $1.55 billion, up 11.1% year on year, outperforming analysts’ expectations by 1.5%. The business had a very strong quarter with an impressive beat of analysts’ operating margin estimates and a solid beat of analysts’ EBITDA estimates.
Clean Harbors Total Revenue
Clean Harbors scored the biggest analyst estimates beat among its peers. The market seems happy with the results as the stock is up 14.4% since reporting. It currently trades at $256.73.
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 $73.15 million, down 1.8% year on year, falling short of analysts’ expectations by 4.6%. It was a softer quarter as it posted a miss of analysts’ earnings estimates.
As expected, the stock is down 6.1% since the results and currently trades at $7.83.
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 $377.2 million, up 30.2% year on year. This number surpassed analysts’ expectations by 1.2%. Zooming out, it was a mixed quarter as it recorded a miss of analysts’ operating margin estimates.
Casella Waste Systems pulled off the fastest revenue growth and highest full-year guidance raise among its peers. The stock is flat since reporting and currently trades at $103.14.
Founded to protect a tree-lined two-lane road, Montrose (NYSE:MEG) provides air quality monitoring, environmental laboratory testing, compliance, and environmental consulting services.
Montrose reported revenues of $173.3 million, up 8.9% year on year. This print met analysts’ expectations. Zooming out, it was a mixed quarter as it also logged an impressive beat of analysts’ operating margin estimates but a miss of analysts’ earnings estimates.
The stock is down 7.9% since reporting and currently trades at $26.95.
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