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Casella Waste Systems (CWST)
NASDAQ:CWST
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Casella Waste
(NASDAQ:CWST)
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Rating:52Neutral
Price Target:
$96.00
▲(4.20% Upside)
Action:ReiteratedDate:02/23/26
The score is held back most by very weak valuation (extremely high P/E) and bearish technicals (below key moving averages with negative MACD). Financial performance is mixed—good cash generation and revenue growth but pressured profitability and some latest-period data-quality flags—partly offset by a generally positive earnings-call outlook with 2026 growth and modest margin improvement implied.
Positive Factors
Consistent revenue and cash growth
Casella shows durable top-line expansion and rising free cash flow across multiple years, indicating growing core demand and repeatable cash generation. Persistent revenue and FCF growth supports reinvestment, funding of capex/M&A, and strengthens operational resilience over the next 2–6 months.
Active, accretive M&A pipeline
A steady cadence of acquisitions expands regional scale and service footprint, adding revenue and potential synergies. A large disclosed pipeline signals a structural growth lever that can raise market share and network efficiency over time if integration remains disciplined.
Healthy liquidity and financing capacity
Modest net leverage and a large undrawn revolver provide durable financial flexibility to fund organic growth, targeted acquisitions, and planned capex without immediate refinancing stress. This balance of liquidity and debt capacity underpins strategic optionality over the medium term.
Negative Factors
Sustained margin compression and data inconsistency
Despite revenue gains, profitability has deteriorated and reported 2025 margin fields contain inconsistencies, reducing confidence in earnings quality. Persistent margin pressure erodes returns on invested capital and limits the firm’s ability to convert growth into lasting shareholder value over the medium term.
Recycling commodity-price weakness
Large declines in commodity prices structurally reduce recoveries from the recycling segment and increase earnings volatility. Even with contractual protections, prolonged weak commodity markets can compress segment margins and limit cash generation from processing operations.
High capital intensity and closure-related costs
Elevated and rising capex needs, plus site closures and transition costs, require significant cash deployment and operational execution. High capital intensity reduces free cash flow conversion and raises execution risk, pressuring sustainable margin and return metrics over the coming cycles.
Casella Waste (CWST) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$5.84B
Dividend YieldN/A
Average Volume (3M)636.51K
Price to Earnings (P/E)721.4
Beta (1Y)0.23
Revenue Growth20.54%
EPS Growth106.35%
CountryUS
Employees5,100
SectorIndustrials
Sector Strength72
IndustryWaste Management
Share Statistics
EPS (TTM)0.30
Shares Outstanding62,526,566
10 Day Avg. Volume816,515
30 Day Avg. Volume636,512
Financial Highlights & Ratios
PEG Ratio-16.51
Price to Book (P/B)3.96
Price to Sales (P/S)3.38
P/FCF Ratio73.38
Enterprise Value/Market Cap1.19
Enterprise Value/Revenue3.78
Enterprise Value/Gross Profit22.17
Enterprise Value/Ebitda17.20
Forecast
1Y Price Target
$112.67Price Target Upside22.29% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering9
EPS Forecast (FY)1.34
Revenue Forecast (FY)$1.98B
Casella Waste Business Overview & Revenue Model
Company DescriptionCasella Waste Systems, Inc., together with its subsidiaries, operates as a vertically integrated solid waste services company in the northeastern United States. It offers resource management services primarily in the areas of solid waste collection and disposal, transfer, recycling, and organics services to residential, commercial, municipal, institutional, and industrial customers. The company provides a range of non-hazardous solid waste services, including collections, transfer stations, and disposal facilities. It also markets recyclable metals, aluminum, plastics, and paper and corrugated cardboard that are processed at its facilities, as well as recyclables purchased from third parties. In addition, the company is involved in commodity brokerage operations. As of January 31, 2022, it owned and/or operated 50 solid waste collection operations, 65 transfer stations, 23 recycling facilities, 8 Subtitle D landfills, 3 landfill gas-to-energy facilities, and 1 landfill permitted to accept construction and demolition materials. Casella Waste Systems, Inc. was founded in 1975 and is headquartered in Rutland, Vermont.
How the Company Makes MoneyCasella Waste generates revenue through multiple streams, primarily from its waste collection, recycling, and disposal operations. The company charges fees for its collection services based on the volume and type of waste generated by its customers, which include residential households, commercial businesses, and industrial clients. Additionally, revenue is derived from tipping fees charged at its landfills for waste disposal, as well as from the sale of recyclable materials processed at its recycling facilities. The company also benefits from long-term contracts with municipalities and businesses, providing a stable revenue base. Strategic partnerships with local governments and businesses enhance its market presence and contribute to earnings, alongside investments in technology and infrastructure aimed at improving operational efficiency and sustainability.
Casella Waste Earnings Call Summary
Earnings Call Date:Feb 19, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Apr 23, 2026
Earnings Call Sentiment Positive
The call conveys a constructive outlook: strong fiscal 2025 growth in revenue, EBITDA and free cash flow, margin expansion in the base business, a robust M&A pipeline and ample liquidity. Near-term headwinds include recycling commodity weakness, certain third-party volume declines, one-time closure costs and short-term integration/G&A investment that dilute margins. Management communicated confidence in operational improvements, automation savings (> $5M in 2026), permit/expansion progress and multi-year G&A leverage benefits expected to start in 2027.Q4-2025 Updates
Positive Updates
Strong Full-Year Growth Across Key Financial Metrics
Fiscal 2025 revenues +18% year-over-year, Adjusted EBITDA +17% year-over-year, and adjusted free cash flow +14% year-over-year; marks fifth consecutive year of double-digit growth across these three metrics.
Fourth Quarter Revenue and EBITDA Improvement
Q4 revenues $469.1M, up $41.6M or +9.7% year-over-year (including $23.1M from acquisitions and $18.5M same-store growth or 4.3%); Q4 Adjusted EBITDA $107M, up $12M or +12.7% year-over-year; adjusted EBITDA margin 22.8%, up ~60 basis points year-over-year.
Margin Expansion in Base Business
Adjusted EBITDA margins excluding acquisitions expanded 55 basis points year-over-year; base collection and disposal margins (excluding acquisition impacts) increased 170 basis points year-over-year driven by disciplined pricing, higher landfill volumes (internalization) and operational efficiencies.
Active and Accretive M&A Pipeline
Completed 9 acquisitions in 2025 adding over $115M of annualized revenue; closed Mountain State Waste on Jan 1, 2026 (~$30M annualized revenue); acquisition pipeline described as robust with opportunities >$500M of annualized revenues.
Healthy Balance Sheet and Liquidity
Consolidated net leverage ~2.3x (2.34x covenant basis), $1.17B debt, $124M cash, and over $700M revolver availability (undrawn) to fund growth and M&A.
Operational Investments and Expected Near-Term Savings
Received 40 automated trucks and expect associated labor efficiencies, route optimization and on-street changes to generate >$5M of savings in 2026; McKean landfill rail upgrade on track for Q2 2026 to expand rail-handling capability.
Resource Solutions Resilience and Risk Management
Resource Solutions revenues +9.1% and segment adjusted EBITDA +9.6% for the year; commodity price weakness partially mitigated by contract structures that offset ~80% of commodity downside risk and limited the revenue impact of lower commodity prices to under $1M in the quarter.
2026 Financial Guidance Reflects Continued Growth
Guidance for 2026: revenue $1.97B–$1.99B (~8% growth at midpoint), Adjusted EBITDA $455M–$465M (~9% growth at midpoint), adjusted free cash flow $195M–$205M (~11% growth at midpoint); guidance assumes $60M of acquired revenue and ~4.5% organic growth at midpoint.
Negative Updates
Commodity Price Pressure in Recycling
Average recycled commodity revenue per ton down ~27% year-over-year; recycled commodity prices trading roughly 20% below 10-year averages, pressuring recycling/processing revenue despite contract protections.
Third-Party Volume Declines in Certain Lines
Q4 solid waste volume down 1.1% year-over-year, with disposal third-party volume down 4.5% and roll-off down 5.2%; reported third-party volume decline partially reflects internalization of tons (landfill tons overall up 1.7%).
Short-Term EBITDA Dilution from Acquisitions and Integration
Acquisitions completed in the past 12 months contributed at lower initial EBITDA margins, diluting consolidated margins by ~40 basis points in Q4; incremental G&A and systems investment causing temporary doubled-up costs during integration.
Closure and Transition Costs (Non-EBITDA Impact)
Accrual recorded and additional closure costs related to Hawk Ridge Organics facility in Maine with ~ $3M of additional costs expected in 2026 (excluded from Adjusted EBITDA); results in redirection of organics primarily to landfills.
Capital Intensity and Elevated Near-Term CapEx
Capital expenditures $245.1M in 2025, up $41.8M year-over-year, including ~$66M of upfront acquisition-related spend; 2026 capex guidance ~ $260M (including ~$65M of upfront acquisition spend).
Weather and Operational Headwinds in Early 2026
Severe winter (snowfall ~+10% vs 10-year averages; temperatures ~20% below 10-year averages) created operational challenges and modest January shortfall in productivity; management expects weather headwinds but remains confident in annual outlook.
Site Ramp-Down and Closure Timing Risks
Ramping down volumes at North Country landfill ahead of anticipated closure (cited as end of next year) and known Ontario County landfill closure at end of 2028 require capacity planning; potential short-term volume/mix headwinds though management expects to redeploy tons to Hyland expansion and other sites to preserve returns.
Company Guidance
The company provided 2026 financial guidance of revenue $1.97–$1.99 billion (≈8% growth at the midpoint), adjusted EBITDA $455–$465 million (≈9% growth at the midpoint) and adjusted free cash flow $195–$205 million (≈11% growth at the midpoint); the plan assumes ~ $60 million of revenue from acquisitions to date (≈3% of growth, including Mountain State Waste closed Jan 1) and ~4.5% organic growth at the midpoint, with solid waste pricing planned at ~5% and volumes roughly flat (±); management said the bridge from 2025 to guidance includes $10–$15 million from acquisitions and ≈$25 million (≈6%) of base organic EBITDA growth, the guidance implies approximately flat margins to +40 basis points of margin improvement (largely base business), assumes a stable economic environment and no further acquisitions, and reflects expected capital expenditures of about $260 million (including ≈$65 million of upfront acquisition spend and a small remaining McKean rail investment).Casella Waste Financial Statement Overview
Summary
Solid and improving operating/free cash flow alongside consistent revenue growth, but materially compressed profitability in 2024–2025 and data-consistency issues in 2025 (e.g., anomalous balance sheet/gross profit fields) reduce confidence in the latest-period fundamentals.Income Statement
Revenue has grown consistently from 2020 to 2025, with especially strong growth in 2025 versus 2024. However, profitability has weakened materially: net margin declined steadily from 2020 levels to very low levels in 2024 and 2025, and operating profitability (as reflected in EBIT/EBITDA trends) has been choppy despite revenue growth. 2025 also shows missing/zero gross profit and margin fields, which reduces confidence in the quality of the margin picture for that year.58
Neutral
Balance Sheet
Leverage improved versus the more debt-heavy 2020–2023 period (debt-to-equity moved down sharply in 2024). That said, 2025 balance sheet inputs look inconsistent (equity is extraordinarily high relative to assets and debt), which makes leverage and returns hard to interpret for the latest period. Historically, returns on equity have fallen meaningfully from 2020–2022 to low levels in 2023–2024, pointing to weaker profitability relative to the capital base.52
Neutral
Cash Flow
Cash generation is a relative strength: operating cash flow has trended up over time and remained solid in 2024–2025, and free cash flow is consistently positive with strong growth reported in 2025. A key watch-out is conversion versus earnings—free cash flow is only a fraction of net income in each year shown, implying heavier reinvestment and/or working-capital needs. Operating cash flow relative to net income is around ~0.8–1.2 across years, indicating generally reasonable (but not consistently strong) cash earnings quality.66
Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 1.84B | 1.56B | 1.26B | 1.09B | 889.21M |
| Gross Profit | 313.40M | 295.04M | 261.80M | 235.62M | 203.22M |
| EBITDA | 393.60M | 321.52M | 274.17M | 248.29M | 208.78M |
| Net Income | 7.87M | 13.54M | 25.40M | 53.08M | 41.10M |
Balance Sheet | |||||
| Total Assets | 3.30B | 3.33B | 2.54B | 1.45B | 1.28B |
| Cash, Cash Equivalents and Short-Term Investments | 123.77M | 383.30M | 220.91M | 71.15M | 33.81M |
| Total Debt | 1.31B | 1.21B | 1.12B | 665.33M | 616.09M |
| Total Liabilities | 1.73B | 1.78B | 1.51B | 951.32M | 861.12M |
| Stockholders Equity | 1.57B | 1.55B | 1.02B | 497.90M | 422.46M |
Cash Flow | |||||
| Free Cash Flow | 84.70M | 78.13M | 78.19M | 86.35M | 59.44M |
| Operating Cash Flow | 329.78M | 281.36M | 233.09M | 217.31M | 182.74M |
| Investing Cash Flow | -469.15M | -670.61M | -1.01B | -206.92M | -293.15M |
| Financing Cash Flow | -27.07M | 551.64M | 922.30M | 26.95M | -10.12M |
Casella Waste Technical Analysis
Negative
92.13
Price Trends
101.33
Negative
96.26
Negative
100.96
Negative
Market Momentum
-2.67
Positive
34.33
Neutral
9.49
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CWST, the sentiment is Negative. The current price of 92.13 is below the 20-day moving average (MA) of 100.66, below the 50-day MA of 101.33, and below the 200-day MA of 100.96, indicating a bearish trend. The MACD of -2.67 indicates Positive momentum. The RSI at 34.33 is Neutral, neither overbought nor oversold. The STOCH value of 9.49 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | $92.60B | 34.27 | 29.69% | 1.50% | 15.88% | -3.11% | |
74 Outperform | $15.06B | 39.29 | 14.70% | ― | 2.85% | -6.27% | |
74 Outperform | $799.34M | -24.77 | -0.17% | ― | 22.77% | 44.73% | |
72 Outperform | $68.17B | 32.21 | 18.31% | 1.11% | 4.33% | 7.59% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
52 Neutral | $5.84B | 721.38 | 0.50% | ― | 20.54% | 106.35% | |
45 Neutral | $1.45B | -8.45 | -38.53% | ― | -2.91% | -67.18% |
* Industrials Sector Average
CWST
Casella Waste
93.16
-18.86
-16.84%
CLH
Clean Harbors
293.20
79.65
37.30%
NVRI
Enviri
18.93
12.43
191.23%
RSG
Republic Services
229.00
-5.55
-2.37%
WM
Waste Management
240.84
11.47
5.00%
MEG
Montrose Environmental Group
29.22
9.79
50.39%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.