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Casella Waste Systems (CWST)
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Casella Waste (CWST) AI Stock Analysis

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CWST

Casella Waste

(NASDAQ:CWST)

Rating:72Outperform
Price Target:
$128.00
▲(17.66%Upside)
Casella Waste's strong financial performance and promising earnings call drive its positive outlook, despite challenges in valuation due to an excessively high P/E ratio. Technical indicators suggest neutral momentum, but the company's strategic M&A activities and operational efficiency position it well for future growth.
Positive Factors
Financial Performance
Casella is off to a strong start in 2025 with revenues and EBITDA increasing more than 20% year over year, indicating positive growth momentum.
Geographic Expansion
Extending Casella's geographic footprint into new states suggests potential growth and increased market share.
Negative Factors
Organic Growth Concerns
M&A accounts for 11% of the 15% top line growth, indicating that organic growth in the solid waste business is limited to only 2%.
Volume Challenges
First-quarter volumes were negatively impacted by soft cyclical roll-off volumes and challenging winter weather, presenting a potential risk to performance.

Casella Waste (CWST) vs. SPDR S&P 500 ETF (SPY)

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 Systems primarily generates revenue through its comprehensive waste management services. The key revenue streams include collection services, where the company charges fees for picking up waste and recyclables from residential, commercial, and industrial customers. Another significant revenue stream is disposal, which involves tipping fees collected at landfills and transfer stations owned or operated by Casella. Additionally, the company earns from recycling services by processing and selling recyclable materials. Partnerships with municipalities and businesses, along with long-term contracts, contribute to stable revenue generation, while Casella's focus on sustainability and resource management enhances its competitive advantage in the waste services sector.

Casella Waste Earnings Call Summary

Earnings Call Date:May 01, 2025
(Q1-2025)
|
% Change Since: -7.28%|
Next Earnings Date:Jul 31, 2025
Earnings Call Sentiment Positive
The call reflected a strong start to the fiscal year with record performance in revenue and EBITDA, and successful M&A activity. However, challenges such as weather-related impacts and roll-off volume weakness were noted, balanced by positive pricing strategies and landfill growth.
Q1-2025 Updates
Positive Updates
Record First Quarter Performance
Revenues, adjusted EBITDA, and adjusted free cash flow all increased over 20% year-over-year, setting records for the first quarter.
Landfill Segment Growth
Reported organic growth exceeding 7% in the landfill business, with prices up 3.3% and tons up 3.9% year-over-year.
Resource Solutions Success
Resource Solutions' revenues increased by 9.5% year-over-year with strong organic growth of over 10% in National Accounts.
Strong M&A Activity
Closed four deals year-to-date with approximately $50 million in annualized revenues and an active M&A pipeline of over $500 million.
Solid Waste Pricing Momentum
Solid Waste pricing was up 5.8%, more than offsetting a volume decrease of 1.7%, leading to a 140 basis point margin expansion.
Negative Updates
Weather-Related Challenges
Challenging winter conditions in the Northeast led to slower roll-off volumes and softness in third-party transfer station volumes.
Roll-off Volume Weakness
Experienced softness in the roll-off line of business, attributed in part to a challenging winter and slower economic activity.
Stock-Based Compensation Expense Impact
An adjustment to long-term stock-based compensation expense impacted EBITDA by $2.6 million, representing about 60 basis points of margin headwind.
Company Guidance
During the first quarter of fiscal year 2025, Casella Waste Systems reported a strong performance with revenues reaching $417.1 million, marking a 22.3% increase year-over-year. The company achieved a 21.7% growth in adjusted EBITDA to $86.4 million, while adjusted free cash flow set a record at $29.1 million. The solid waste segment saw a 5.6% rise in pricing, offsetting a 1.7% drop in volumes, while landfill operations experienced organic growth exceeding 7% with revenue from price increases and volume gains. Resource Solutions also performed well, benefiting from over 10% organic growth in the National Accounts business. Casella completed four acquisitions in the year-to-date, contributing approximately $50 million in annualized revenues, and maintained a robust M&A pipeline valued at over $500 million. The company reaffirmed its 2025 financial guidance, bolstered by a strong balance sheet with $900 million in liquidity, positioning it to capitalize on future growth opportunities amid a challenging macroeconomic environment.

Casella Waste Financial Statement Overview

Summary
Casella Waste exhibits strong revenue growth and cash flow generation, supported by a stable balance sheet with low leverage. The company is financially stable with a solid equity base, though profitability pressures are evident in the low net profit margin and ROE. The company maintains strong operational efficiency and cash flow generation, positioning it well for future growth, albeit with some cost management challenges.
Income Statement
75
Positive
Casella Waste exhibits strong revenue growth, with a notable increase from $1.55 billion in 2024 to $1.63 billion in TTM. The gross profit margin is robust at 44.21% for TTM, while the net profit margin stands at a modest 0.79%, reflecting challenges in controlling costs or expenses. EBIT and EBITDA margins are relatively stable, indicating operational efficiency. However, the slight decline in net income from 2023 to TTM suggests potential profitability pressure.
Balance Sheet
70
Positive
The company's balance sheet is marked by a low debt-to-equity ratio of 0.07 in TTM, indicating low leverage and financial stability. The equity ratio of 48.26% suggests a solid equity base relative to total assets, while ROE is low at 0.83%, reflecting moderate efficiency in generating returns on equity investments. A potential risk is the high total liabilities compared to stockholders' equity, indicating heavy reliance on liabilities.
Cash Flow
78
Positive
Casella Waste demonstrates healthy cash flow generation, with an operating cash flow to net income ratio of 25.21 in TTM, illustrating strong cash generation relative to net income. The free cash flow to net income ratio is 7.40, emphasizing sufficient free cash flow. The free cash flow growth rate from 2024 to TTM is 22.11%, indicating positive cash flow trends, though capital expenditures remain significant.
BreakdownDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue1.56B1.26B1.09B889.21M774.58M
Gross Profit529.95M261.80M361.97M306.81M258.94M
EBITDA318.37M274.17M248.29M208.78M151.46M
Net Income13.54M25.40M53.08M41.10M91.11M
Balance Sheet
Total Assets3.23B2.54B1.45B1.28B1.19B
Cash, Cash Equivalents and Short-Term Investments383.30M220.91M71.15M33.81M154.34M
Total Debt1.21B1.12B658.33M616.09M609.18M
Total Liabilities1.68B1.51B951.32M861.12M831.76M
Stockholders Equity1.55T1.02B497.90M422.46M362.14M
Cash Flow
Free Cash Flow77.85M78.19M86.35M59.44M31.81M
Operating Cash Flow281.36M233.09M217.31M182.74M139.92M
Investing Cash Flow-670.61M-1.01B-206.92M-293.15M-140.03M
Financing Cash Flow551.64M922.30M26.95M-10.12M150.98M

Casella Waste Technical Analysis

Technical Analysis Sentiment
Negative
Last Price108.79
Price Trends
50DMA
114.17
Negative
100DMA
113.58
Negative
200DMA
110.36
Negative
Market Momentum
MACD
-1.96
Positive
RSI
39.60
Neutral
STOCH
29.08
Neutral
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 108.79 is below the 20-day moving average (MA) of 111.43, below the 50-day MA of 114.17, and below the 200-day MA of 110.36, indicating a bearish trend. The MACD of -1.96 indicates Positive momentum. The RSI at 39.60 is Neutral, neither overbought nor oversold. The STOCH value of 29.08 is Neutral, 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

Overall Rating
UnderperformOutperform
Sector (65)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
78
Outperform
$12.32B31.8516.02%8.52%4.51%
76
Outperform
$92.80B34.4134.01%1.37%10.77%8.38%
74
Outperform
$76.60B36.6818.54%0.95%6.13%16.45%
72
Outperform
$6.90B496.081.00%21.63%-30.27%
68
Neutral
$791.08M-14.32%10.92%-57.13%
65
Neutral
$11.06B15.735.16%1.93%3.12%-25.59%
56
Neutral
$764.72M-26.25%5.42%-29.97%
* Industrials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
CWST
Casella Waste
108.79
6.87
6.74%
CLH
Clean Harbors
230.93
7.30
3.26%
NVRI
Enviri
9.37
-1.81
-16.19%
RSG
Republic Services
245.11
56.80
30.16%
WM
Waste Management
230.61
36.41
18.75%
MEG
Montrose Environmental Group
23.12
-8.55
-27.00%

Casella Waste Corporate Events

Private Placements and FinancingBusiness Operations and Strategy
Casella Waste Announces Bond Remarketing Initiative
Neutral
Jul 17, 2025

On July 17, 2025, Casella Waste Systems announced the commencement of remarketing $29.0 million of its Solid Waste Disposal Revenue Bonds, originally issued by the Finance Authority of Maine. The remarketing, set for August 1, 2025, involves a mandatory tender and a new interest rate period for the bonds, which are guaranteed by Casella’s subsidiaries. This move reflects Casella’s strategic financial management, impacting its debt structure and offering potential implications for institutional investors.

The most recent analyst rating on (CWST) stock is a Buy with a $129.00 price target. To see the full list of analyst forecasts on Casella Waste stock, see the CWST Stock Forecast page.

Executive/Board ChangesShareholder Meetings
Casella Waste Elects Directors and Approves Compensation
Neutral
Jun 6, 2025

At the 2025 Annual Meeting of Stockholders held on June 5, 2025, Casella Waste Systems, Inc. elected three Class I directors, approved executive compensation, and ratified the appointment of RSM US LLP as independent auditors for the fiscal year ending December 31, 2025. The election and approvals reflect the company’s ongoing governance and operational strategies, impacting its leadership structure and financial oversight, which are crucial for maintaining stakeholder confidence and supporting its market position.

The most recent analyst rating on (CWST) stock is a Buy with a $135.00 price target. To see the full list of analyst forecasts on Casella Waste stock, see the CWST Stock Forecast page.

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.Date of analysis: Jun 28, 2025