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Republic Services (RSG)
NYSE:RSG
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Republic Services
(NYSE:RSG)
Rating:76Outperform
Price Target:―
Positive Factors
Cash Flow
Free cash flow of $724MM easily exceeded the $465MM consensus driven by better CFO and lower CapEx.
Financial Performance
RSG reported an impressive start to the year: EBITDA of $1.27bn, up 8.8% YoY on revenue growth of 3.8% YoY.
Valuation
Valuation is well-supported by business momentum, industry-leading margins, and upside risk to earnings estimates.
Negative Factors
Competitive Pressure
Core price for RSG was flat and below a peer, indicating competitive pressure.
Internal Revenue Growth
Internal revenue growth of 2.9% missed expectations due to lower-than-expected volume from weather and other factors.
Republic Services (RSG) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$78.44B
Dividend Yield0.9%
Average Volume (3M)1.35M
Price to Earnings (P/E)37.8
Beta (1Y)0.41
Revenue Growth6.13%
EPS Growth16.45%
CountryUS
Employees42,000
SectorIndustrials
Sector Strength90
IndustryWaste Management
Share Statistics
EPS (TTM)1.58
Shares Outstanding312,497,000
10 Day Avg. Volume1,386,337
30 Day Avg. Volume1,350,057
Financial Highlights & Ratios
PEG Ratio17.31
Price to Book (P/B)6.67
Price to Sales (P/S)0.00
P/FCF Ratio33.06
Enterprise Value/Market Cap1.16
Enterprise Value/Revenue1.43
Enterprise Value/Gross Profit15.42
Enterprise Value/Ebitda4.80
Forecast
1Y Price Target
$262.44Price Target Upside4.56% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering17
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 presents a robust financial profile with strong revenue growth, effective cost management, and healthy cash flow generation. The company's low leverage and high return on equity suggest prudent financial management and a solid foundation for future growth, although there is room to improve liquidity.Income Statement
Republic Services demonstrates strong income statement performance with consistent revenue growth and robust profit margins. For the TTM period ending March 2025, the company achieved a Gross Profit Margin of 50.8% and a Net Profit Margin of 12.9%. Revenue growth from the previous year was 8.2%, indicating a positive growth trajectory. The EBIT Margin was 20.2% and the EBITDA Margin was 28.3%, showcasing effective cost management and operational efficiency.85
Very Positive
Balance Sheet
The balance sheet reflects a stable financial position with a Debt-to-Equity Ratio of 0.036 for the TTM period, indicating low leverage. The Return on Equity (ROE) was 17.9%, demonstrating effective use of equity to generate profits. The Equity Ratio stood at 35.2%, showing a healthy proportion of equity financing. Although the company maintains a conservative leverage profile, the relatively low cash position may limit immediate liquidity.78
Positive
Cash Flow
Cash flow analysis reveals a solid performance with a Free Cash Flow Growth Rate of 12.9% over the previous year, reflecting strong cash generation capabilities. The Operating Cash Flow to Net Income Ratio was 1.99, indicating efficient conversion of income to cash. The Free Cash Flow to Net Income Ratio of 1.13 also supports the company's ability to generate free cash flow relative to its net income, underpinning financial flexibility.82
Very Positive
| Breakdown | |||||
| TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 16.18B | 16.03B | 14.96B | 13.51B | 11.29B | 10.15B | Gross Profit |
| 5.91B | 6.68B | 6.02B | 5.31B | 4.56B | 4.05B | EBIT |
| 3.27B | 3.20B | 2.78B | 2.39B | 2.08B | 1.71B | EBITDA |
| 4.89B | 4.77B | 4.32B | 3.66B | 3.38B | 3.00B | Net Income Common Stockholders |
| 2.08B | 2.04B | 1.73B | 1.49B | 1.29B | 967.20M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 83.00M | 74.00M | 140.00M | 143.40M | 29.00M | 38.20M | Total Assets |
| 33.10B | 32.40B | 31.41B | 29.05B | 24.95B | 23.43B | Total Debt |
| 13.53B | 12.96B | 13.07B | 11.78B | 9.55B | 8.93B | Net Debt |
| 13.45B | 12.88B | 12.93B | 11.64B | 9.53B | 8.90B | Total Liabilities |
| 21.44B | 21.00B | 20.87B | 19.36B | 15.98B | 14.95B | Stockholders Equity |
| 11.66B | 11.40B | 10.54B | 9.69B | 8.98B | 8.48B |
| Cash Flow | Free Cash Flow | ||||
| 2.35B | 2.08B | 1.99B | 1.74B | 1.47B | 1.28B | Operating Cash Flow |
| 4.15B | 3.94B | 3.62B | 3.19B | 2.79B | 2.47B | Investing Cash Flow |
| -3.17B | -2.56B | -3.67B | -4.42B | -2.47B | -1.92B | Financing Cash Flow |
| -912.80M | -1.40B | 61.90M | 1.34B | -329.20M | -612.00M |
Republic Services Technical Analysis
Positive
251.00
Price Trends
242.16
Positive
230.73
Positive
217.66
Positive
Market Momentum
2.18
Negative
58.59
Neutral
90.90
Negative
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 251 is above the 20-day moving average (MA) of 247.77, above the 50-day MA of 242.16, and above the 200-day MA of 217.66, indicating a bullish trend. The MACD of 2.18 indicates Negative momentum. The RSI at 58.59 is Neutral, neither overbought nor oversold. The STOCH value of 90.90 is Negative, 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 (64)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $12.20B | 31.55 | 16.02% | ― | 8.52% | 4.51% | |
77 Outperform | $94.12B | 35.28 | 34.01% | 1.31% | 10.77% | 8.38% | |
76 Outperform | $78.44B | 37.84 | 18.54% | 0.90% | 6.13% | 16.45% | |
68 Neutral | $7.33B | 526.68 | 1.00% | ― | 21.63% | -30.27% | |
64 Neutral | $4.39B | 11.81 | 5.17% | 249.38% | 3.98% | -12.17% |
* Industrials Sector Average
Performance Comparison
RSG
Republic Services
251.00
66.22
35.84%
CWST
Casella Waste
115.50
15.75
15.79%
CLH
Clean Harbors
226.51
8.66
3.98%
WM
Waste Management
233.32
27.49
13.36%
Republic Services Earnings Call Summary
Earnings Call Date:Apr 24, 2025
(Q1-2025)
| % Change Since: 4.25%|
Next Earnings Date:Jul 24, 2025
Earnings Call Sentiment Positive
Republic Services reported strong financial performance with solid revenue and earnings growth, margin expansion, and successful strategic acquisitions. However, the company faced challenges with volume declines and weather-related impacts affecting performance in certain segments.Q1-2025 Updates
Positive Updates
Strong Revenue and Earnings Growth
Republic Services achieved revenue growth of 4% and adjusted EBITDA growth of 9%. Adjusted earnings per share were $1.58, and adjusted free cash flow was $727 million, an increase of 36% compared to the prior year.
Margin Expansion
The company expanded its adjusted EBITDA margin by 140 basis points to 31.6%, driven by pricing ahead of inflation and cost management.
Sustainability and Innovation Initiatives
Republic Services made significant strides in sustainability with the grand opening of the Indianapolis Polymer Center and advancements in its Blue Polymers joint venture. The company is also progressing in renewable natural gas projects and fleet electrification.
Strong Customer Retention and Pricing
Customer retention rates remained strong at over 94%, and the company saw favorable trends in net promoter scores. Average yield on total revenue was 4.5%, with related revenue yield at 5.4%.
Strategic Acquisitions
Republic Services invested $826 million in strategic acquisitions, including the acquisition of Shamrock Environmental, enhancing capabilities in industrial waste and wastewater treatment services.
Negative Updates
Volume Decline
Organic volume on total revenue declined 1.2%, with specific decreases in large container volume by 3.3% and residential by 2.9%, primarily due to shedding underperforming contracts and softness in construction and manufacturing.
Impact of Severe Weather
Severe winter weather negatively impacted volume performance by $25 million to $30 million during the quarter, particularly in January and February.
Environmental Solutions Margin Pressure
Adjusted EBITDA margin in the Environmental Solutions segment decreased from 20.5% to 20.1% due to project timing and severe winter weather.
Company Guidance
During the Republic Services First Quarter 2025 Investor Conference Call, the company reported several key financial metrics, demonstrating strong performance despite challenges. The company achieved a revenue growth of 4%, adjusted EBITDA growth of 9%, and an adjusted EBITDA margin expansion of 140 basis points. Adjusted earnings per share were reported at $1.58, with an impressive $727 million in adjusted free cash flow. Organic revenue growth was driven by solid pricing, with an average yield on total revenue at 4.5% and on related revenue at 5.4%. Despite a 1.2% decline in organic volume, largely due to shedding underperforming residential contracts and softness in certain end markets, the company's customer retention rate remained robust at over 94%. The call also highlighted strong customer loyalty and favorable trends in net promoter scores, with strategic investments and acquisitions, including $826 million in strategic acquisitions, further supporting growth. The company's leverage ratio at the end of the quarter was approximately 2.6 times, with total debt at $13.4 billion and total liquidity at $2.6 billion.Republic Services Corporate Events
Executive/Board ChangesShareholder Meetings
Republic Services Holds Annual Shareholders Meeting
Neutral
May 21, 2025
On May 19, 2025, Republic Services held its Annual Meeting of Shareholders where the election of board nominees, executive compensation, and the appointment of Ernst & Young LLP as the independent auditor were approved. Despite a statute in Arizona potentially affecting voting rights for large shareholders, the outcomes of the votes were not impacted, maintaining the company’s operational and governance stability.
The most recent analyst rating on (RSG) stock is a Hold with a $208.00 price target. To see the full list of analyst forecasts on Republic Services stock, see the RSG Stock Forecast page.
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.