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Republic Services (RSG)
NYSE:RSG

Republic Services (RSG) AI Stock Analysis

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Republic Services

(NYSE:RSG)

Rating:70Outperform
Price Target:
$261.00
▲(8.24%Upside)
Republic Services presents a robust financial profile with strong revenue growth and efficient operations, significantly contributing to the overall score. The earnings call further supports the company's positive outlook with strategic growth initiatives. However, bearish technical indicators and a high valuation relative to peers weigh down the score.
Positive Factors
Acquisitions
RSG's active involvement in M&A within recycling, waste, and Environmental Solutions is seen as an attractive opportunity for upside growth.
Cost Savings
The company expects to save $20-25 million annually through the MPower system by enhancing warranty recovery and technician efficiency.
Digital Investments
Digital investments are driving internal efficiencies, with platforms like the RISE dispatch and in-cab technology contributing to significant productivity gains.
Negative Factors
Economic Environment
RSG is positioned to benefit from a rebounding industrial/manufacturing backdrop and ongoing margin expansion opportunities.
Market Performance
Despite the weak start to the year, Republic did not back away from the ES annual margin improvement target of 75-100 bps.
Valuation Concerns
The stock has materially outperformed peers YTD (+21% vs. +11%) and valuation is at a 20-yr high.

Republic Services (RSG) vs. SPDR S&P 500 ETF (SPY)

Republic Services Business Overview & Revenue Model

Company DescriptionRepublic Services, Inc., together with its subsidiaries, offers environmental services in the United States. The company offers collection and processing of recyclable materials, collection, transfer and disposal of non-hazardous solid waste, and other environmental solutions. Its collection services include curbside collection of material for transport to transfer stations, landfills, or recycling processing centers; supply of recycling and waste containers; and renting of compactors. In addition, the company engages in the processing and sale of old corrugated containers, old newsprint, aluminum, glass, and other materials; and provision of landfill and transfer services. Further, it offers disposal of non-hazardous solid and liquid material and in-plant services, such as transportation and logistics. It serves small-container, large-container, and residential customers. As of December 31, 2021, the company operated through 356 collection operations, 239 transfer stations, 198 active landfills, 71 recycling processing centers, 6 saltwater disposal wells, and 7 deep injection wells, as well as 3 treatment, recovery, and disposal facilities in 41 states. It also operated 77 landfill gas-to-energy and renewable energy projects and had 124 closed landfills. The company was incorporated in 1996 and is based in Phoenix, Arizona.
How the Company Makes MoneyRepublic Services generates revenue primarily through its solid waste collection and disposal services. The company charges fees for collecting and transporting waste from residential, commercial, and industrial customers to landfills or recycling facilities. Republic Services also earns money through landfill operations by charging tipping fees for waste disposal. Additionally, the company generates income from its recycling services, where it processes and sells recycled materials. Another revenue stream comes from energy services, where Republic Services captures landfill gas and converts it into energy, which is then sold to third parties. Key factors influencing its earnings include long-term contracts with municipalities and businesses, strategic acquisitions, and investments in technology to enhance operational efficiency.

Republic Services Earnings Call Summary

Earnings Call Date:Apr 24, 2025
(Q1-2025)
|
% Change Since: 0.40%|
Next Earnings Date:Jul 29, 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 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
85
Very Positive
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.
Balance Sheet
78
Positive
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.
Cash Flow
82
Very Positive
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.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue16.18B16.03B14.96B13.51B11.29B10.15B
Gross Profit5.91B6.68B6.02B5.31B4.56B4.05B
EBITDA4.89B4.77B4.32B3.66B3.38B3.00B
Net Income2.08B2.04B1.73B1.49B1.29B967.20M
Balance Sheet
Total Assets33.10B32.40B31.41B29.05B24.95B23.43B
Cash, Cash Equivalents and Short-Term Investments83.00M74.00M140.00M143.40M29.00M38.20M
Total Debt13.53B12.96B13.07B11.78B9.55B8.93B
Total Liabilities21.44B21.00B20.87B19.36B15.98B14.95B
Stockholders Equity11.66B11.40B10.54B9.69B8.98B8.48B
Cash Flow
Free Cash Flow2.35B2.08B1.99B1.74B1.47B1.28B
Operating Cash Flow4.15B3.94B3.62B3.19B2.79B2.47B
Investing Cash Flow-3.17B-2.56B-3.67B-4.42B-2.47B-1.92B
Financing Cash Flow-912.80M-1.40B61.90M1.34B-329.20M-612.00M

Republic Services Technical Analysis

Technical Analysis Sentiment
Negative
Last Price241.14
Price Trends
50DMA
248.09
Negative
100DMA
241.20
Negative
200DMA
223.73
Positive
Market Momentum
MACD
-1.99
Positive
RSI
40.35
Neutral
STOCH
21.00
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For RSG, the sentiment is Negative. The current price of 241.14 is below the 20-day moving average (MA) of 247.13, below the 50-day MA of 248.09, and above the 200-day MA of 223.73, indicating a neutral trend. The MACD of -1.99 indicates Positive momentum. The RSI at 40.35 is Neutral, neither overbought nor oversold. The STOCH value of 21.00 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for RSG.

Republic Services Risk Analysis

Republic Services disclosed 1 risk factors in its most recent earnings report. Republic Services reported the most risks in the "Legal & Regulatory" 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 (65)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
CLCLH
77
Outperform
$12.34B31.9116.02%8.52%4.51%
WMWM
72
Outperform
$91.39B34.2534.01%1.48%10.77%8.38%
72
Outperform
$7.20B517.101.00%21.63%-30.27%
RSRSG
70
Outperform
$74.28B35.8418.54%0.98%6.13%16.45%
65
Neutral
$10.77B15.805.51%1.90%3.03%-26.66%
* Industrials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
RSG
Republic Services
241.14
47.90
24.79%
CWST
Casella Waste
113.40
13.34
13.33%
CLH
Clean Harbors
234.15
10.96
4.91%
WM
Waste Management
227.10
19.44
9.36%

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
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: Jul 03, 2025