Waste Connections (WCN) AI Stock Analysis

• Market Cap: $70.35B
• Dividend Yield: 0.61%
• Average Volume (3M): 367.92K
• Price to Earnings (P/E): 81.1
• Beta (1Y): 0.59
• Revenue Growth: 14.23%
• EPS Growth: -18.94%
• Country: CA
• Employees: 23,854
• Sector: Industrials
• Sector Strength: 75
• Industry: Waste Management
• EPS (TTM): 3.36
• Shares Outstanding: 258,394,230
• 10 Day Avg. Volume: 271,251
• 30 Day Avg. Volume: 367,924
• PEG Ratio: 3.87
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.00
• Price to Cash Flow (P/CF): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: 1.21
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: 22.80
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $297.94
• Price Target Upside: 10.14% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 15

Waste Connections' stock is well-supported by strong financial performance and positive earnings call insights, which highlight robust growth and strategic acquisitions. However, the high P/E ratio suggests overvaluation risk, and technical indicators are mixed. The company's commitment to operational excellence and employee retention further enhances its position, justifying a strong but cautious outlook.

Positive Factors

M&A Activity

The year 2025 is set to be another strong year for acquisition activity, with the company completing acquisitions generating annual revenues of over $125 million.

Pricing Trends

Better-than-expected pricing trends and improved price retention are contributing to the company's growth.

Stock Performance

The stock has outperformed the S&P 500 and S&P/TSX Composite by approximately 20% and 10%, respectively, indicating strong performance in a volatile market.

Negative Factors

Future Pricing

The 6.9% yoy increase in 1Q should revert to the lower trend over the next 3 quarters, but a fairly aggressive 40 bps sequential move per quarter would still yield an annual price increase of approximately 6.3%.

Revenue Guidance

Revenue guidance was about 1% below consensus, and adjusted EBITDA margin guidance was about 40 basis points below consensus, reflecting normal second-quarter seasonal trends.

Solid Waste Volumes

Solid waste volumes were negative 2.8% in 1Q but down 2.3% after adjusting for weather.

Waste Connections Business Overview & Revenue Model

Company Description

Waste Connections, Inc. provides non-hazardous waste collection, transfer, disposal, and resource recovery services in the United States and Canada. It offers collection services to residential, commercial, municipal, industrial, and exploration and production (E&P) customers; landfill disposal services; and recycling services for various recyclable materials, including compost, cardboard, mixed paper, plastic containers, glass bottles, and ferrous and aluminum metals. The company also owns and operates transfer stations that receive compact and/or load waste to be transported to landfills or treatment facilities through truck, rail, or barge; and intermodal services for the rail haul movement of cargo and solid waste containers in the Pacific Northwest through a network of intermodal facilities. In addition, it provides E&P waste treatment, recovery, and disposal services for waste resulting from oil and natural gas exploration and production activity, such as drilling fluids, drill cuttings, completion fluids, and flowback water; production wastes and produced water during a well's operating life; contaminated soils that require treatment during site reclamation; and substances, which require clean-up after a spill, reserve pit clean-up, or pipeline rupture. Further, the company offers leasing services to its customers. As of December 31, 2021, it owned 334 solid waste collection operations; 142 transfer stations; 61 municipal solid waste (MSW) landfills; 12 E&P waste landfills; 14 non-MSW landfills; 71 recycling operations; 4 intermodal operations; 23 E&P liquid waste injection wells; and 19 E&P waste treatment and oil recovery facilities. The company also operates an additional 53 transfer stations, 10 MSW landfills, and 2 intermodal operations. Waste Connections, Inc. was founded in 1997 and is based in Woodbridge, Canada.

How the Company Makes Money

Waste Connections generates revenue primarily through its waste collection, transfer, disposal, and recycling services. The company charges fees for collecting and transporting waste from residential, commercial, and industrial customers to transfer stations or directly to disposal sites. Additionally, Waste Connections earns revenue from tipping fees for waste disposed of at its owned or operated landfills and transfer stations. Recycling services also contribute to the company's earnings, as it processes recyclable materials and sells them to third-party buyers. Key factors contributing to its revenue include long-term contracts with municipalities and businesses, strategic acquisitions to expand market presence, and maintaining efficient operations to manage costs effectively. Furthermore, Waste Connections benefits from its vertically integrated operations, which allow it to control various stages of the waste management process, enhancing profitability.

Waste Connections Financial Statement Overview

Summary

Waste Connections exhibits a strong financial position with solid revenue growth and profitability metrics. The company maintains a balanced capital structure, although attention to debt levels is advised. Cash flows are robust, supporting ongoing investments and potential future growth. The financial health of Waste Connections is commendable, reflecting a well-managed firm in the waste management industry.

Income Statement

Waste Connections has demonstrated strong revenue growth, with the latest TTM revenue reaching $9.08 billion, a 1.75% increase from the previous year. The gross profit margin is healthy at 42.0%, and the net profit margin has slightly improved to 6.93%. Both EBIT and EBITDA margins are robust at 12.02% and 25.43%, respectively, indicating efficient operations and management control over expenses.

Balance Sheet

The company's debt-to-equity ratio stands at 1.09, indicating a moderate level of leverage. Return on equity (ROE) is 7.85%, reflecting a stable performance in generating returns on shareholder investments. The equity ratio is 39.57%, showing a balanced capital structure with a significant portion of assets financed by equity. The balance sheet demonstrates stability but suggests a watchful eye on debt levels.

Cash Flow

Waste Connections has shown consistent free cash flow generation, with a slight increase in free cash flow to $1.18 billion. The operating cash flow to net income ratio is strong at 3.62, indicating excellent cash generation relative to net income. Free cash flow to net income is 1.88, suggesting robust cash conversion and financial flexibility. The company maintains a solid cash flow position, supporting growth and operational investments.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
8.92B	8.02B	7.21B	6.15B	5.45B
	Gross Profit
3.73B	3.28B	2.88B	2.50B	2.17B
	EBIT
1.07B	1.24B	1.24B	1.04B	883.01M
	EBITDA
2.25B	2.26B	2.17B	1.89B	1.17B
	Net Income Common Stockholders
617.57M	762.80M	835.66M	618.05M	204.68M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
62.37M	78.40M	78.64M	147.44M	617.29M
	Total Assets
19.82B	17.92B	17.13B	14.70B	13.99B
	Total Debt
8.39B	7.02B	7.10B	5.21B	4.89B
	Net Debt
8.33B	6.94B	7.02B	5.07B	4.28B
	Total Liabilities
11.96B	10.22B	10.02B	7.71B	7.13B
	Stockholders Equity
7.86B	7.69B	7.11B	6.99B	6.86B
Cash Flow		Free Cash Flow
1.17B	1.19B	1.11B	953.91M	743.96M
	Operating Cash Flow
2.23B	2.13B	2.02B	1.70B	1.41B
	Investing Cash Flow
-3.16B	-1.58B	-3.09B	-1.69B	-1.05B
	Financing Cash Flow
944.95M	-544.40M	1.03B	-499.50M	-78.22M

Waste Connections Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 270.52
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:WCN, the sentiment is Positive. The current price of 270.52 is below the 20-day moving average (MA) of 271.60, below the 50-day MA of 270.95, and above the 200-day MA of 257.15, indicating a neutral trend. The MACD of -0.24 indicates Positive momentum. The RSI at 49.09 is Neutral, neither overbought nor oversold. The STOCH value of 36.81 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:WCN.

Waste Connections Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
WCN	77 Outperform	$70.35B	81.09	7.96%	0.61%	14.23%	-18.94%
Sector *	63 Neutral	$4.26B	11.52	5.29%	212.28%	4.06%	-9.38%
WM	40 Underperform	C$60.49M	―	-3.48%	―	―	9.09%

Waste Connections Corporate Events

Waste Connections Schedules Q1 2025 Earnings Release and Investor Call

Waste Connections announced it will release its first quarter 2025 financial results on April 23, 2025, followed by an investor conference call on April 24. This announcement is part of the company’s ongoing communication with investors and stakeholders, reflecting its commitment to transparency and engagement in the financial community.

Waste Connections Declares Quarterly Dividend with Future Growth Focus

Waste Connections, Inc. has announced a regular quarterly cash dividend of $0.315 per common share, payable on March 13, 2025. The board plans to review the dividend annually with the intent to increase it over time. The dividend will be paid in U.S. dollars or Canadian dollars depending on the shareholder’s residency and the depository they use. This announcement underscores Waste Connections’ commitment to returning value to shareholders while maintaining its focus on long-term growth and sustainability initiatives, which are integral to its business operations.

Waste Connections Announces Robust 2024 Results and Optimistic 2025 Outlook

Waste Connections, Inc. reported strong financial results for the fourth quarter and full year 2024, with significant revenue growth and improved operating trends. The company achieved a record year of acquisitions, contributing approximately $750 million in annualized revenue. Looking ahead to 2025, Waste Connections anticipates further growth, projecting revenue between $9.45 billion and $9.60 billion, with an emphasis on organic growth and continued acquisition activity. The company’s strategic focus on human capital has led to improved employee retention, setting the stage for continued expansion in operating margins.