The end of an earnings season can be a great time to discover new stocks and assess how companies are handling the current business environment. Let’s take a look at how Enviri (NYSE: NVRI) and the rest of the waste management stocks fared in Q3.
Waste management companies can possess licenses permitting them to handle hazardous materials. Furthermore, many services are performed through contracts and statutorily mandated, non-discretionary, or recurring, leading to more predictable revenue streams. However, regulation can be a headwind, rendering existing services obsolete or forcing companies to invest precious capital to comply with new, more environmentally-friendly rules. Lastly, waste management companies are at the whim of economic cycles. Interest rates, for example, can greatly impact industrial production or commercial projects that create waste and byproducts.
The 8 waste management stocks we track reported a softer Q3. As a group, revenues missed analysts’ consensus estimates by 2.1%.
Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 5.5% since the latest earnings results.
Enviri (NYSE: NVRI)
Cooling America’s first indoor ice rink in the 19th century, Enviri (NYSE: NVRI) offers steel and waste handling services.
Enviri reported revenues of $573.6 million, up 9.3% year on year. This print fell short of analysts’ expectations by 6.5%. Overall, it was a disappointing quarter for the company with full-year EBITDA guidance missing analysts’ expectations.
“Enviri reported results within our quarterly earnings guidance range, despite market weakness in Harsco Environmental as well as shipment delays and operational challenges within Harsco Rail,” said Enviri Chairman and CEO Nick Grasberger.
Enviri delivered the weakest performance against analyst estimates of the whole group. Unsurprisingly, the stock is down 27% since reporting and currently trades at $7.33.
Read our full report on Enviri here, it’s free.
Best Q3: Waste Management (NYSE: WM)
Headquartered in Houston, Waste Management (NYSE: WM) is a provider of comprehensive waste management services in North America.
Waste Management reported revenues of $5.61 billion, up 7.9% year on year, outperforming analysts’ expectations by 1.7%. The business had a strong quarter with a decent beat of analysts’ adjusted operating income estimates.
Waste Management scored the biggest analyst estimates beat among its peers. The market seems happy with the results as the stock is up 9.6% since reporting. It currently trades at $228.46.
Is now the time to buy Waste Management? Access our full analysis of the earnings results here, it’s free.
Weakest Q3: Quest Resource (NASDAQ: QRHC)
Recycling corporate waste to help companies be more sustainable, Quest Resource (NASDAQ: QRHC) is a provider of waste and recycling services.
Quest Resource reported revenues of $72.77 million, up 3.3% year on year, falling short of analysts’ expectations by 5.6%. It was a disappointing quarter as it posted a significant miss of analysts’ EBITDA and EPS estimates.
As expected, the stock is down 12.8% since the results and currently trades at $7.18.
Read our full analysis of Quest Resource’s results here.
Perma-Fix (NASDAQ: PESI)
Tackling hazardous waste challenges since 1990, Perma-Fix (NASDAQ: PESI) provides environmental waste treatment services.
Perma-Fix reported revenues of $16.81 million, down 23.2% year on year. This number came in 2.3% below analysts' expectations. Overall, it was a disappointing quarter as it also produced a significant miss of analysts’ EBITDA and EPS estimates.
Perma-Fix had the slowest revenue growth among its peers. The stock is down 6.7% since reporting and currently trades at $13.70.
Read our full, actionable report on Perma-Fix here, it’s free.
Casella Waste Systems (NASDAQ: CWST)
Starting with the founder picking up garbage with a pickup truck he purchased using savings from high school, Casella (NASDAQ: CWST) offers waste management services for businesses, residents, and the government.
Casella Waste Systems reported revenues of $411.6 million, up 16.7% year on year. This result was in line with analysts’ expectations. More broadly, it was a softer quarter as it logged a significant miss of analysts’ adjusted operating income estimates.
Casella Waste Systems pulled off the fastest revenue growth but had the weakest full-year guidance update among its peers. The stock is up 10.9% since reporting and currently trades at $112.28.
Read our full, actionable report on Casella Waste Systems here, it’s free.
Market Update
As a result of the Fed's rate hikes in 2022 and 2023, inflation has come down from frothy levels post-pandemic. The general rise in the price of goods and services is trending towards the Fed's 2% goal as of late, which is good news. The higher rates that fought inflation also didn't slow economic activity enough to catalyze a recession. So far, soft landing. This, combined with recent rate cuts (half a percent in September 2024 and a quarter percent in November 2024) have led to strong stock market performance in 2024. The icing on the cake for 2024 returns was Donald Trump's victory in the US Presidential Election in early November, sending major indices to all-time highs in the week following the election. Still, debates around the health of the economy and the impact of potential tariffs and corporate tax cuts remain. Said differently, there's still much uncertainty around 2025.
Want to invest in winners with rock-solid fundamentals? Check out our Top 6 Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.
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