2 Reasons to Like RSG (and 1 Not So Much)

September 25, 2025 at 00:04 AM EDT

RSG Cover Image

Republic Services currently trades at $228.05 per share and has shown little upside over the past six months, posting a small loss of 4.1%. The stock also fell short of the S&P 500’s 14.9% gain during that period.

Is now the time to buy RSG? Or does the price properly account for its business quality and fundamentals? Find out in our full research report, it’s free.

Why Does RSG Stock Spark Debate?

Processing several million tons of recyclables annually, Republic (NYSE: RSG) provides waste management services for residences, companies, and municipalities.

Two Positive Attributes:

1. Long-Term Revenue Growth Shows Strong Momentum

Examining a company’s long-term performance can provide clues about its quality. Any business can experience short-term success, but top-performing ones enjoy sustained growth for years. Over the last five years, Republic Services grew its sales at a solid 9.8% compounded annual growth rate. Its growth beat the average industrials company and shows its offerings resonate with customers.

2. Operating Margin Reveals a Well-Run Organization

Operating margin is a key measure of profitability. Think of it as net income - the bottom line - excluding the impact of taxes and interest on debt, which are less connected to business fundamentals.

Republic Services has been a well-oiled machine over the last five years. It demonstrated elite profitability for an industrials business, boasting an average operating margin of 18.8%. This result isn’t surprising as its high gross margin gives it a favorable starting point.

Republic Services Trailing 12-Month Operating Margin (GAAP)

One Reason to be Careful:

Sales Volumes Stall, Demand Waning

Revenue growth can be broken down into changes in price and volume (the number of units sold). While both are important, volume is the lifeblood of a successful Waste Management company because there’s a ceiling to what customers will pay.

Over the last two years, Republic Services failed to grow its units sold. This performance was underwhelming and implies there may be increasing competition or market saturation. It also suggests Republic Services might have to lower prices or invest in product improvements to accelerate growth, factors that can hinder near-term profitability. Republic Services Units Sold

Final Judgment

Republic Services’s merits more than compensate for its flaws. With its shares trailing the market in recent months, the stock trades at 31.6× forward P/E (or $228.05 per share). Is now a good time to buy? See for yourself in our in-depth research report, it’s free.

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