The Top 5 Analyst Questions From Casella Waste Systems's Q1 Earnings Call
Is now the time to buy CWST? Find out in our full research report (it's free).
Revenue: $417.1 million vs analyst estimates of $404.6 million (22.3% year-on-year growth, 3.1% beat)
Adjusted EPS: $0.19 vs analyst estimates of $0.10 (85% beat)
Adjusted EBITDA: $80.16 million vs analyst estimates of $83.98 million (19.2% margin, 4.5% miss)
The company reconfirmed its revenue guidance for the full year of $1.79 billion at the midpoint
EBITDA guidance for the full year is $417.5 million at the midpoint, in line with analyst expectations
Operating Margin: 0.8%, down from 2% in the same quarter last year
Organic Revenue rose 3.1% year on year (2.1% in the same quarter last year)
Market Capitalization: $7.26 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Adam Bubes (Goldman Sachs) asked how much of landfill volume recovery stemmed from recapturing lost construction and demolition waste. President Ned Coletta explained about one-third was recaptured volume, while two-thirds came from new transportation lanes and improved sales processes.
Trevor Romeo (William Blair) inquired about the sustainability of strong pricing trends. Jason Mead, EVP, stated pricing was slightly ahead of budget but expects some moderation through the year, with guidance remaining at about 5%.
Trevor Romeo (William Blair) also questioned the progress and challenges in integrating recent acquisitions. Coletta responded that operational and HR integration were ahead of expectations, but IT systems remain a bottleneck, representing future value-creation opportunities.
James Schumm (TD Cowen) asked about the dynamics behind lower disposal volumes but higher landfill volumes. Coletta clarified that transfer station activity was weak due to weather and construction, but landfill volumes were strong, driven by internalization and sales initiatives.
Stephanie Moore (Jefferies) sought detail on the EBITDA contribution from internalization following acquisitions. Coletta emphasized the benefit is acquisition-dependent and unfolds over time as contracts and logistics allow the movement of waste into owned landfills.
In the coming quarters, our analysts will be watching (1) the pace at which Casella integrates and realizes synergies from new acquisitions, (2) progress on further internalizing waste volumes into company-owned landfills, and (3) the operational and financial impact of recycling facility upgrades such as Willimantic. Monitoring how management navigates macroeconomic uncertainties and potential tariff exposure will also be key to assessing ongoing performance.
Casella Waste Systems currently trades at $113.74, down from $117.14 just before the earnings. In the wake of this quarter, is it a buy or sell? See for yourself in our full research report (it's free).
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