Wrapping up Q2 earnings, we look at the numbers and key takeaways for the waste management stocks, including Montrose (NYSE:MEG) and its peers.
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 9 waste management stocks we track reported a slower Q2. As a group, revenues missed analysts’ consensus estimates by 0.7%.
In light of this news, share prices of the companies have held steady as they are up 2.4% on average since the latest earnings results.
Best Q2: Montrose (NYSE:MEG)
Founded to protect a tree-lined two-lane road, Montrose (NYSE:MEG) provides air quality monitoring, environmental laboratory testing, compliance, and environmental consulting services.
Montrose reported revenues of $234.5 million, up 35.3% year on year. This print exceeded analysts’ expectations by 24.4%. Overall, it was an incredible quarter for the company with a solid beat of analysts’ organic revenue estimates and a beat of analysts’ EPS estimates.
Montrose scored the biggest analyst estimates beat, fastest revenue growth, and highest full-year guidance raise of the whole group. Unsurprisingly, the stock is up 22.9% since reporting and currently trades at $27.79.
We think Montrose is a good business, but is it a buy today? Read our full report here, it’s free.
Waste Connections (NYSE:WCN)
Operating a network of municipal solid waste landfills in the U.S. and Canada, Waste Connections (NYSE:WCN) is North America's third-largest waste management company providing collection, disposal, and recycling services.
Waste Connections reported revenues of $2.41 billion, up 7.1% year on year, outperforming analysts’ expectations by 0.7%. The business had a strong quarter with an impressive beat of analysts’ adjusted operating income estimates and a beat of analysts’ EPS estimates.
However, the results were likely priced into the stock as it’s traded sideways since reporting. Shares currently sit at $185.80.
Is now the time to buy Waste Connections? Access our full analysis of the earnings results here, it’s free.
Weakest Q2: 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 $59.54 million, down 18.6% year on year, falling short of analysts’ expectations by 17.9%. It was a disappointing quarter as it posted a significant miss of analysts’ EBITDA and EPS estimates.
Quest Resource delivered the weakest performance against analyst estimates and slowest revenue growth in the group. As expected, the stock is down 18.9% since the results and currently trades at $1.59.
Read our full analysis of Quest Resource’s results here.
Republic Services (NYSE:RSG)
Processing several million tons of recyclables annually, Republic (NYSE:RSG) provides waste management services for residences, companies, and municipalities.
Republic Services reported revenues of $4.24 billion, up 4.6% year on year. This result came in 0.7% below analysts' expectations. Aside from that, it was a mixed quarter as it also logged a narrow beat of analysts’ sales volume estimates but full-year revenue guidance slightly missing analysts’ expectations.
Republic Services had the weakest full-year guidance update among its peers. The stock is down 4.1% since reporting and currently trades at $236.11.
Read our full, actionable report on Republic Services here, it’s free.
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 $6.43 billion, up 19% year on year. This number topped analysts’ expectations by 1.1%. Zooming out, it was a mixed quarter as it also produced a decent beat of analysts’ EBITDA estimates but a slight miss of analysts’ adjusted operating income estimates.
The stock is flat since reporting and currently trades at $230.01.
Read our full, actionable report on Waste Management 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 U.S. 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, leaving much uncertainty around 2025.
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