Unpacking Q2 Earnings: Republic Services (NYSE:RSG) In The Context Of Other Waste Management Stocks
The end of the earnings season is always a good time to take a step back and see who shined (and who not so much). Let’s take a look at how waste management stocks fared in Q2, starting with Republic Services (NYSE:RSG).
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 slower Q2. As a group, revenues missed analysts’ consensus estimates by 1.9%.
Valuation multiples for many growth stocks have not yet reverted to their early 2021 highs, but the market was optimistic at the end of 2023 due to cooling inflation. This year has been a different story as mixed inflation signals have led to market volatility. However, waste management stocks have held steady amidst all this with average share prices relatively unchanged since the latest earnings results.
Republic Services (NYSE:RSG)
Republic (NYSE:RSG) provides waste management services for residences, companies, and municipalities.
Republic Services reported revenues of $4.05 billion, up 8.6% year on year. This print was in line with analysts’ expectations, but overall, it was a mixed quarter for the company with a solid beat of analysts’ operating margin estimates but a miss of analysts’ volume estimates.
"We continue to prioritize our differentiating capabilities – Customer Zeal, Digital and Sustainability – to help our customers achieve their operational and sustainability goals, and drive significant value for our stakeholders," said Jon Vander Ark, president and chief executive officer.
Republic Services delivered the weakest full-year guidance update of the whole group. Interestingly, the stock is up 3.2% since reporting and currently trades at $206.
Is now the time to buy Republic Services? Access our full analysis of the earnings results here, it’s free.
Best Q2: Clean Harbors (NYSE:CLH)
Established in 1980, Clean Harbors (NYSE:CLH) provides environmental and industrial services like hazardous and non-hazardous waste disposal and emergency spill cleanups.
Clean Harbors reported revenues of $1.55 billion, up 11.1% year on year, outperforming analysts’ expectations by 1.5%. The business had a very strong quarter with an impressive beat of analysts’ operating margin estimates and a decent beat of analysts’ earnings estimates.
Clean Harbors pulled off the biggest analyst estimates beat among its peers. The market seems happy with the results as the stock is up 7.2% since reporting. It currently trades at $240.48.
Is now the time to buy Clean Harbors? 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 $73.15 million, down 1.8% year on year, falling short of analysts’ expectations by 4.6%. It was a disappointing quarter as it posted a miss of analysts’ earnings estimates.
Interestingly, the stock is up 1.9% since the results and currently trades at $8.50.
Read our full analysis of Quest Resource’s results here.
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 $5.40 billion, up 5.5% year on year. This print was in line with analysts’ expectations. More broadly, it was a mixed quarter as it logged a miss of analysts’ earnings estimates.
The stock is down 5.5% since reporting and currently trades at $205.50.
Read our full, actionable report on Waste Management here, it’s free.
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 $173.3 million, up 8.9% year on year. This print met analysts’ expectations. Aside from that, it was a mixed quarter as it also logged an impressive beat of analysts’ operating margin estimates but a miss of analysts’ earnings estimates.
The stock is down 4.3% since reporting and currently trades at $28.
Read our full, actionable report on Montrose here, it’s free.
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