Positive Landfill Commentary#
William Blair recently released a research note on Casella Waste Systems (NASDAQ:CWST), emphasizing the company's reassuring comments about its landfill operations. This comes at a time when investors are particularly focused on how landfill management affects overall performance. Following this report, Casella Waste's stock saw a notable increase of 13% over the past week, reaching $86.83. However, it's important to note that shares are still down 26% compared to last year.
Growth in Revenue and Volume#
According to data from InvestingPro, Casella Waste has a market capitalization of $5.52 billion, with revenue increasing nearly 15% in the last twelve months. The company reported growth in both third-party and internalized tons during the quarter, particularly a 13% rise in construction and demolition volumes. A new transfer station in McKean is expected to further enhance internal operations.
Encouraging Pricing Outlook#
Looking ahead, the pricing outlook for Casella Waste appears optimistic, with a projected increase of 4%-5% expected for 2026. This positive trend is attributed to improved commercial discipline under the new chief revenue officer and the tightening of a key competitor’s rail-based capacity, which is moving from New Jersey to Ohio.
Future Expansion Plans#
Management is confident about obtaining expansion permits for their Hakes facility in the third quarter of 2026 and for the Hyland facility in the first quarter of 2027. These expansions are expected to help offset challenges posed by the planned closure of the Ontario facility at the end of 2028. Even if some of the waste from Ontario is lost to third parties, management believes that the overall impact will be neutral in terms of earnings before interest, taxes, depreciation, and amortization (EBITDA) and will maintain positive free cash flow due to higher capital expenditures and operating costs.
Strong First Quarter Performance#
In its recent financial results for the first quarter of 2026, Casella Waste exceeded analysts' expectations with an earnings per share (EPS) of $0.20, surpassing the forecast of $0.18. The company also reported revenue of $457.3 million, which was above the anticipated $454.57 million. Additionally, Barclays upgraded Casella Waste from Equalweight to Overweight, raising its price target to $102.00 from $101.00, citing strong first-quarter results and effective cost-saving measures as key reasons for the upgrade.