Casella Waste Systems delivered first quarter results that exceeded Wall Street’s revenue and non-GAAP profit expectations, supported by ongoing strength in its landfill business and disciplined pricing. Management attributed the strong start to execution on fleet automation, improved employee retention, and integrating recent acquisitions. CEO John Casella emphasized, "Operationally, we continue to make excellent progress on initiatives to expand fleet automation, onboard computing, internalize incremental volume into our landfills, and improve employee retention." The company also overcame a challenging winter in the Northeast, with positive contributions from both organic growth and acquired businesses.
Is now the time to buy CWST? Find out in our full research report (it’s free).
Casella Waste Systems (CWST) Q1 CY2025 Highlights:
- 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.
Our Top 5 Analyst Questions Casella Waste Systems’s Q1 Earnings Call
- 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.
Catalysts in Upcoming Quarters
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).
High-Quality Stocks for All Market Conditions
Market indices reached historic highs following Donald Trump’s presidential victory in November 2024, but the outlook for 2025 is clouded by new trade policies that could impact business confidence and growth.
While this has caused many investors to adopt a "fearful" wait-and-see approach, we’re leaning into our best ideas that can grow regardless of the political or macroeconomic climate. Take advantage of Mr. Market by checking out our Top 5 Growth Stocks for this month. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today.
