NasdaqGS:CWST

Stock Analysis Report

Executive Summary

Casella Waste Systems, Inc., together with its subsidiaries, operates as a vertically integrated solid waste services company in the northeastern United States.

Rewards

Earnings are forecast to grow 45.71% per year

Risk Analysis

Interest payments are not well covered by earnings

Large one-off items impacting financial results

Profit margins (1.2%) are lower than last year (6.3%)

Shareholders have been diluted in the past year



Snowflake Analysis

High growth potential with poor track record.


Similar Companies

Waste Management

NYSE:WM

Share Price & News

How has Casella Waste Systems's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: CWST has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

4.7%

CWST

0.8%

US Commercial Services

0.5%

US Market


1 Year Return

56.7%

CWST

22.4%

US Commercial Services

20.3%

US Market

Return vs Industry: CWST exceeded the US Commercial Services industry which returned 22.4% over the past year.

Return vs Market: CWST exceeded the US Market which returned 20.3% over the past year.


Shareholder returns

CWSTIndustryMarket
7 Day4.7%0.8%0.5%
30 Day10.8%3.9%2.0%
90 Day25.8%9.7%9.4%
1 Year56.7%56.7%26.7%22.4%22.8%20.3%
3 Year358.2%358.2%65.9%54.9%50.1%40.4%
5 Year1210.0%1210.0%105.3%83.4%73.1%54.1%

Price Volatility Vs. Market

How volatile is Casella Waste Systems's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Casella Waste Systems undervalued compared to its fair value and its price relative to the market?

283.39x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: CWST ($54.89) is trading above our estimate of fair value ($46.8)

Significantly Below Fair Value: CWST is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: CWST is poor value based on its PE Ratio (283.4x) compared to the Commercial Services industry average (26.6x).

PE vs Market: CWST is poor value based on its PE Ratio (283.4x) compared to the US market (18.3x).


Price to Earnings Growth Ratio

PEG Ratio: CWST is poor value based on its PEG Ratio (6.2x)


Price to Book Ratio

PB vs Industry: CWST is overvalued based on its PB Ratio (23.7x) compared to the US Commercial Services industry average (1.9x).


Next Steps

Future Growth

How is Casella Waste Systems forecast to perform in the next 1 to 3 years based on estimates from 5 analysts?

45.7%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: CWST's forecast earnings growth (45.7% per year) is above the savings rate (1.7%).

Earnings vs Market: CWST's earnings (45.7% per year) are forecast to grow faster than the US market (14.2% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: CWST's revenue (8.2% per year) is forecast to grow faster than the US market (7.6% per year).

High Growth Revenue: CWST's revenue (8.2% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: CWST's Return on Equity is forecast to be high in 3 years time (38%)


Next Steps

Past Performance

How has Casella Waste Systems performed over the past 5 years?

26.8%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: CWST has a large one-off loss of $22.4M impacting its September 30 2019 financial results.

Growing Profit Margin: CWST's current net profit margins (1.2%) are lower than last year (6.3%).


Past Earnings Growth Analysis

Earnings Trend: CWST has become profitable over the past 5 years, growing earnings by 26.8% per year.

Accelerating Growth: CWST's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: CWST had negative earnings growth (-77.8%) over the past year, making it difficult to compare to the Commercial Services industry average (-0.6%).


Return on Equity

High ROE: CWST's Return on Equity (8%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Casella Waste Systems's financial position?


Financial Position Analysis

Short Term Liabilities: CWST's short term assets ($113.8M) do not cover its short term liabilities ($127.0M).

Long Term Liabilities: CWST's short term assets ($113.8M) do not cover its long term liabilities ($698.0M).


Debt to Equity History and Analysis

Debt Level: CWST's debt to equity ratio (466.7%) is considered high.

Reducing Debt: CWST had negative shareholder equity 5 years ago, but is now positive and has therefore improved.


Balance Sheet

Inventory Level: CWST has a high level of physical assets or inventory.

Debt Coverage by Assets: CWST's debt is not covered by short term assets (assets are 0.2x debt).


Cash Runway Analysis

For companies that have on average been loss making in the past we assess whether they have at least 1 year of cash runway.

Stable Cash Runway: CWST is profitable, therefore cash runway is not a concern.

Forecast Cash Runway: CWST is profitable, therefore cash runway is not a concern.


Next Steps

Dividend

What is Casella Waste Systems's current dividend yield, its reliability and sustainability?


Dividend Yield vs Market

companyn/amarketbottom25%1.4%markettop25%3.7%industryaverage1.5%forecastin3Years0%

Current dividend yield vs market & industry

Notable Dividend: Unable to evaluate CWST's dividend yield against the bottom 25% of dividend payers, as the company has not reported any payouts.

High Dividend: Unable to evaluate CWST's dividend yield against the top 25% of dividend payers, as the company has not reported any payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if CWST's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if CWST's dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of CWST's dividend in 3 years as they are not forecast to pay a notable one for the US market.


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

13.8yrs

Average management tenure


CEO

John Casella (68yo)

27.1yrs

Tenure

US$2,522,803

Compensation

Mr. John W. Casella has been the Chief Executive Officer of Casella Waste Systems, Inc. since 1993 and also serves as its Secretary. Mr. Casella has been Chief Executive Officer of Casella Waste Management ...


CEO Compensation Analysis

Compensation vs Market: John's total compensation ($USD2.52M) is below average for companies of similar size in the US market ($USD4.89M).

Compensation vs Earnings: John's compensation has been consistent with company performance over the past year.


Leadership Team

NamePositionTenureCompensationOwnership
John Casella
Chairman27.1yrsUS$2.52m1.53% $39.5m
Edwin Johnson
President & COO7.2yrsUS$1.47m0.68% $17.5m
Edmond Coletta
Senior VP7.2yrsUS$1.34m0.31% $8.0m
Christopher Heald
VP of Finance & Chief Accounting Officer7.1yrsUS$519.35k0.11% $2.9m
David Schmitt
Senior VP & General Counsel13.8yrsUS$729.97k0.024% $631.6k
Joseph Fusco
Vice President of Communications25.1yrsno datano data
Michael Viani
Vice President of Business Development & Special Waste9.1yrsno datano data
Gerald Gormley
Vice President of Human Resources20.5yrsno datano data
Christopher DesRoches
Vice President of Customer Service14.7yrsno datano data
Jason Mead
Director of Finance0yrsno datano data

13.8yrs

Average Tenure

62yo

Average Age

Experienced Management: CWST's management team is seasoned and experienced (13.8 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
John Casella
Chairman27.1yrsUS$2.52m1.53% $39.5m
Gregory Peters
Independent Director27.1yrsUS$165.00k0.17% $4.4m
Joseph Doody
Independent Director15.5yrsUS$130.00k0.064% $1.7m
Douglas Casella
Vice Chairman27.1yrsno data2.26% $58.5m
James O'Connor
Lead Independent Director4.3yrsUS$195.00k0.042% $1.1m
William Hulligan
Independent Director4.4yrsUS$120.00k0.083% $2.1m
Michael Burke
Independent Director12yrsUS$120.00k0.070% $1.8m
James Callahan
Independent Director16.9yrsUS$137.50k0.20% $5.2m
Michael Battles
Independent Director0.2yrsno data0.0023% $58.4k
Emily Nagle Green
Independent Director7.6yrsUS$120.00k0.060% $1.5m

13.8yrs

Average Tenure

67.5yo

Average Age

Experienced Board: CWST's board of directors are seasoned and experienced ( 13.8 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: CWST insiders have only sold shares in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 8.3%.


Top Shareholders

Company Information

Casella Waste Systems, Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Casella Waste Systems, Inc.
  • Ticker: CWST
  • Exchange: NasdaqGS
  • Founded: 1975
  • Industry: Environmental and Facilities Services
  • Sector: Commercial Services
  • Market Cap: US$2.585b
  • Shares outstanding: 47.78m
  • Website: https://www.casella.com

Number of Employees


Location

  • Casella Waste Systems, Inc.
  • 25 Greens Hill Lane
  • Rutland
  • Vermont
  • 5701
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
CWSTNasdaqGS (Nasdaq Global Select)YesClass A Common StockUSUSDOct 1997
WA3DB (Deutsche Boerse AG)YesClass A Common StockDEEUROct 1997

Biography

Casella Waste Systems, Inc., together with its subsidiaries, operates as a vertically integrated solid waste services company in the northeastern United States. The company operates through Eastern, Western, Recycling, and Other segments. It offers resource management services primarily in the areas of solid waste collection and disposal, transfer, recycling, and organics services to residential, commercial, municipal, and industrial customers. The company provides a range of non-hazardous solid waste services, including collections, transfer stations, material recovery facilities, and disposal facilities. It also processes and markets recyclable metals, aluminum, plastics, and paper and corrugated cardboard, as well as recyclables purchased from third-parties. In addition, the company is involved in commodity brokerage operations. As of January 31, 2019, it owned and/or operated 37 solid waste collection operations, 49 transfer stations, 18 recycling facilities, 8 Subtitle D landfills, 4 landfill gas-to-energy facilities, and 1 landfill permitted to accept construction and demolition materials. Casella Waste Systems, Inc. was founded in 1975 and is headquartered in Rutland, Vermont. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/19 23:45
End of Day Share Price2020/02/19 00:00
Earnings2019/09/30
Annual Earnings2018/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.