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 45.14% 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

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

0.4%

CWST

0.3%

US Commercial Services

-0.09%

US Market


1 Year Return

63.7%

CWST

24.6%

US Commercial Services

23.9%

US Market

Return vs Industry: CWST exceeded the US Commercial Services industry which returned 23.7% over the past year.

Return vs Market: CWST exceeded the US Market which returned 24.7% over the past year.


Shareholder returns

CWSTIndustryMarket
7 Day0.4%0.3%-0.09%
30 Day8.9%4.5%3.1%
90 Day18.8%6.2%10.4%
1 Year63.7%63.7%29.2%24.6%26.6%23.9%
3 Year319.6%319.6%65.3%54.5%50.9%41.2%
5 Year1206.3%1206.3%110.7%89.4%78.1%58.5%

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?

256.95x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: CWST ($49.4) is trading above our estimate of fair value ($44.52)

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 (255x) compared to the Commercial Services industry average (26.4x).

PE vs Market: CWST is poor value based on its PE Ratio (255x) compared to the US market (18.9x).


Price to Earnings Growth Ratio

PEG Ratio: CWST is poor value based on its PEG Ratio (5.6x)


Price to Book Ratio

PB vs Industry: CWST is overvalued based on its PB Ratio (21.3x) compared to the US Commercial Services industry average (2.1x).


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 (45.1% per year) is above the savings rate (1.7%).

Earnings vs Market: CWST's earnings (45.1% per year) are forecast to grow faster than the US market (14.3% per year).

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

Revenue vs Market: CWST's revenue (8.4% per year) is forecast to grow faster than the US market (7.5% per year).

High Growth Revenue: CWST's revenue (8.4% 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 (-1.3%).


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 (481.6%) is considered high.

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

Debt Coverage: CWST's debt is not well covered by operating cash flow (19.2%).

Interest Coverage: CWST's interest payments on its debt are not well covered by EBIT (2.2x coverage).


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).


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

What is the CEO of Casella Waste Systems's salary, the management and board of directors tenure and is there insider trading?

13.7yrs

Average management tenure


CEO

John Casella (68yo)

27yrs

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 ($USD2.52M) is below average for companies of similar size in the US market ($USD3.86M).

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


Management Age and Tenure

13.7yrs

Average Tenure

62yo

Average Age

Experienced Management: CWST's management team is seasoned and experienced (13.7 years average tenure).


Board Age and Tenure

13.7yrs

Average Tenure

67.5yo

Average Age

Experienced Board: CWST's board of directors are seasoned and experienced ( 13.7 years average tenure).


Insider Trading

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


Recent Insider Transactions

SellUS$115,27504 Dec 19
Emily Nagle Green
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares2,500
Max PriceUS$46.11
SellUS$420,12007 Nov 19
James Callahan
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares10,000
Max PriceUS$42.01
SellUS$1,744,45728 Aug 19
Douglas Casella
EntityIndividual
Role
Vice Chairman
Vice Chairman
Shares38,853
Max PriceUS$44.90
SellUS$458,02819 Aug 19
Michael Burke
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares10,000
Max PriceUS$45.80
SellUS$2,872,58014 Aug 19
Joseph Doody
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares63,395
Max PriceUS$45.55
SellUS$314,30014 Aug 19
Gregory Peters
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares7,000
Max PriceUS$44.90
SellUS$454,05414 Aug 19
James Callahan
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares10,000
Max PriceUS$45.41
SellUS$1,703,29612 Aug 19
Douglas Casella
EntityIndividual
Role
Vice Chairman
Vice Chairman
Shares37,283
Max PriceUS$45.69
SellUS$990,12208 Aug 19
Edmond Coletta
EntityIndividual
Role
Chief Financial Officer
Senior VP
Shares21,011
Max PriceUS$47.12
SellUS$471,17608 Aug 19
David Schmitt
EntityIndividual
Role
Chief Legal Officer
Senior VP & General Counsel
Shares10,000
Max PriceUS$47.12
SellUS$4,418,38608 Aug 19
John Casella
EntityIndividual
Role
Chief Executive Officer
Chairman
Shares98,844
Max PriceUS$44.70
SellUS$446,00006 Aug 19
William Hulligan
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares10,000
Max PriceUS$44.60
SellUS$443,90006 Aug 19
James O'Connor
EntityIndividual
Role
Lead Director
Lead Independent Director
Shares10,000
Max PriceUS$44.39
SellUS$385,17524 May 19
James Callahan
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares10,000
Max PriceUS$38.53
SellUS$694,06117 May 19
Christopher Heald
EntityIndividual
Role
Chief Accounting Officer
VP of Finance & Chief Accounting Officer
Shares17,851
Max PriceUS$38.88
SellUS$464,36617 May 19
Edmond Coletta
EntityIndividual
Role
Chief Financial Officer
Senior VP
Shares12,000
Max PriceUS$38.70
SellUS$312,23310 May 19
Michael Burke
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares8,389
Max PriceUS$37.22
SellUS$779,14907 May 19
John Casella
EntityIndividual
Role
Chief Executive Officer
Chairman
Shares20,882
Max PriceUS$37.31
SellUS$372,25407 May 19
David Schmitt
EntityIndividual
Role
Chief Legal Officer
Senior VP & General Counsel
Shares10,000
Max PriceUS$37.23
SellUS$689,98028 Mar 19
James Callahan
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares20,000
Max PriceUS$34.50
SellUS$1,159,78014 Mar 19
Douglas Casella
EntityIndividual
Role
Vice Chairman
Vice Chairman
Shares33,961
Max PriceUS$34.16
SellUS$357,00027 Feb 19
William Hulligan
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares10,000
Max PriceUS$35.70
SellUS$1,506,09327 Feb 19
Edwin Johnson
EntityIndividual
Role
President
President & COO
Shares42,485
Max PriceUS$35.45
SellUS$703,00027 Feb 19
David Schmitt
EntityIndividual
Role
Chief Legal Officer
Senior VP & General Counsel
Shares20,000
Max PriceUS$35.15
SellUS$1,053,90027 Feb 19
Christopher Heald
EntityIndividual
Role
Chief Accounting Officer
VP of Finance & Chief Accounting Officer
Shares30,000
Max PriceUS$35.13
SellUS$2,416,11727 Feb 19
John Casella
EntityIndividual
Role
Chief Executive Officer
Chairman
Shares68,902
Max PriceUS$35.18

Ownership Breakdown

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


Management Team

  • John Casella (68yo)

    Chairman

    • Tenure: 27yrs
    • Compensation: US$2.52m
  • David Schmitt (68yo)

    Senior VP & General Counsel

    • Tenure: 13.7yrs
    • Compensation: US$729.97k
  • Chris DesRoches (61yo)

    Vice President of Customer Service

    • Tenure: 14.6yrs
  • Joseph Fusco (55yo)

    Vice President of Communications

    • Tenure: 25yrs
  • Edwin Johnson (62yo)

    President & COO

    • Tenure: 7.1yrs
    • Compensation: US$1.47m
  • Michael Viani (64yo)

    Vice President of Business Development & Special Waste

    • Tenure: 9yrs
  • Ned Coletta (43yo)

    Senior VP

    • Tenure: 7.1yrs
    • Compensation: US$1.34m
  • Gerald Gormley (70yo)

    Vice President of Human Resources

    • Tenure: 20.4yrs
  • Christopher Heald (54yo)

    VP of Finance & Chief Accounting Officer

    • Tenure: 7yrs
    • Compensation: US$519.35k
  • Jason Mead

    Director of Finance


    Board Members

    • Gregory Peters (73yo)

      Independent Director

      • Tenure: 27yrs
      • Compensation: US$165.00k
    • Joe Doody (67yo)

      Independent Director

      • Tenure: 15.4yrs
      • Compensation: US$130.00k
    • John Casella (68yo)

      Chairman

      • Tenure: 27yrs
      • Compensation: US$2.52m
    • Douglas Casella (63yo)

      Vice Chairman

      • Tenure: 27yrs
    • Jim O'Connor (70yo)

      Lead Independent Director

      • Tenure: 4.3yrs
      • Compensation: US$195.00k
    • Bill Hulligan (75yo)

      Independent Director

      • Tenure: 4.3yrs
      • Compensation: US$120.00k
    • Michael Burke (61yo)

      Independent Director

      • Tenure: 11.9yrs
      • Compensation: US$120.00k
    • James Callahan (75yo)

      Independent Director

      • Tenure: 16.8yrs
      • Compensation: US$137.50k
    • Mike Battles (51yo)

      Independent Director

      • Tenure: 0.08yrs
    • Emily Nagle Green (61yo)

      Independent Director

      • Tenure: 7.5yrs
      • Compensation: US$120.00k

    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$2.400b
    • 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 Analysis2020/01/24 23:43
    End of Day Share Price2020/01/24 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.