Clean Harbors (CLH): Examining Valuation as Investors Brace for Q3 Earnings and Lowered Forecasts

Clean Harbors (CLH) is facing heightened attention this week as investors gear up for its third quarter earnings release. The mood is more measured because the company fell short of expectations last quarter, and estimates have been trimmed over the past month.

See our latest analysis for Clean Harbors.

Shares of Clean Harbors have edged higher in the lead-up to this week's earnings, with a 6.1% one-month share price return suggesting cautious optimism after last quarter’s disappointment. That said, the one-year total shareholder return stands at -6.5%, reminding investors that momentum, while improving recently, is still lagging the standout multi-year gains the stock has delivered.

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With shares rebounding but estimates lowered, investors face a key question: does Clean Harbors’ subdued outlook mean the stock is attractively undervalued, or is the market already factoring in any future growth potential?

Most Popular Narrative: 7.6% Undervalued

Clean Harbors is trading below the most widely followed narrative’s fair value estimate, with the last close several percentage points under that price. This creates a compelling argument about where future growth and market changes could take the stock.

The growing urgency and evolving regulatory landscape around PFAS and hazardous waste management is expected to create a multibillion-dollar opportunity. Clean Harbors' unique position as the only company with end-to-end PFAS destruction capabilities positions it to capture significant long-term revenue and margin growth as new government and corporate standards take effect.

Read the complete narrative.

What’s driving that higher valuation target? The growth story hinges on advanced technology, market expansion, and a strategic bet on sustainability trends. Curious how much profit upside the narrative factors in and why analysts are eager about future margins? The numbers behind this fair value might surprise you.

Result: Fair Value of $266.56 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, if zero-waste initiatives accelerate or green manufacturing makes rapid advances, Clean Harbors’ market could shrink and these bullish expectations could be challenged.

Find out about the key risks to this Clean Harbors narrative.

Another View: Looking Through the Lens of Earnings Ratios

While Clean Harbors appears undervalued at a glance, its price-to-earnings ratio tells a different story. At 34.3x, it is priced higher than both the US Commercial Services industry average of 26.7x and its own fair ratio of 28.2x. This suggests investors are paying a premium and may be accepting more valuation risk if growth falls short. Does this premium indicate untapped upside or point to limited room for error?

See what the numbers say about this price — find out in our valuation breakdown.

Build Your Own Clean Harbors Narrative

If you want to dig deeper and make sense of the data yourself, you can shape a personalized perspective in just a few minutes. Do it your way.

A great starting point for your Clean Harbors research is our analysis highlighting 2 key rewards and 1 important warning sign that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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