Casella Waste Systems’ third quarter results were well received by the market, driven by strong execution on its acquisition strategy and operational improvements in solid waste and landfill segments. Management credited the quarter’s performance to pricing strength, increased landfill volumes, and ongoing integration of acquired businesses. CEO John Casella highlighted the company’s ability to “overcome challenges and demonstrate the strength of our operating model,” noting that the Mid-Atlantic business showed significant progress. The integration of new assets and stable core operations were central themes supporting the quarter’s outperformance.
Is now the time to buy CWST? Find out in our full research report (it’s free for active Edge members).
Casella Waste Systems (CWST) Q3 CY2025 Highlights:
- Revenue: $485.4 million vs analyst estimates of $476.3 million (17.9% year-on-year growth, 1.9% beat)
- Adjusted EPS: $0.42 vs analyst estimates of $0.32 (29.5% beat)
- Adjusted EBITDA: $112.8 million vs analyst estimates of $115.6 million (23.2% margin, 2.4% miss)
- The company reconfirmed its revenue guidance for the full year of $1.83 billion at the midpoint
- EBITDA guidance for the full year is $412.5 million at the midpoint, below analyst estimates of $418 million
- Operating Margin: 6.1%, in line with the same quarter last year
- Organic Revenue rose 3.7% year on year vs analyst estimates of 3.8% growth (14.8 basis point miss)
- Market Capitalization: $5.71 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 From Casella Waste Systems’s Q3 Earnings Call
- Tyler Brown (Raymond James) asked if there were risks to margin expansion, especially considering the impact of acquisitions. CFO Brad Helgeson explained that while new acquisitions initially dilute margins, long-term integration typically expands them by 500 to 1,000 basis points.
- Trevor Romeo (William Blair) inquired about the opportunity for further internalizing landfill volumes. President Ned Coletta stated that internalization remains a key value driver and recent gains are the result of optimizing acquired assets.
- Adam Bubes (Goldman Sachs) questioned the trajectory of margins in the Mid-Atlantic segment. Helgeson responded that the headwind has lessened significantly and expects the region to become a margin tailwind as integration continues.
- James Schumm (TD Cowen) asked about the timeline for completing Mid-Atlantic billing system upgrades. Coletta projected full implementation by early next year, enabling better pricing and operational synergies.
- William Griffin (Barclays) sought clarity on pricing prospects in the Mid-Atlantic post-integration. Coletta said it is too early for specifics but expects improved analytics and efficiency to drive gradual pricing improvements over several years.
Catalysts in Upcoming Quarters
In upcoming quarters, the StockStory team will be watching (1) the pace of integration and synergy realization in the Mid-Atlantic and other recent acquisitions, (2) progress on permitting and capacity expansion at the Highland and Hakes landfills, and (3) the execution of technology upgrades, especially billing and automation systems. Developments in the M&A pipeline and the company’s ability to maintain pricing discipline will also be key indicators of future performance.
Casella Waste Systems currently trades at $88.32, up from $83.06 just before the earnings. Is the company at an inflection point that warrants a buy or sell? The answer lies in our full research report (it’s free for active Edge members).
Our Favorite Stocks Right Now
Trump’s April 2025 tariff bombshell triggered a massive market selloff, but stocks have since staged an impressive recovery, leaving those who panic sold on the sidelines.
Take advantage of the rebound by checking out our Top 5 Strong Momentum Stocks for this week. 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 Comfort Systems (+782% five-year return). Find your next big winner with StockStory today.
StockStory is growing and hiring equity analyst and marketing roles. Are you a 0 to 1 builder passionate about the markets and AI? See the open roles here.
