The end of the earnings season is always a good time to take a step back and see who shined (and who not so much). Let’s take a look at how environmental and facilities services stocks fared in Q3, starting with BrightView (NYSE:BV).
Many environmental and facility services are non-discretionary (sports stadiums need to be cleaned after events), recurring, and performed through longer-term contracts. This makes for more predictable and stickier revenue streams. Additionally, there has been an increasing focus on emissions and water conservation over the last decade, driving innovation in the sector and demand for new services. Despite these tailwinds, environmental and facility services companies are still at the whim of economic cycles. Interest rates, for example, can greatly impact commercial construction projects that drive incremental demand for these services.
The 14 environmental and facilities services stocks we track reported a slower Q3. As a group, revenues were in line with analysts’ consensus estimates while next quarter’s revenue guidance was 1.7% above.
Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 5% since the latest earnings results.
BrightView (NYSE:BV)
An official field consultant for Major League Baseball, BrightView (NYSE:BV) offers landscaping design, development, and maintenance.BrightView reported revenues of $728.7 million, down 2% year on year. This print exceeded analysts’ expectations by 0.7%. Despite the top-line beat, it was still a slower quarter for the company with a significant miss of analysts’ EPS estimates.
“Fourth quarter results reconfirmed the delivery of a breakout year in fiscal 2024 as we continue to transform this business. Our One BrightView culture is gaining traction, and we are positioned for fiscal 2025 to be a second consecutive record year,” said BrightView President and Chief Executive Officer Dale Asplund.
BrightView delivered the weakest full-year guidance update of the whole group. Unsurprisingly, the stock is down 17.3% since reporting and currently trades at $15.10.
Is now the time to buy BrightView? Find out by reading the original article on StockStory, it’s free.
Best Q3: Aris Water (NYSE:ARIS)
Primarily serving the oil and gas industry, Aris Water (NYSE:ARIS) is a provider of water handling and recycling solutions.Aris Water reported revenues of $112.3 million, up 12.5% year on year, outperforming analysts’ expectations by 8.6%. The business had an exceptional quarter with a solid beat of analysts’ sales volume estimates and EBITDA estimates.
Aris Water pulled off the biggest analyst estimates beat among its peers. The market seems happy with the results as the stock is up 66.6% since reporting. It currently trades at $27.66.
Weakest Q3: Perma-Fix (NASDAQ:PESI)
Tackling hazardous waste challenges since 1990, Perma-Fix (NASDAQ:PESI) provides environmental waste treatment services.Perma-Fix reported revenues of $16.81 million, down 23.2% year on year, falling short of analysts’ expectations by 2.3%. It was a disappointing quarter as it posted a significant miss of analysts’ EBITDA and EPS estimates.
Perma-Fix delivered the slowest revenue growth in the group. As expected, the stock is down 27.3% since the results and currently trades at $10.67.
Montrose (NYSE:MEG)
Founded to protect a tree-lined two-lane road, Montrose (NYSE:MEG) provides air quality monitoring, environmental laboratory testing, compliance, and environmental consulting services.Montrose reported revenues of $178.7 million, up 6.4% year on year. This print missed analysts’ expectations by 3.7%. More broadly, it was a mixed quarter as it also produced an impressive beat of analysts’ adjusted operating income estimates but a significant miss of analysts’ organic revenue estimates.
Montrose pulled off the highest full-year guidance raise among its peers. The stock is down 10.6% since reporting and currently trades at $21.76.
Tetra Tech (NASDAQ:TTEK)
Originally founded to focus on Alaska’s oil pipelines, Tetra Tech (NASDAQ:TTEK) provides consulting and engineering services to the water and infrastructure industries.Tetra Tech reported revenues of $1.14 billion, up 8.2% year on year. This result beat analysts’ expectations by 0.8%. Taking a step back, it was a mixed quarter as it also logged a solid beat of analysts’ adjusted operating income estimates but full-year EPS guidance missing analysts’ expectations significantly.
The stock is down 11.1% since reporting and currently trades at $42.10.
Market Update
Thanks to the Fed's series of rate hikes in 2022 and 2023, inflation has cooled significantly from its post-pandemic highs, drawing closer to the 2% goal. This disinflation has occurred without severely impacting economic growth, suggesting the success of a soft landing. The stock market has thrived in 2024, spurred by recent rate cuts (0.5% in September and 0.25% each in November and December), and a notable surge followed Donald Trump's presidential election win in November, propelling indices to historic highs. Nonetheless, the outlook for 2025 remains clouded by the pace and magnitude of future rate cuts as well as potential changes in trade policy and corporate taxes once the Trump administration takes over. The path forward is marked by uncertainty.Want to invest in winners with rock-solid fundamentals? Check out our and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.
This content was originally published on Stock Story
