The end of an earnings season can be a great time to discover new stocks and assess how companies are handling the current business environment. Let’s take a look at how Rollins (NYSE:ROL) and the rest of the environmental and facilities services stocks fared in Q1.
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 8 environmental and facilities services stocks we track reported an ok Q1; on average, revenues beat analyst consensus estimates by 0.6%. while next quarter's revenue guidance was 0.6% above consensus. Stocks--especially those trading at higher multiples--had a strong end of 2023, but 2024 has seen periods of volatility. Mixed signals about inflation have led to uncertainty around rate cuts, but environmental and facilities services stocks have shown resilience, with share prices up 7.4% on average since the previous earnings results.
Rollins (NYSE:ROL) Operating under multiple brands like Orkin and HomeTeam Pest Defense, Rollins (NYSE:ROL) provides pest and wildlife control services to residential and commercial customers.
Rollins reported revenues of $748.3 million, up 13.7% year on year, topping analysts' expectations by 1.2%. It was a very strong quarter for the company, with an impressive beat of analysts' organic revenue estimates and a narrow beat of analysts' earnings estimates.
"The team delivered a strong first quarter with double-digit revenue across all major service lines and an improving margin and cash flow profile," said Jerry Gahlhoff, Jr., President and CEO.
The stock is up 14.6% since the results and currently trades at $49.15.
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Best Q1: Clean Harbors (NYSE:CLH) Having played a role in the cleanup of many historical oil spills, Clean Harbors (NYSE:CLH) provides environmental services like hazardous and non-hazardous waste disposal.
Clean Harbors reported revenues of $1.38 billion, up 5.3% year on year, outperforming analysts' expectations by 3%. It was a very good quarter for the company, with a solid beat of analysts' organic revenue estimates.
Clean Harbors achieved the biggest analyst estimates beat among its peers. The stock is up 15.8% since the results and currently trades at $219.55.
Weakest Q1: Stericycle (NASDAQ:SRCL) Having completed 500 acquisitions since its inception, Stericycle (NASDAQ:SRCL) provides waste disposal and sensitive information destruction services.
Stericycle reported revenues of $664.9 million, down 2.8% year on year, falling short of analysts' expectations by 1.7%. It was a weak quarter for the company, with a miss of analysts' organic revenue estimates.
Stericycle had the weakest performance against analyst estimates and slowest revenue growth in the group. The stock is up 16.2% since the results and currently trades at $57.95.
Waste Management (NYSE:NYSE:WM) Founded in 1968, Waste Management (NYSE:WM) specializes in waste collection, disposal, recycling, and environmental services across North America.
Waste Management reported revenues of $5.16 billion, up 5.5% year on year, falling short of analysts' expectations by 1.2%. It was a decent quarter for the company, with a solid beat of analysts' earnings estimates.
The stock is down 0.5% since the results and currently trades at $209.47.
ABM Industries (NYSE:ABM) Operating through its subsidiaries, ABM Industries (NYSE:ABM) provides janitorial, electrical, HVAC (heating, ventilation, air conditioning), and landscaping services.
ABM Industries reported revenues of $2.02 billion, up 1.7% year on year, in line with analysts' expectations. It was an ok quarter for the company, with a solid beat of analysts' organic revenue estimates.
The stock is up 5.2% since the results and currently trades at $50.25.
This content was originally published on Stock Story
