Looking back on waste management stocks' Q2 earnings, we examine this quarter's best and worst performers, including Montrose (NYSE:MEG) and its peers.
Waste management companies can possess licenses permitting them to handle hazardous materials. Furthermore, many services are performed through contracts and statutorily mandated, non-discretionary, or recurring, leading to more predictable revenue streams. However, regulation can be a headwind, rendering existing services obsolete or forcing companies to invest precious capital to comply with new, more environmentally-friendly rules. Lastly, waste management companies are at the whim of economic cycles. Interest rates, for example, can greatly impact industrial production or commercial projects that create waste and byproducts.
The 8 waste management stocks we track reported a weak Q2. As a group, revenues missed analysts' consensus estimates by 1.9%.
Valuation multiples for many growth stocks have not yet reverted to their early 2021 highs, but the market was optimistic at the end of 2023 due to cooling inflation. This year has been a different story as mixed inflation signals have led to market volatility. However, waste management stocks have held steady amidst all this with average share prices relatively unchanged since the latest earnings results.
Best Q2: 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 $173.3 million, up 8.9% year on year. This print was in line with analysts' expectations, but overall, it was a weaker quarter for the company with a miss of analysts' earnings and organic revenue estimates.
Montrose Chief Executive Officer and Director, Vijay Manthripragada, commented, “We’re thrilled to build on our strong first quarter performance with another period of exceptional results. Broad-based strength across our business lines drove year-over-year growth in our key operating metrics. This resulted in record quarterly revenues and record Consolidated Adjusted EBITDA1, and year-over-year margin improvement across all three segments. We're especially pleased with our continued organic growth this quarter, fueled by the growing traction of our cross-selling initiatives. This strong organic growth, five highly accretive acquisitions completed so far this year, and ongoing secular tailwinds reinforce our confidence in our outlook.”
Interestingly, the stock is up 10.6% since reporting and currently trades at $32.36.
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Quest Resource (NASDAQ:QRHC) Recycling corporate waste to help companies be more sustainable, Quest Resource (NASDAQ:QRHC) is a provider of waste and recycling services.
Quest Resource reported revenues of $73.15 million, down 1.8% year on year, falling short of analysts' expectations by 4.6%. It performed better than its peers, but it was unfortunately a weak quarter for the company with a miss of analysts' earnings estimates.
Although it had a fine quarter compared its peers, the market seems unhappy with the results as the stock is down 9.3% since reporting. It currently trades at $7.57.
Weakest Q2: Perma-Fix (NASDAQ:PESI) Tackling hazardous waste challenges since 1990, Perma-Fix (NASDAQ:PESI) provides environmental waste treatment services.
Perma-Fix reported revenues of $13.99 million, down 44.1% year on year, falling short of analysts' expectations by 12%. It was a weak quarter for the company with a miss of analysts' earnings estimates.
Perma-Fix posted the weakest performance against analyst estimates and slowest revenue growth in the group. Interestingly, the stock is up 2.9% since the results and currently trades at $10.51.
Enviri (NYSE:NVRI) Cooling America’s first indoor ice rink in the 19th century, Enviri (NYSE:NVRI) offers steel and waste handling services.
Enviri reported revenues of $610 million, flat year on year, falling short of analysts' expectations by 1.1%. Overall, it was a weak quarter for the company with a miss of analysts' earnings estimates.
The stock is down 9.9% since reporting and currently trades at $10.66.
Clean Harbors (NYSE:CLH) Established in 1980, Clean Harbors (NYSE:CLH) provides environmental and industrial services like hazardous and non-hazardous waste disposal and emergency spill cleanups.
Clean Harbors reported revenues of $1.55 billion, up 11.1% year on year, surpassing analysts' expectations by 1.5%. Overall, it was a strong quarter for the company with a decent beat of analysts' earnings and organic revenue estimates.
Clean Harbors achieved the biggest analyst estimates beat among its peers. The stock is up 2.9% since reporting and currently trades at $230.93.
This content was originally published on Stock Story
