Let’s dig into the relative performance of Perma-Fix (NASDAQ: PESI) and its peers as we unravel the now-completed Q2 waste management earnings season.
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 9 waste management stocks we track reported a slower Q2. As a group, revenues missed analysts’ consensus estimates by 0.7%.
In light of this news, share prices of the companies have held steady as they are up 3.8% on average since the latest earnings results.
Perma-Fix (NASDAQ: PESI)
Tackling hazardous waste challenges since 1990, Perma-Fix (NASDAQ: PESI) provides environmental waste treatment services.
Perma-Fix reported revenues of $14.59 million, up 4.3% year on year. This print fell short of analysts’ expectations by 11.1%. Overall, it was a softer quarter for the company with a miss of analysts’ EBITDA estimates.
Mark Duff, President and CEO of the Company, commented, “We delivered both sequential and year-over-year revenue growth in the second quarter, accompanied by improved gross margin—reflecting continued progress on our operational initiatives. Treatment Segment revenue increased approximately 37.0% year-over-year, although results were tempered by technical challenges that limited production early in the quarter. We believe that these issues have been resolved through automation and process enhancements, and we expect to realize benefit of these improvements in the second half of the year.
Interestingly, the stock is up 9.5% since reporting and currently trades at $12.19.
Read our full report on Perma-Fix here, it’s free.
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 $234.5 million, up 35.3% year on year, outperforming analysts’ expectations by 24.4%. The business had an incredible quarter with a solid beat of analysts’ organic revenue estimates and a beat of analysts’ EPS estimates.
Montrose achieved the biggest analyst estimates beat, fastest revenue growth, and highest full-year guidance raise among its peers. The market seems happy with the results as the stock is up 31.2% since reporting. It currently trades at $29.67.
Is now the time to buy Montrose? Access our full analysis of the earnings results here, it’s free.
Weakest Q2: 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 $562.3 million, down 7.8% year on year, falling short of analysts’ expectations by 2.5%. It was a disappointing quarter as it posted full-year EBITDA guidance missing analysts’ expectations significantly and a significant miss of analysts’ EBITDA estimates.
Interestingly, the stock is up 34.1% since the results and currently trades at $11.63.
Read our full analysis of Enviri’s results here.
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 $59.54 million, down 18.6% year on year. This number came in 17.9% below analysts' expectations. Overall, it was a disappointing quarter as it also produced a significant miss of analysts’ EBITDA estimates and a significant miss of analysts’ EPS estimates.
Quest Resource had the weakest performance against analyst estimates and slowest revenue growth among its peers. The stock is down 11.2% since reporting and currently trades at $1.74.
Read our full, actionable report on Quest Resource here, it’s free.
Casella Waste Systems (NASDAQ: CWST)
Starting with the founder picking up garbage with a pickup truck he purchased using savings from high school, Casella (NASDAQ: CWST) offers waste management services for businesses, residents, and the government.
Casella Waste Systems reported revenues of $465.3 million, up 23.4% year on year. This print surpassed analysts’ expectations by 2.4%. Zooming out, it was a mixed quarter as it also recorded full-year revenue guidance slightly topping analysts’ expectations but a significant miss of analysts’ adjusted operating income estimates.
The stock is down 14.2% since reporting and currently trades at $93.24.
Read our full, actionable report on Casella Waste Systems here, it’s free.
Market Update
As a result of the Fed’s rate hikes in 2022 and 2023, inflation has come down from frothy levels post-pandemic. The general rise in the price of goods and services is trending towards the Fed’s 2% goal as of late, which is good news. The higher rates that fought inflation also didn't slow economic activity enough to catalyze a recession. So far, soft landing. This, combined with recent rate cuts (half a percent in September 2024 and a quarter percent in November 2024) have led to strong stock market performance in 2024. The icing on the cake for 2024 returns was Donald Trump’s victory in the U.S. Presidential Election in early November, sending major indices to all-time highs in the week following the election. Still, debates around the health of the economy and the impact of potential tariffs and corporate tax cuts remain, leaving much uncertainty around 2025.
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