A month has gone by since the last earnings report for Waste Connections (WCN Quick QuoteWCN - Free Report) . Shares have added about 4.2% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Waste Connections due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.

Waste Connections Surpasses Q4 Earnings & Revenues Estimates

Waste Connections reported better-than-expected fourth-quarter 2020 results.

Adjusted earnings of 68 cents per share beat the Zacks Consensus Estimate by 9.7% but decreased 1.5% year over year. Revenues of $1.39 billion beat the consensus mark by 4.1% and improved 2.7% year over year.

Acquisitions contributed $52.7 million to revenues in the reported quarter.

Revenues by Segment

Solid Waste Collection segment revenues increased 4.9% year over year to $1.02 billion. The segment accounted for 73% of total revenues.

Solid Waste Disposal and Transfer segment revenues increased 3.3% from the year-ago quarter to $292.82 million. The segment contributed 20.9% of total revenues.

Intermodal and Other segment revenues increased 9.3% to $33.36 million. The segment accounted for 2.4% of total revenues.

Solid Waste Recycling segment revenues improved 95.2% year over year to $25.78 million. The segment accounted for 1.9% of total revenues.

E&P Waste Treatment, Recovery and Disposal segment revenues decreased 59.1% from the year-ago quarter to $25.53 million. The segment contributed 1.8% to total revenues.

Operating Results

Adjusted EBITDA in the reported quarter was $426.55 million, up 1.8% from the year-ago quarter. Adjusted EBITDA margin came in at 30.5% compared with 30.8% in the year-ago quarter. 

Operating income totaled $197.14 million, up 1.5% from the year-ago quarter. Operating income margin came in at 14.1% compared with 14.3% in the year-ago quarter. 

Balance Sheet and Cash Flow

Waste Connections exited fourth-quarter 2020 with cash and cash equivalents of $617.29 million compared with $859.09 million at the end of the prior quarter. Long-term debt was $4.71 billion compared with $4.68 billion at the end of the prior quarter.

The company generated $222.95 million of cash from operating activities in the reported quarter. Adjusted free cash flow was $63.51 million. Capital expenditures totaled $176.36 million.

The company paid out dividend of $53.96 million in the reported quarter.

2021 Guidance

Waste Connections unveiled its guidance for 2021. The company expects revenues to be around $5.80 billion. The Zacks Consensus Estimate of $5.83 billion lies above the guidance.

Net income is expected to be around $669 million. Adjusted EBITDA is anticipated to be around $1.80 billion. Net cash provided by operating activities is estimated to be around $1.575 billion. Capital expenditures are expected to be nearly $625 million. Adjusted free cash flow is anticipated to be nearly $950 million.

How Have Estimates Been Moving Since Then?

It turns out, estimates review flatlined during the past month.

VGM Scores

Currently, Waste Connections has a subpar Growth Score of D, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Waste Connections has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.