It has been about a month since the last earnings report for Waste Management (WM - Free Report) . Shares have added about 2.6% 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 Management due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Waste Management Surpasses Q1 Earnings & Revenue Estimates
Waste Management reported solid first-quarter 2021 results, wherein the company’s earnings and revenues surpassed the Zacks Consensus Estimate.
Adjusted earnings per share of $1.06 beat the Zacks Consensus Estimate by 6% and improved 13.9% year over year. Total revenues of $4.11 billion beat the consensus estimate by 1.8% and increased 10.3% year over year.
In the reported quarter, the company witnessed $292 million of revenues from the acquisition of Advanced Disposal and $93 million of growth from yield.
Quarterly Numbers in Detail
The Collection segment recorded revenues of $2.77 billion, up 10.1% from the prior-year quarter’s figure. Landfill segment’s top line grew 3.2% year over year to $915 million. Total revenues in the Transfer segment were up 5.4% to $465 million. Recycling segment revenues increased 34.7% to $342 million. Other businesses’ revenues totaled $477 million, up 10.9% year over year.
Adjusted operating EBITDA of $1.16 billion increased 14.6% from the year-ago quarter’s level. Adjusted operating EBITDA margin rose to 28.2% from 27.2% in the prior-year quarter.
Adjusted operating income came in at $689 million, up 12.8% from the year-ago quarter. Adjusted operating income margin rose to 16.8% from 16.4% in the year-ago quarter.
Waste Management exited first-quarter 2021 with cash and cash equivalents of $476 million compared with $553 million at the end of the prior quarter. Long-term debt was $13.2 billion compared with $13.3 billion at the end of the prior quarter.
The company generated $1.12 billion of cash from operating activities while capital expenditures were $270 million. Free cash flow was $865 billion.
During the reported quarter, the company returned $497 million to shareholders, which includes $247 million through cash dividends and $250 million through share repurchases.
2021 Outlook
Waste Management has raised its outlook for 2021. Total revenue growth is now expected to be 12.5% to 13% compared with the prior growth rate of 10.75% to 11.25%. Combined internal revenue growth from yield and volume in the collection and disposal business is expected to be 4.5% or higher. The growth rate was earlier expected between 4% and 4.5%.
Adjusted operating EBITDA is now expected to be between $4.875 billion and $4.975 billion compared with the prior-guided range of $4.75 -$4.9 billion.
Free cash flow is now estimated to be between $2.325 billion and $2.425 billion compared with the prior-guided range of $2.25-$2.35 billion.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates.
VGM Scores
Currently, Waste Management has a great Growth Score of A, though it is lagging a bit on the Momentum Score front with a B. Following the exact same course, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Waste Management has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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It has been about a month since the last earnings report for Waste Management (WM - Free Report) . Shares have added about 2.6% 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 Management due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Waste Management Surpasses Q1 Earnings & Revenue Estimates
Waste Management reported solid first-quarter 2021 results, wherein the company’s earnings and revenues surpassed the Zacks Consensus Estimate.
Adjusted earnings per share of $1.06 beat the Zacks Consensus Estimate by 6% and improved 13.9% year over year. Total revenues of $4.11 billion beat the consensus estimate by 1.8% and increased 10.3% year over year.
In the reported quarter, the company witnessed $292 million of revenues from the acquisition of Advanced Disposal and $93 million of growth from yield.
Quarterly Numbers in Detail
The Collection segment recorded revenues of $2.77 billion, up 10.1% from the prior-year quarter’s figure. Landfill segment’s top line grew 3.2% year over year to $915 million. Total revenues in the Transfer segment were up 5.4% to $465 million. Recycling segment revenues increased 34.7% to $342 million. Other businesses’ revenues totaled $477 million, up 10.9% year over year.
Adjusted operating EBITDA of $1.16 billion increased 14.6% from the year-ago quarter’s level. Adjusted operating EBITDA margin rose to 28.2% from 27.2% in the prior-year quarter.
Adjusted operating income came in at $689 million, up 12.8% from the year-ago quarter. Adjusted operating income margin rose to 16.8% from 16.4% in the year-ago quarter.
Waste Management exited first-quarter 2021 with cash and cash equivalents of $476 million compared with $553 million at the end of the prior quarter. Long-term debt was $13.2 billion compared with $13.3 billion at the end of the prior quarter.
The company generated $1.12 billion of cash from operating activities while capital expenditures were $270 million. Free cash flow was $865 billion.
During the reported quarter, the company returned $497 million to shareholders, which includes $247 million through cash dividends and $250 million through share repurchases.
2021 Outlook
Waste Management has raised its outlook for 2021. Total revenue growth is now expected to be 12.5% to 13% compared with the prior growth rate of 10.75% to 11.25%. Combined internal revenue growth from yield and volume in the collection and disposal business is expected to be 4.5% or higher. The growth rate was earlier expected between 4% and 4.5%.
Adjusted operating EBITDA is now expected to be between $4.875 billion and $4.975 billion compared with the prior-guided range of $4.75 -$4.9 billion.
Free cash flow is now estimated to be between $2.325 billion and $2.425 billion compared with the prior-guided range of $2.25-$2.35 billion.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates.
VGM Scores
Currently, Waste Management has a great Growth Score of A, though it is lagging a bit on the Momentum Score front with a B. Following the exact same course, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Waste Management has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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