A month has gone by since the last earnings report for Clean Harbors (CLH Quick QuoteCLH - Free Report) . Shares have added about 5.1% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Clean Harbors 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 drivers.

Clean Harbors' Q1 Earnings Surpass Estimates

Clean Harborsreported solid first-quarter 2023 results, wherein both earnings and revenues surpassed the respective Zacks Consensus Estimate.

Adjusted earnings per share (excluding 3 cents from non-recurring items) of $1.36 outpaced the Zacks Consensus Estimate by 18.3%, our estimate by 10.6% and the year-ago quarter’s figure by 63.9%. Total revenues of $1.31 billion beat the Zacks Consensus Estimate by 5.4% and our estimate by 9.2%. Earnings grew 11.8% year over year.

 Revenues by Segment

The Environmental Services (ES) segment’s revenues of $1.04 billion, grew 15% year over year. The uptick was backed by higher volumes of high-value waste streams, pricing initiatives and strength in its Industrial Services businesses. The Safety-Kleen Sustainability Solutions (SKSS) segment’s revenues of $238.4 million, grew 9% year over year.  

Profitability Performance

Adjusted EBITDA of $215.1 million increased 19% year over year. The adjusted EBITDA margin rose to 16.5% from 15.4% in the year-ago quarter.

Segment-wise, ES’ adjusted EBITDA was $228.4 million, up 24% year over year. SKSS’ adjusted EBITDA was $41.4 million, down 20% year over year.

Balance Sheet & Cash Flow

Clean Harbors exited first-quarter 2023 with cash and cash equivalents of $304.3 million, compared with $492.6 million at the end of the prior quarter. Inventories and supplies were $322.4 million, compared with $324.9 million in the prior quarter. Long-term debt was $2.41 billion, flat with the prior quarter reported figure. CLH generated $28 million in net cash from operating activities in the reported quarter. Adjusted free cash flow was negative $51.8 million.

Guidance

For 2023, adjusted EBITDA is anticipated between $1.02 billion and $1.06 billion, up from the previous range of $1.01 billion and $1.05 billion. The rise reflects the company’s acquisition of Thompson Industrial Services. Adjusted free cash flow for the current year is expected between $305 million and $345 million. Net cash from operating activities is projected in the range of $705-$765 million.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in estimates review.

VGM Scores

At this time, Clean Harbors has a nice Growth Score of B, though it is lagging a bit on the Momentum Score front with a C. Charting a somewhat similar path, 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 B. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Clean Harbors has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.