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Republic Services (RSG) Up 9.8% Since Last Earnings Report: Can It Continue?
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A month has gone by since the last earnings report for Republic Services (RSG - Free Report) . Shares have added about 9.8% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Republic Services 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.
Repuclic Services Beats Q3 Earnings Estimates
Republic Services reported mixed third-quarter 2024 results, wherein earnings surpassed the Zacks Consensus Estimate, while revenues missed the same.
RSG’s earnings per share (excluding 1 cent from non-recurring items) of $1.8 outpaced the Zacks Consensus Estimate by 11.7% and grew 17.5% from the year-ago quarter. Revenues of $4.1 billion missed the consensus mark by a slight margin, while it increased 6.5% on a year-over-year basis.
The top line has grown on the back of innovative technology in RSG’s recycling and waste collection routes, the development of polymer centers and Blue Polymers joint venture facilities, and advancements in fleet electrification.
Republic Services' Segmental Revenues
Revenues from Collection totaled $2.7 billion, up 4.8% from the year-ago quarter, missing our projection of $2.8 billion.
Revenues (net) in the Transfer and Landfill segments were $211.6 million and $452.8 million, increasing 2.6% and 3.8% on a year-over-year basis, respectively. The Transfer and Landfill segments’ revenues outpaced our expectations of $207.1 million and $448.5 million, respectively.
The Other segment’s revenues of $205.3 million rose 26.7% from the year-ago quarter’s actual and surpassed our estimate of $192.3 million. Environmental solutions’ revenues (net) of $464.7 million grew 14.8% year over year and beat our projection of $451.6 million. The rollover contribution of acquisitions completed in the preceding year drove this segment’s revenues.
Operating Results fo RSG
Adjusted EBITDA for the quarter was $1.3 billion, increasing 13.8% from the year-ago quarter, meeting our estimate. The adjusted EBITDA margin was 32%, up 210 basis points from the year-ago quarter, missing our projection of 32.7%.
Balance Sheet & Cash Flow of RSG
Republic Services exited the third quarter of 2024 with cash and cash equivalents of $83.4 million compared with $490.6 million at the end of the second quarter of 2024. The long-term debt (net of current maturities) was $12 billion compared with $11.5 billion at the end of the preceding quarter.
RSG generated $1 billion in cash from operating activities in the third quarter of 2024. The adjusted free cash flow was $585.1 million. Capital expenditure was $439.5 million.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended downward during the past month.
The consensus estimate has shifted -6.28% due to these changes.
VGM Scores
At this time, Republic Services has a nice Growth Score of B, 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 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, Republic Services has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Republic Services belongs to the Zacks Waste Removal Services industry. Another stock from the same industry, Pentair plc (PNR - Free Report) , has gained 9.7% over the past month. More than a month has passed since the company reported results for the quarter ended September 2024.
Pentair reported revenues of $993.4 million in the last reported quarter, representing a year-over-year change of -1.5%. EPS of $1.09 for the same period compares with $0.94 a year ago.
Pentair is expected to post earnings of $1.02 per share for the current quarter, representing a year-over-year change of +17.2%. Over the last 30 days, the Zacks Consensus Estimate has changed 0%.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Pentair. Also, the stock has a VGM Score of C.
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Republic Services (RSG) Up 9.8% Since Last Earnings Report: Can It Continue?
A month has gone by since the last earnings report for Republic Services (RSG - Free Report) . Shares have added about 9.8% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Republic Services 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.
Repuclic Services Beats Q3 Earnings Estimates
Republic Services reported mixed third-quarter 2024 results, wherein earnings surpassed the Zacks Consensus Estimate, while revenues missed the same.
RSG’s earnings per share (excluding 1 cent from non-recurring items) of $1.8 outpaced the Zacks Consensus Estimate by 11.7% and grew 17.5% from the year-ago quarter. Revenues of $4.1 billion missed the consensus mark by a slight margin, while it increased 6.5% on a year-over-year basis.
The top line has grown on the back of innovative technology in RSG’s recycling and waste collection routes, the development of polymer centers and Blue Polymers joint venture facilities, and advancements in fleet electrification.
Republic Services' Segmental Revenues
Revenues from Collection totaled $2.7 billion, up 4.8% from the year-ago quarter, missing our projection of $2.8 billion.
Revenues (net) in the Transfer and Landfill segments were $211.6 million and $452.8 million, increasing 2.6% and 3.8% on a year-over-year basis, respectively. The Transfer and Landfill segments’ revenues outpaced our expectations of $207.1 million and $448.5 million, respectively.
The Other segment’s revenues of $205.3 million rose 26.7% from the year-ago quarter’s actual and surpassed our estimate of $192.3 million. Environmental solutions’ revenues (net) of $464.7 million grew 14.8% year over year and beat our projection of $451.6 million. The rollover contribution of acquisitions completed in the preceding year drove this segment’s revenues.
Operating Results fo RSG
Adjusted EBITDA for the quarter was $1.3 billion, increasing 13.8% from the year-ago quarter, meeting our estimate. The adjusted EBITDA margin was 32%, up 210 basis points from the year-ago quarter, missing our projection of 32.7%.
Balance Sheet & Cash Flow of RSG
Republic Services exited the third quarter of 2024 with cash and cash equivalents of $83.4 million compared with $490.6 million at the end of the second quarter of 2024. The long-term debt (net of current maturities) was $12 billion compared with $11.5 billion at the end of the preceding quarter.
RSG generated $1 billion in cash from operating activities in the third quarter of 2024. The adjusted free cash flow was $585.1 million. Capital expenditure was $439.5 million.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended downward during the past month.
The consensus estimate has shifted -6.28% due to these changes.
VGM Scores
At this time, Republic Services has a nice Growth Score of B, 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 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, Republic Services has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Republic Services belongs to the Zacks Waste Removal Services industry. Another stock from the same industry, Pentair plc (PNR - Free Report) , has gained 9.7% over the past month. More than a month has passed since the company reported results for the quarter ended September 2024.
Pentair reported revenues of $993.4 million in the last reported quarter, representing a year-over-year change of -1.5%. EPS of $1.09 for the same period compares with $0.94 a year ago.
Pentair is expected to post earnings of $1.02 per share for the current quarter, representing a year-over-year change of +17.2%. Over the last 30 days, the Zacks Consensus Estimate has changed 0%.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Pentair. Also, the stock has a VGM Score of C.