A month has gone by since the last earnings report for Waste Connections (WCN Quick QuoteWCN - Free Report) . Shares have lost about 18.4% in that time frame, outperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Waste Connections due for a breakout? 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 Connections Beats on Q4 Earnings

Waste Connections reported solid fourth-quarter 2019 results, wherein the company’s earnings and revenues surpassed the Zacks Consensus Estimate.

Adjusted earnings of 69 cents per share beat the consensus estimate by 11.3% and increased 9.5% year over year. Revenues of $1.36 billion beat the consensus mark by 1.5% and improved 7.9% year over year.

Revenues by Segment

Solid Waste Collection segment revenues increased 11.4% year over year to $972.39 million. The segment accounted for 71.4% of total revenues.

Solid Waste Disposal and Transfer segment revenues increased 4.9% from the year-ago quarter to $283.37 million. The segment contributed 20.8% to total revenues.

E&P Waste Treatment, Recovery and Disposal segment revenues decreased 2.3% from the year-ago quarter to $62.48 million. The segment contributed 4.6% to total revenues.

Intermodal and Other segment revenues declined 9.1% to $30.52 million. The segment accounted for 2.2% of total revenues.

Solid Waste Recycling segment revenues declined 69.6% year over year to $13.20 million. The segment accounted for 1% of total revenues.

Operating Results

Adjusted EBITDA in the fourth quarter was $419 million compared with $397.19 million in the year-ago quarter. Adjusted EBITDA margin came in at 30.8% compared with 31.5% in the year-ago quarter. 

Operating income totaled $194.18 million compared with $199.98 million in the year-ago quarter. Operating margin was 14.3% compared with 15.8% in the year-ago quarter. 

Balance Sheet and Cash Flow

Waste Connections exited fourth-quarter 2019 with cash and cash equivalents of $326.74 million compared with $303.78 million at the end of the prior quarter. Long-term debt was $4.35 billion compared with $4.04 billion at the end of the prior quarter.

The company generated $355.12 million of cash from operating activities in the reported quarter. Adjusted free cash flow was $153.84 million and capital expenditures totaled $200.88 million.

Waste Connections paid out dividend of $48.72 million in the reported quarter.

2020 Outlook

Waste Connections unveiled its guidance for 2020. The company expects revenues in the range of $5.725-$5.775 billion.

Adjusted EBITDA is expected in the range of $1.760-$1.785 billion (indicating 30.7%-30.9% of revenues). Net cash provided by operating activities is anticipated to be $1.600-$1.625 billion. Capital expenditures are expected at $625 million. Adjusted free cash flow is expected to be $975.0 million-$1.0 billion.

How Have Estimates Been Moving Since Then?

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

VGM Scores

At this time, Waste Connections 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 D on the value side, putting it in the bottom 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of C. 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.