A month has gone by since the last earnings report for Waste Connections (WCN Quick QuoteWCN - Free Report) . Shares have added about 1.9% in that time frame, underperforming 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 the most recent earnings report in order to get a better handle on the important drivers.

Waste Connections Surpasses Q1 Earnings Estimates, Revenues Miss

Waste Connections reported mixed first-quarter 2020 results, wherein earnings surpassed the Zacks Consensus Estimate but revenues missed the same.

Adjusted earnings of 65 cents per share beat the consensus estimate by 3.2% and increased 4.8% year over year. Revenues of $1.35 billion however missed the consensus mark marginally but improved 8.7% year over year.

So far this year, shares of Waste Connections have gained 3% against 22.9% decline of the industry it belongs to

Revenues by Segment

Solid Waste Collection segment revenues increased 9.4% year over year to $985.61 million. The segment accounted for 72.9% of total revenues.

Solid Waste Disposal and Transfer segment revenues increased 7.9% from the year-ago quarter to $259.92 million. The segment contributed 19.2% to total revenues.

E&P Waste Treatment, Recovery and Disposal segment revenues decreased 5.9% from the year-ago quarter to $59.35 million. The segment contributed 4.4% to total revenues.

Intermodal and Other segment revenues declined 7.1% to $29.98 million. The segment accounted for 2.2% of total revenues.

Solid Waste Recycling segment revenues declined 9% year over year to $17.56 million. The segment accounted for 1.3% of total revenues.

Operating Results

Adjusted EBITDA in the reported quarter was $408.52 million compared with $385.71 million in the year-ago quarter. Adjusted EBITDA margin came in at 30.2% compared with 31% in the year-ago quarter. 

Operating income totaled $216.96 million compared with $184.86 million in the year-ago quarter. Operating margin was 16% compared with 14.9% in the year-ago quarter. 

Balance Sheet and Cash Flow

Waste Connections exited first-quarter 2020 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 $369.59 million of cash from operating activities in the reported quarter. Adjusted free cash flow was $235.72 million. Capital expenditure totaled $137.78 million.

Waste Connections paid out dividend of $48.02 million in the reported quarter.

2020 View

Considering the current uncertainty prevailing in the market on the back of coronavirus outbreak, Waste Connections suspended its full-year 2020 guidance. The company plans to update its full-year guidance during its second-quarter 2020 results.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed an upward trend in fresh estimates.

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

Estimates have been broadly trending upward for the stock, and the magnitude of these revisions has been net zero. Notably, Waste Connections has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.