Casella Waste Systems (NASDAQ:CWST) Shares Gap Up on Strong Earnings

Key Points

• Shares jumped premarket after Casella reported stronger-than-expected results—EPS $0.20 vs. $0.10 estimate and revenue $457.33M (up 9.6% YoY)—with the stock opening at $84.82 after a $79.25 close.
• Analysts maintain a consensus Moderate Buy with a $111 target, while broker price targets and ratings range from neutral to strong-buy (several buy/strong-buy calls and one sell).
• Insiders have been selling recently (CEO sold 988 shares at ~$87.81; CAO sold 675 at ~$92.61; 15,830 shares sold in the past 90 days), the company has a $5.53B market cap and a very high P/E of about 728, and the report cites insider ownership at 3.81% versus institutional ownership at 99.51%.

Casella Waste Systems, Inc. (NASDAQ:CWST - Get Free Report) shares gapped up prior to trading on Friday following a stronger than expected earnings report. The stock had previously closed at $79.25, but opened at $84.82. Casella Waste Systems shares last traded at $86.2450, with a volume of 182,340 shares trading hands.

The industrial products company reported $0.20 earnings per share (EPS) for the quarter, beating the consensus estimate of $0.10 by $0.10. Casella Waste Systems had a net margin of 0.43% and a return on equity of 5.17%. The business had revenue of $457.33 million during the quarter, compared to analyst estimates of $454.49 million. During the same quarter in the previous year, the business earned $0.19 EPS. Casella Waste Systems's quarterly revenue was up 9.6% compared to the same quarter last year.

Analyst Upgrades and Downgrades

A number of brokerages recently weighed in on CWST. Jefferies Financial Group set a $120.00 price objective on Casella Waste Systems and gave the company a "buy" rating in a research note on Tuesday, January 6th. JPMorgan Chase & Co. lowered their price target on Casella Waste Systems from $112.00 to $110.00 and set a "neutral" rating on the stock in a report on Monday, February 23rd. UBS Group lowered their price target on Casella Waste Systems from $140.00 to $130.00 and set a "buy" rating on the stock in a report on Tuesday, March 10th. Raymond James Financial reaffirmed a "strong-buy" rating and set a $115.00 price objective on shares of Casella Waste Systems in a report on Monday, February 23rd. Finally, Weiss Ratings downgraded shares of Casella Waste Systems from a "hold (c-)" rating to a "sell (d)" rating in a report on Monday, February 23rd. Two analysts have rated the stock with a Strong Buy rating, seven have assigned a Buy rating, two have assigned a Hold rating and one has given a Sell rating to the company. Based on data from MarketBeat.com, the company presently has a consensus rating of "Moderate Buy" and a consensus target price of $111.00.

Insiders Place Their Bets

In other news, CEO Edmond Coletta sold 988 shares of the firm's stock in a transaction dated Monday, March 16th. The stock was sold at an average price of $87.81, for a total value of $86,756.28. Following the sale, the chief executive officer directly owned 152,618 shares of the company's stock, valued at approximately $13,401,386.58. This trade represents a 0.64% decrease in their ownership of the stock. The sale was disclosed in a document filed with the SEC, which can be accessed through this hyperlink. Also, CAO Kevin Drohan sold 675 shares of the firm's stock in a transaction dated Friday, February 27th. The shares were sold at an average price of $92.61, for a total value of $62,511.75. Following the completion of the sale, the chief accounting officer directly owned 7,462 shares in the company, valued at approximately $691,055.82. This represents a 8.30% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. In the last ninety days, insiders sold 15,830 shares of company stock valued at $1,454,208. 3.81% of the stock is owned by company insiders.

Hedge Funds Weigh In On Casella Waste Systems

Large investors have recently bought and sold shares of the stock. Hilton Head Capital Partners LLC acquired a new position in Casella Waste Systems during the 4th quarter valued at $25,000. Smartleaf Asset Management LLC raised its position in shares of Casella Waste Systems by 180.2% during the third quarter. Smartleaf Asset Management LLC now owns 297 shares of the industrial products company's stock valued at $27,000 after buying an additional 191 shares during the last quarter. Geneos Wealth Management Inc. raised its position in shares of Casella Waste Systems by 301.6% during the first quarter. Geneos Wealth Management Inc. now owns 245 shares of the industrial products company's stock valued at $27,000 after buying an additional 184 shares during the last quarter. Los Angeles Capital Management LLC acquired a new position in shares of Casella Waste Systems during the fourth quarter valued at about $27,000. Finally, First Horizon Corp acquired a new position in shares of Casella Waste Systems during the third quarter valued at about $31,000. 99.51% of the stock is currently owned by institutional investors and hedge funds.

Casella Waste Systems Price Performance

The stock's 50-day moving average price is $85.11 and its 200 day moving average price is $92.91. The firm has a market cap of $5.53 billion, a price-to-earnings ratio of 727.89 and a beta of 0.84. The company has a quick ratio of 1.26, a current ratio of 1.26 and a debt-to-equity ratio of 0.72.

About Casella Waste Systems

Casella Waste Systems, Inc is a regional resource management company headquartered in Rutland, Vermont. Established in 1975, the company has grown from a single-truck operation into a multi-state provider of integrated waste management solutions. Casella offers a comprehensive range of services, including residential, commercial and industrial waste collection, transfer station operations, landfill disposal, recycling processing and organics management.

Through a network of solid waste transfer stations, recycling facilities and landfills, Casella serves communities primarily across the northeastern United States and parts of the mid-Atlantic region.

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