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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Casella Waste Systems, Inc. (XNAS:CWST) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
CWST
Name:
CASELLA WASTE SYSTEMS, INC. (XNAS:CWST)
Sector:
11.80M
Industry:
Waste Management
CEO:
Mr. John Casella
Total Employees:
2,900
Our Technological Advancement Rating
Our Rating:
D
Technological advancement compared to industry is -512.47% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF CASELLA WASTE SYSTEMS, INC.(CWST) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND WASTE MANAGEMENT INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
80.71
One Month Price Target:
$81.15
Six Month Price Target :
$83.35
Likely Price in One Year's Time:
Ticker:
$85.98
Likely Trading Range Today Under (Normal Volatility)
$80.49
Price Upper limit ($) :
$81.1
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$77.1
This week:
$72.64
This month :
$64.56
Other Primary facts
Market Cap:
4.20B
Market Cap Classification:
Mid Cap
Number of Shares
IPO Date:
51.68M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
17.06%
-16.27%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$97.45
$89.65
$63.97
$71.77
Medium risk (<10%) entry points
Buy Call
Sell Call
$87.12
Buy Put:
Sell Put:
$85.45
$74.28
$75.97
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
CWST
Sharpe Ratio:
4.19%
Comparison:
CWST, is amongst the top 20% stocks with highest risk-adjusted returns
Sharpe ratio is 73.49% higher than the industry
& ratio is 83.75% higher than the market/S&P 500 average
Average Returns/Yield of
CWST
Daily returns:
0.10%
Weekly returns:
0.51%
Monthly returns:
2.04%
Yearly returns:
15.29%
Comparison of returns:
Average annual returns/yield (last 3 years) is 60.38% above industry average
Classification:
CWST, is amongst the top 20% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.95
Statistical test of Returns:
CWST has not yielded statistically significant higher returns when compared to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
2.23%
Weekly Volatility:
4.98%
Monthly Volatility:
9.97%
Yearly Volatility:
34.52%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
0.31%
Volatility in last five trading days has been -85.90% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-4.47%
Weekly VaR:
-10.00%
Monthly VaR:
-20.01%
How Much Can the price of
CWST
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-17%
Worst case (decline):
-69.31%
This translates to price declining to:
$67.38
This translates to price declining to:
$24.77
Severe Crash Probability
Risk of crash in next 6/12 months: Very high (>70%)
What is Value at Risk (VaR)?
Risk Fundamentals
CWST is a 41.22% riskier investment compared to the market/S&P 500 & is 20.99% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -16.58% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
CWST
Beta in relation to market/S&P 500--0.97
Expected beta in 1 year's time:
0.726
Expected beta in 3 year's time:
1.027
Unlevered (debt free) Beta:
0.478
Beta in relation to Nasdaq (XNAS):
0.482
Beta in relation to all global stocks::
0.794
Beta Comparison & Analysis
Beta of competitors/peers::
1.507
Beta is -35.48% lower than peers
Average Industry Beta:
1.031
Beta is -5.72% below industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
24.77%
Sustainable growth rate is 94.59% above industry average
Alpha provided | Alpha Analysis
Alpha provided:
0.147
Alpha is 189.82% above industry average alpha yield
Alpha is 937% higher than market/& is unsustainably high
Analysis of Cost of Capital of
CWST
Equity cost of capital:
0.098
Equity cost of capital is -3.96% below industry mean WACC
Unlevered (without debt) cost of capital:
4.83%
Before-tax cost of debt:
2.86%
After-tax cost of debt:
2.26%
Overall debt rating:
High AA grade (second highest grade)
Weighted average cost of capital (WACC):
2.26%
WACC is -10.38% below industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$18.07
Revenue growth rate per share of (3Y):
9.59
Annual revenue growth rate is 16.93% above the industry average
EPS:
$0.79
Expected Annual growth rate of EPS (3Y):
6.09%
Expected future EPS growth rate is 40.64% higher than the Waste Management industry
Free cash flow (FCF) per share:
$1.27
-
-
Debt per share
$11.98
EBITDA per share
$3.58
Valuation Analysis Today of
CWST
P/E Ratio:
88.83
P/E Ratio of Competitors/Peers:
42.98
P/E ratio is 106.67% higher than main peers & is 256.04% higher than the industry
Stock price/value with industry average P/E ratio: $19.71
CWST is 309.49% overvalued if valued using industry average P/E ratio
-
-
P/S (Price to Sales ratio):
4.47
Price to sales ratio is 85.08% above the industry mean
P/B (Price to book value ratio):
9.59
Price to free cash flow: 63.64
Price to free cash flow ratio is 111.26% higher than the industry
Net income growth rate (3Y):
431.79%
Net income growth rate is 596.55% higher than the average industry net income growth rate
Dividend Analysis
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Dividend History:
--$0.00
--$0.00
--$0.00
--$0.00
--$0.00
--$0.00
-
In-depth Debt & Leverage Analysis
Debt to equity ratio:
142.25%
Net debt to equity ratio:
143.26%
Debt to assets ratio:
47.35%
Net debt to assets ratio:
47.69%
Debt-to-asset ratio is -23.09% below industry average
Ability to repay debt:
Interest coverage ratio:
10.17
Interest coverage ratio is -3.50% less than industry average
Looking forward:
Debt growth rate:
1.13%
Annual debt growth is -89% lower than industry average debt growth rate
Debt repayment rate in last quarter: 1.44%
Analysis of Key Statistics
Correlation of price movement with the market:
0.469
Statistical significance of correlation:
CWST has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.559
Stock price is -16.06% less correlated with the market compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.559
Correlation of price movement with Nasdaq (^IXIC):
-0.005
Covariance of price movement with the market:
-0.007
Kurtosis
11.89
Returns have a significant fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are more probable, compared to assets with normally distributed returns
Skewness of returns:
0.017
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
CWST
Gross Profit Margin Ratio:
135%
Operating Profit Margin Ratio:
8.12%
Operating profit margin is 40.05% higher than the industry
Net Profit Margin Ratio:
135%
Effective Tax Rate:
27.41%
Effective tax rate is 12.13% higher than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
9.42%
Return on equity (ROE) is -18.79% lower than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
3.14%
Return on assets (ROA) is -23.06% lower than the industry
Financial Leverage:
1.9x
Current Ratio:
0.93
Current ratio is -31.77% below industry average
Cash Conversion Cycle (days):
-2.3
Cash conversion cycle is -104.68% below industry average
The remaining useful life of property plant & equipment is: 4.7 years
Stock based compensation to net income ratio:
5.47%
In-depth Efficiency Analysis
Revenue generated per employee:
322.0K
Each employee generates 5% more revenue than industry average revenue per employee
EBITDA generated per employee:
63.8K
Each employee generates 6% more EBITDA than industry average revenue per employee
Profit generated per employee:
14.1K
Each employee generates -34% less net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
4.1K
Each employee generates -30% less free cash flow than industry average revenue per employee
Assets/Capital per employee
404.5K
Each employee generates -30% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
CWST
FRANKLIN ELECTRIC CO., INC. (XNAS:FELE)
AAON, INC. (XNAS:AAON)
BEACON ROOFING SUPPLY, INC. (XNAS:BECN)
ANDAW
BALLARD POWER SYSTEMS INC. (XNAS:BLDP)
JETBLUE AIRWAYS CORPORATION (XNAS:JBLU)
ROCKET LAB USA, INC. (XNAS:RKLB)
ADVANCED ENERGY INDUSTRIES, INC. (XNAS:AEIS)
ALTRA INDUSTRIAL MOTION CORP. (XNAS:AIMC)
Current Analyst Ratings
Strong buy�4%
Buy�8%
Hold�8%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: Buy
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
933.71M
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
617.72M
315.99M
-
121.50M
121.50M
-
111.26M
232.76M
278.00K
18.18M
110.34M
184.97M
75.82M
40.98M
56.45M
15.47M
40.98M
Statement of Cash Flow
Date:
Period:
29.43M
Differed Income Tax :
534.00K
Stock Based Compensation :
2.24M
Change in Working Capital :
- 18124.00K
Accounts Receivables:
-
Other Working Capital:
-
Other Non-Cash Items:
6.45M
Net Cash Provided by Operating Activities:
24.71M
Investments in PP&E:
- 12910.00K
Net Acquisitions:
- 49757.00K
Purchases of Investments:
-
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
3/31/22
2022
Q1
12.59M
-
12.59M
93.24M
-
28.15M
133.99M
740.65M
258.41M
100.86M
-
-
73.06M
1.17B
-
1.31B
65.24M
17.00M
-
-
61.31M
143.55M
618.86M
109.52M
728.37M
-
871.92M
-
-
1.0M
-
March 31, 2022 at 6:00:00 AM
850.48M
435.05M
1.31B
-
635.85M
623.3M
-
145.00K
- 62522.00K
- 9014.00K
-
-
-
25.61M
16.59M
-
- 21215.00K
12.59M
33.81M
24.71M
- 12910.00K
11.80M
Our Proprietary Portfolio Rating
Our Rating:
D
Price Forecast/Expected Price in Next 5 Years of
CWST
2023
2024
2025
2026
2027
$81.36
$86.67
$92.33
$98.37
$104.79