What Happened?
Shares of waste management company Casella (NASDAQ:CWST) fell 5% in the afternoon session after the company reported mixed fourth-quarter 2025 results that saw a drop in profitability, overshadowing an earnings per share (EPS) beat.
Casella posted adjusted earnings of $0.30 per share, which surpassed analysts' estimates of $0.22. However, the company's revenue of $469.1 million came in slightly below expectations. The primary concern for investors appeared to be the decline in profitability. Despite revenue growing 9.7% year-over-year, Casella’s operating margin for the quarter was 2.5%, a significant decrease from 4.3% in the same period last year. Additionally, its free cash flow margin, a key indicator of cash profitability, fell to 8.4% from 13.9% year-over-year, signaling to investors that the company's efficiency had weakened.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Casella Waste Systems? Access our full analysis report here, it’s free.
What Is The Market Telling Us
Casella Waste Systems’s shares are not very volatile and have only had 4 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 5 months ago when the stock gained 4.3% on the news that Stifel resumed coverage of the company with a Buy rating and set a price target of $113.
This price target suggested a notable potential increase from the stock's recent trading levels. In its analysis, Stifel pointed to Casella's ownership of landfills in capacity-constrained areas of the Northeast, which was expected to provide the company with additional pricing power over time. The firm's positive view was part of a broader optimistic outlook on the solid waste sector, where other major companies also received Buy ratings. The new coverage also highlighted the company's strong performance, as its revenue had increased 20.3% over the previous twelve months.
Casella Waste Systems is down 2.4% since the beginning of the year, and at $96.29 per share, it is trading 20% below its 52-week high of $120.37 from May 2025. Investors who bought $1,000 worth of Casella Waste Systems’s shares 5 years ago would now be looking at an investment worth $1,631.
Do you want to know what moves the business you care about? Add them to your StockStory watchlist and every time a stock significantly moves, we provide you with a timely explanation straight to your inbox. It’s free and will only take you a second.