The end of the earnings season is always a good time to take a step back and see who shined (and who not so much). Let’s take a look at how environmental and facilities services stocks fared in Q3, starting with Veralto (NYSE:VLTO).
Many environmental and facility services are non-discretionary (sports stadiums need to be cleaned after events), recurring, and performed through longer-term contracts. This makes for more predictable and stickier revenue streams. Additionally, there has been an increasing focus on emissions and water conservation over the last decade, driving innovation in the sector and demand for new services. Despite these tailwinds, environmental and facility services companies are still at the whim of economic cycles. Interest rates, for example, can greatly impact commercial construction projects that drive incremental demand for these services.
The 14 environmental and facilities services stocks we track reported a slower Q3. As a group, revenues were in line with analysts’ consensus estimates while next quarter’s revenue guidance was 1.7% above.
Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 8.1% since the latest earnings results.
Veralto (NYSE:VLTO)
Spun off from Danaher in 2023, Veralto (NYSE:VLTO) provides water analytics and treatment solutions.
Veralto reported revenues of $1.31 billion, up 4.7% year on year. This print exceeded analysts’ expectations by 0.6%. Overall, it was a satisfactory quarter for the company with a decent beat of analysts’ adjusted operating income estimates but EPS guidance for next quarter missing analysts’ expectations.
Unsurprisingly, the stock is down 8.4% since reporting and currently trades at $101.65.
Is now the time to buy Veralto? Access our full analysis of the earnings results here, it’s free.
Best Q3: Aris Water (NYSE:ARIS)
Primarily serving the oil and gas industry, Aris Water (NYSE:ARIS) is a provider of water handling and recycling solutions.
Aris Water reported revenues of $112.3 million, up 12.5% year on year, outperforming analysts’ expectations by 8.6%. The business had an exceptional quarter with an impressive beat of analysts’ sales volume estimates and a solid beat of analysts’ EBITDA estimates.
Aris Water delivered the biggest analyst estimates beat among its peers. The market seems happy with the results as the stock is up 40.9% since reporting. It currently trades at $23.39.
Is now the time to buy Aris Water? Access our full analysis of the earnings results here, it’s free.
Weakest Q3: Perma-Fix (NASDAQ:PESI)
Tackling hazardous waste challenges since 1990, Perma-Fix (NASDAQ:PESI) provides environmental waste treatment services.
Perma-Fix reported revenues of $16.81 million, down 23.2% year on year, falling short of analysts’ expectations by 2.3%. It was a disappointing quarter as it posted a significant miss of analysts’ EBITDA and EPS estimates.
Perma-Fix delivered the slowest revenue growth in the group. As expected, the stock is down 29.1% since the results and currently trades at $10.41.
Read our full analysis of Perma-Fix’s results here.
Quest Resource (NASDAQ:QRHC)
Recycling corporate waste to help companies be more sustainable, Quest Resource (NASDAQ:QRHC) is a provider of waste and recycling services.
Quest Resource reported revenues of $72.77 million, up 3.3% year on year. This result came in 5.6% below analysts' expectations. Overall, it was a disappointing quarter as it also recorded a significant miss of analysts’ EBITDA and EPS estimates.
The stock is down 25.3% since reporting and currently trades at $6.15.
Read our full, actionable report on Quest Resource here, it’s free.
Waste Management (NYSE:WM)
Headquartered in Houston, Waste Management (NYSE:WM) is a provider of comprehensive waste management services in North America.
Waste Management reported revenues of $5.61 billion, up 7.9% year on year. This number surpassed analysts’ expectations by 1.7%. Overall, it was a strong quarter as it also put up a decent beat of analysts’ adjusted operating income estimates.
The stock is down 2.2% since reporting and currently trades at $203.83.
Read our full, actionable report on Waste Management here, it’s free.
Market Update
Thanks to the Fed's series of rate hikes in 2022 and 2023, inflation has cooled significantly from its post-pandemic highs, drawing closer to the 2% goal. This disinflation has occurred without severely impacting economic growth, suggesting the success of a soft landing. The stock market has thrived in 2024, spurred by recent rate cuts (0.5% in September and 0.25% each in November and December), and a notable surge followed Donald Trump's presidential election win in November, propelling indices to historic highs. Nonetheless, the outlook for 2025 remains clouded by the pace and magnitude of future rate cuts as well as potential changes in trade policy and corporate taxes once the Trump administration takes over. The path forward is marked by uncertainty.
Want to invest in winners with rock-solid fundamentals? Check out our Top 5 Growth Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.
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