CLEAN HARBORS, INC (CLH): what the price requires
At today's price, CLEAN HARBORS, INC (CLH) is priced for +24.9% growth. boothcheck doesn't publish a fair value or a price target; it shows what the price assumes, so you can judge whether that bar is too high.
Generated: 2026-07-14 · Exported: 2026-07-16 · Source: https://boothcheck.com/report/CLH
Headline
| Field | Value |
|---|---|
| Ticker | CLH |
| Company | CLEAN HARBORS, INC |
| Current price | $305.37/sh |
| Composition | Environmental Services 85% / Safety-Kleen Sustainability Solutions 15% |
What The Price Requires (Inversion)
The assumption today's price embeds, recovered by inverting the valuation.
| Field | Value |
|---|---|
| Inversion basis | whole-company |
| Operating margin needed | 7.3% |
| Operating margin today | 10.6% |
| Margin compression implied | -3.3pp |
| Implied growth | 24.9% |
| Multiple paid | 30x operating income |
The operating-margin requirement is derived from the framework's value band at year 12, a separately labeled basis from the headline growth/duration solve.
Solve inputs: computed at a 8.7% cost of capital with 4% terminal growth over a 5-year stage; each 1pp of cost of capital moves the implied operating-profit growth ~8.2pp.
How unusual the bet is: within-range
| Reference | Value |
|---|---|
| vs own history | +0.11σ |
| cohort percentile (of 225 peers) | 69 |
| sustained it ~5 years at this level | 36% |
| implied end-window share | 0% |
Valuation X-Ray
Every valuation family lands below the price. The price therefore requires assumptions beyond what those standard frames encode.
How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.
| Family | Median price/FV | Models | Reads |
|---|---|---|---|
| Asset | 3.18x | 4 | expensive |
| Earnings | 6.63x | 5 | expensive |
| Relative | 1.45x | 5 | expensive |
| Growth | 1.39x | 3 | expensive |
Families that call it expensive: Asset, Earnings
The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 8.4%); the inversion above states its own rate.
Per-Model Detail (n=17)
| Model | Family | FV | Price/FV | Applicable | Methodology |
|---|---|---|---|---|---|
| DCF Perpetual Growth | Growth | $83.01 | 3.68x | yes | FCF base $0.5B, growth 2% (input: historical growth), terminal g 2.0%, WACC 8.4%, 5yr projection |
| DCF Exit Multiple | Growth | $250.55 | 1.22x | yes | Exit EV/EBITDA: 15.0x / 17.0x / 19.0x (bear / base = today's held flat / bull), 5yr |
| Relative Valuation | Relative | $209.96 | 1.45x | yes | P/E 26.28x (blended: static sector reference 20x + trailing (TTM) 41x), scenarios: 22.3x / 26.3x / 30.3x (bear / base = reference held flat / bull), EV/EBITDA 13x |
| Simple DDM | Growth | — | — | no | — |
| Two-Stage DDM | Growth | — | — | no | — |
| Simple Excess Return | Asset | $80.68 | 3.78x | yes | BV/sh $52.38, ROE (TTM) 14.2%, ke 9.3% |
| Two-Stage Excess Return | Asset | $99.07 | 3.08x | yes | 5yr excess ROE then converge to ke=9.3% |
| Discounted Future Market Cap | Growth | $219.98 | 1.39x | yes | Rev $6.1B, growth 2% (input: historical growth; tapered), Terminal P/S: 2.3x / 2.7x / 3.1x (bear / base = today's held flat / bull, cap 8x) |
| Peter Lynch Fair Value | Relative | $88.56 | 3.45x | yes | EPS $7.38, growth 3% (input: historical EPS growth), PEG=11.80 (Overvalued) |
| Margin Trajectory | Growth | — | — | no | — |
| Earnings Power Value | Earnings | $46.03 | 6.63x | yes | Normalized EBIT (5y avg op income, one-time charges added back) $0.60B × (1−25%) / WACC 8.4% → EPV (no growth) |
| Residual Income | Asset | $102.16 | 2.99x | yes | BV $52.38 + 5yr PV of (ROE (TTM) 14.2% − Kₑ 9.3%) × BV; BV grows 8.8%/yr |
| Graham Number | Asset | $93.26 | 3.27x | yes | √(22.5 × EPS $7.38 × BVPS $52.38) — Graham's conservative floor |
| EV/EBITDA Relative | Relative | $219.93 | 1.39x | yes | EBITDA $1.13B × sector EV/EBITDA 13.0x |
| FCF Yield | Earnings | $37.82 | 8.07x | yes | FCF $466.8M / Kₑ 9.3% — zero-growth perpetuity |
| SBC-Adj FCF Yield | Earnings | $30.75 | 9.93x | yes | SBC-adj FCF $0.43B (FCF $0.47B − SBC $0.03B) capitalized at Kₑ |
| Ben Graham Formula | Earnings | $95.47 | 3.20x | yes | EPS $7.38 × (8.5 + 2×3.5%) × (4.4 / 5.3%) |
| ROIC-Justified P/B | Asset | $9.58 | 31.88x | yes | BV $52.38 × (ROIC 1.5% / WACC 8.4%) (excluded from median) |
| P/Sales Sector | Relative | $228.65 | 1.34x | yes | Revenue $6.06B × sector P/S 2.0x |
| PEG Fair Value | Relative | $38.39 | 7.95x | yes | EPS $7.38 × (PEG 1.5 × growth 3.5% (input: historical EPS growth)) → PE 5.2x |
| Earnings Yield | Earnings | $79.78 | 3.83x | yes | EPS $7.38 / required return 9.3% (Rf 4.3% + ERP 5.0%) |
| Funds From Operations Multiple | Relative | — | — | no | — |
| Clinical Phase NPV | Growth | — | — | no | — |
| Merton | Asset | — | — | no | — |
| V5 Mechanical | — | — | — | no | — |
Solvency
| Field | Value |
|---|---|
| Net debt | $2.9b |
| Net debt / NOPAT (after-tax) | 6.07x |
| Net debt / operating income (pre-tax) | 4.55x |
| Share count CAGR (buyback) | -0.8% |
| Burning cash | no |
Interest expense is not separately reported in the latest filings, so interest coverage cannot be computed.
Bullet Takeaways
- The earnings trajectory is steadily up and to the right: Q1 2026 set record revenue at $1.46 billion, adjusted EBITDA rose 6% to $247.9 million with margin expanding 60 basis points to 17.0%, and management raised full-year EBITDA guidance to $1.24 to $1.30 billion.
- The price at $288.55 sits above every valuation family, with the reverse-DCF reading an implied operating-income growth requirement near 23%. The market is paying a premium for the regulatory moat in hazardous-waste disposal.
- The cushion is the moat, not the balance sheet. Environmental regulation is a barrier to entry that benefits Clean Harbors, but net debt of about $2.9 billion runs roughly 4.2x operating income, so capital discipline matters.
Bull Case
Follow the earnings trajectory, because at Clean Harbors it has been a steady climb that the latest quarter extended. Q1 2026 delivered record revenue of $1.46 billion, gross margin improved to 30.5%, net income rose 7.7% to $63.2 million, and adjusted EBITDA grew 6% to $247.9 million with margin expanding 60 basis points to 17.0%. Management raised full-year 2026 adjusted-EBITDA guidance to $1.24 to $1.30 billion and adjusted free cash flow to $490 to $550 million. This is a business compounding revenue and expanding margin at the same time, and the direction has held across cycles because the demand for hazardous-waste disposal is non-discretionary and tied to regulation rather than the economy.
The moat is the reason the trajectory is durable, and the filing names it plainly: extensive environmental regulation applicable to the industry is a barrier to rapid entry by competitors that benefits Clean Harbors (FY2025 10-K, accession 0000822818-26-000009). Building a permitted hazardous-waste incinerator takes years and faces intense regulatory and community hurdles, so the existing network is effectively irreplaceable. The company also benefits from a structural feature of environmental law: generators of hazardous waste remain liable for its proper disposal (FY2025 10-K, accession 0000822818-26-000009), which keeps demand sticky and price-insensitive because customers cannot simply walk away from the obligation. The new Kimball incinerator is ramping ahead of expectations, adding capacity in a supply-constrained market.
The valuation methods that reach the price are the growth and peer frames, and they are supported by the trajectory. The DCF exit-multiple lands at $238.47, EV/EBITDA relative at $219.93, the discounted-future-market-cap at $207.87, and relative valuation at $207.38. The reverse-DCF reads the implied assumption as within the company's normal range despite a high headline growth requirement, reflecting that Clean Harbors has historically delivered the growth. A buyer at $288.55 is paying a premium multiple for a regulatory-moated, recurring-demand environmental-services leader that is expanding margins and raising guidance, with incremental incineration capacity coming online into tight supply.
Bear Case
The concern that deserves the most scrutiny is capital allocation, because the premium price rests on a balance sheet carrying meaningful leverage to fund growth. Net debt is about $2.9 billion against trailing operating income of $681 million, roughly 4.2x, built up through a long history of debt-funded acquisitions. The company's debt agreements restrict its ability to incur further debt, create liens, make restricted payments or investments, and transact with affiliates (FY2025 10-K, accession 0000822818-26-000009), which is the lender's way of acknowledging the leverage is already substantial. Clean Harbors does not pay a dividend, so shareholder returns depend entirely on management redeploying cash into acquisitions and capacity at returns above the cost of capital. When a company is levered 4x and the equity is priced for high growth, the quality of every capital decision, each acquisition multiple, each incinerator build, is what determines whether the premium is earned or destroyed.
The valuation makes the demand on capital allocation explicit. The price sits above every valuation family, with earnings power value at $46.56, the zero-growth FCF-yield read at $37.82, and the simple excess-return at $80.68, all a fraction of the $288.55 price. The reverse-DCF requires roughly 23% implied operating-income growth to justify the price, a high bar for a company whose trailing revenue grew in the low single digits and whose 2026 EBITDA guidance implies high-single-digit growth. The gap between the low-single-digit organic growth and the 23% the price assumes is the part that must come from acquisitions and capacity additions executing well, which is precisely where leverage amplifies mistakes.
The structural risks compound the capital-allocation question. The ROIC-justified book value of $9.62 reflects that returns on the large, acquisition-built asset base are modest relative to the cost of capital, so the company has to keep finding accretive deals to grow value. Regulation, the source of the moat, is also a cost: the filing notes increasing regulations may raise operating costs, and pass-through emission rules apply to each facility (FY2025 10-K, accession 0000822818-26-000009). Industrial-waste volumes are also somewhat tied to manufacturing and energy activity, so a recession would soften the cyclical portion of demand. The bear read is that Clean Harbors is a high-quality business priced for a growth rate that depends on disciplined, debt-funded capital deployment continuing flawlessly, with little valuation cushion if a deal or the cycle disappoints.
Valuation
Clean Harbors trades above every valuation family on the X-ray, the signature of a quality-and-moat premium. The growth and peer methods come closest: the DCF exit-multiple at $238.47, EV/EBITDA relative at $219.93, the discounted-future-market-cap at $207.87, and relative valuation at $207.38. The asset and earnings frames sit far lower, with residual income at $102.16, the two-stage excess-return at $99.07, the Graham number at $93.26, and earnings power value at just $46.56. The zero-growth FCF-yield read at $37.82 is the floor, reflecting how much of the price depends on growth rather than current cash.
The reverse-DCF puts the implied operating-income growth near 23%, which the model reads as within Clean Harbors' normal range, an important nuance: the company has a track record of delivering growth through capacity expansion and acquisition, so the high headline assumption is not as extreme for this name as it would be for a slower compounder. The blended multiple of about 28x is rich but consistent with a recurring-demand, regulatory-moated services business.
The premium is justified if the regulatory moat, the non-discretionary demand, and the incineration-capacity additions keep compounding EBITDA, and if management deploys its leveraged balance sheet into accretive deals. The bet a buyer makes at $288.55 is that the roughly 23% implied growth is achievable for a company that has historically delivered it, with the risks being a stumble in capital allocation on a 4.2x-levered balance sheet or a cyclical softening in industrial-waste volumes. If the growth and discipline hold, the premium is earned; if not, the earnings-power methods well below the price are the gravity.
Catalysts
The Q1 2026 report on May 6 was the most recent catalyst and a strong one: record revenue of $1.46 billion, EPS of $1.19 ahead of the $1.16 forecast, adjusted EBITDA up 6% to $247.9 million with margin up 60 basis points to 17.0%, and raised full-year guidance to $1.24 to $1.30 billion of adjusted EBITDA and $490 to $550 million of adjusted free cash flow. Management guided Q2 adjusted EBITDA to grow 5% to 9%. The next print tests whether margin expansion and the Kimball ramp continue.
The forward watch items are specific. First, the Kimball incinerator ramp, which management said exceeded EBITDA expectations and is guided to add $10 to $15 million in 2026; new permitted incineration capacity into a tight market is the highest-return growth lever. Second, Environmental Services margin and volume, the core engine that drove the Q1 strength. Third, capital allocation, the central question for a no-dividend, 4.2x-levered compounder, where the pace and pricing of acquisitions and the trajectory of net debt determine whether the premium multiple is sustained. Fourth, industrial and energy activity, since the cyclical portion of waste volumes tracks manufacturing and energy markets. Each quarter is a read on whether the regulatory-moated demand keeps compounding fast enough to justify the price.
Peer Cohorts (Per Segment, With Filing Citations)
Environmental Services (reported)
- WM (Waste Management, Inc)
- (no filing in the citation store)
- RSG (REPUBLIC SERVICES, INC.)
- (no filing in the citation store)
- WCN (WASTE CONNECTIONS, INC.)
- (no filing in the citation store)
- CWST (CASELLA WASTE SYSTEMS, INC.)
- (no filing in the citation store)
- TTEK (TETRA TECH, INC.)
- (no filing in the citation store)
Safety-Kleen Sustainability Solutions (reported)
- WM (Waste Management, Inc)
- (no filing in the citation store)
- RSG (REPUBLIC SERVICES, INC.)
- (no filing in the citation store)
- WCN (WASTE CONNECTIONS, INC.)
- (no filing in the citation store)
- CWST (CASELLA WASTE SYSTEMS, INC.)
- (no filing in the citation store)
Methodology Note
- Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
- Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
- Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
- Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.
Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.