CASELLA WASTE SYSTEMS, INC. (CWST): what the price assumes

In the published model solve dated 2026-Q2, anchored at $93.53, CASELLA WASTE SYSTEMS, INC. (CWST) is priced for today's economics sustained for ~11.6 years. boothcheck publishes no house fair value, target price, or buy/sell rating; individual model outputs and user-controlled scenarios are analytical inputs, not Boothcheck targets. Narrative composed 2026-07-25.

Generated: 2026-09-07 · Exported: 2026-09-09 · Source: https://boothcheck.com/report/CWST

Headline

FieldValue
TickerCWST
CompanyCASELLA WASTE SYSTEMS, INC.
Sector / IndustryIndustrials
Current price$93.53/sh
CompositionCollection 65% / Landfill 5% / Transfer station 8% / Transportation 1% / Landfill gas-to-energy 0% / Processing 8% / National Accounts 12%

What The Price Assumes (Inversion)

The assumption today's price embeds, recovered by inverting the valuation.

FieldValue
Inversion basiswhole-company
Operating margin (value-band context)2.9%
Operating margin today3.4%
Margin compression (value-band)-0.5pp
Must persist for11.6y
Multiple paid112x operating income

The operating-margin figure is value-band context at year 8: derived from the framework's value band, a separate calculation — not part of the priced-in solve.

Solve inputs: computed at a 7.6% cost of capital; growth searched up to the 25% self-funding ceiling.

How unusual the bet is: elevated (limited comparison data)

ReferenceValue
vs own history+0.68σ
cohort percentile (of 225 peers)100

Valuation X-Ray

Asset, earnings-power and peer-multiple models all land far below the price; ONLY the growth-DCF reaches it. The bet is durable compounding the static frames structurally cannot price (a moat/durability premium).

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.

FamilyMedian price/FVModelsReads
Asset13.19x1expensive
Earnings—0—
Relative—0—
Growth1.05x3expensive

Families that justify the price: Growth Families that call it expensive: Asset

The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 7.6%); the inversion above states its own rate.

Per-Model Detail (n=4)

ModelFamilyFVPrice/FVApplicableMethodology
DCF Perpetual GrowthGrowth$41.802.24xyesFCF base $0.1B, growth 14% (input: historical growth), terminal g 4.0%, WACC 7.6%, 6yr projection
DCF Exit MultipleGrowth$109.230.86xyesExit EV/EBITDA: 16.9x / 18.9x / 20.9x (bear / base = today's held flat / bull), 6yr
Relative ValuationRelative——noP/E 44x (blended: static sector reference 20x + trailing (TTM) 1043x), scenarios: 36.2x / 44.0x / 51.8x (bear / base = reference held flat / bull), EV/EBITDA 13x
Simple DDMGrowth——no—
Two-Stage DDMGrowth——no—
Simple Excess ReturnAsset$0.9796.42xyesBV/sh $24.85, ROE (TTM) 0.4%, ke 9.3% (excluded from median)
Two-Stage Excess ReturnAsset$0.49190.88xyes5yr excess ROE then converge to ke=9.3% (excluded from median)
Discounted Future Market CapGrowth$89.351.05xyesRev $2.0B, growth 14% (input: historical growth; tapered), Terminal P/S: 2.5x / 3.0x / 3.6x (bear / base = today's held flat / bull, cap 12x)
Growth-Adjusted P/ERelative——no—
Margin TrajectoryGrowth——no—
Earnings Power ValueEarnings$0.019353.00xyesNormalized EBIT (5y avg op income, one-time charges added back) $0.08B × (1−21%) / WACC 7.6% → EPV (no growth) (excluded from median)
Residual IncomeAsset$0.35267.23xyesBV $24.85 + 5yr PV of (ROE (TTM) 0.4% − Kₑ 9.3%) × BV; BV grows 0.2%/yr (excluded from median)
Graham NumberAsset$7.0913.19xyes√(22.5 × EPS $0.09 × BVPS $24.85) — Graham's conservative floor
EV/EBITDA RelativeRelative——noEBITDA $0.39B × sector EV/EBITDA 13.0x
FCF YieldEarnings$0.019353.00xyesFCF $105.7M / Kₑ 9.3% — zero-growth perpetuity (excluded from median)
SBC-Adj FCF YieldEarnings$0.019353.00xyesSBC-adj FCF $0.09B (FCF $0.11B − SBC $0.01B) capitalized at Kₑ (excluded from median)
Ben Graham FormulaEarnings$0.081169.13xyesEPS $0.09 × (8.5 + 2×-5.0%) × (4.4 / 5.3%) (excluded from median)
ROIC-Justified P/BAsset$1.7154.70xyesBV $24.85 × (ROIC 0.5% / WACC 7.6%) (excluded from median)
P/Sales SectorRelative——noRevenue $1.96B × sector P/S 2.0x
PEG Fair ValueRelative——no—
Earnings YieldEarnings$0.9796.42xyesEPS $0.09 / required return 9.3% (Rf 4.3% + ERP 5.0%) (excluded from median)
Funds From Operations MultipleRelative——no—
Clinical Phase NPVGrowth——no—
MertonAsset——no—
V5 Mechanical———no—

Economic-Unit Decomposition (Sum Of The Parts)

One or more material disclosed units has unresolved economics. Unknown/general is not evidence of homogeneity: segment SOTP is primary but incomplete, consolidated cash flow may remain only a secondary cross-check when every unit shares an enterprise basis, and one sector multiple or target margin is withheld.

UnitRoleValuation basisRevenueReported profitValue evidenceStatus
Easternoperatingenterprise$472.6m—withheldunresolved no unit value
Westernoperatingenterprise$663.2m—withheldunresolved no unit value
Mid-Atlanticoperatingenterprise$341.1m—withheldunresolved no unit value
Resource Solutionsoperatingenterprise$360.0m—withheldunresolved no unit value

No total common-equity value is stated. One or more material units lack a supported unit value. The displayed values are an indicative subtotal; consolidated debt and cash cannot be applied to a fraction of the company.

Solvency

FieldValue
Net debt$1.2b
Net debt / NOPAT (after-tax)23.75x
Net debt / operating income (pre-tax)18.77x
Interest coverage1.0x
Share count CAGR (dilution)5.3%
Burning cashno

Bullet Takeaways

Bull Case

Start with the direction of travel rather than the level. In the March 2026 quarter revenue grew 9.6% while adjusted profitability grew 12.3%, which is the arrangement every operator wants and few in a labor-and-fuel business achieve: each new dollar of revenue arriving with more profit attached than the last one had. Across 2025 the collection business raised prices by 47.9 million dollars, or 5.0% as a percentage of collection revenues, against cost inflation the annual report describes running through disposal, labor and maintenance. Pricing that outpaces the cost line is the entire game in solid waste, and it is being won.

The reason the pricing holds is structural, and the company is explicit about how it works. Alongside acquisition integration it describes optimizing the internalization of solid waste and recycling volumes into our facilities. Collection makes up roughly 65% of revenue, transfer stations and landfills another 13% between them, and when a truck the company owns tips into a transfer station the company owns, on the way to a landfill the company owns, the margin on that ton is collected at each stop instead of paid away to a competitor's gate. As of January 31, 2026 the network ran to 86 solid waste collection operations alongside its own disposal and gas-to-energy assets. In a region where new landfill permits are close to unobtainable, owning the hole in the ground is the position that cannot be competed away by a better truck.

What the income statement obscures is worth stating plainly. Revenue of 1.88 billion dollars produces roughly 380 million dollars of EBITDA and 56.6 million dollars of operating profit, and almost the entire distance between those two figures is depreciation plus the amortization of landfill airspace as it gets consumed. The airspace charge is genuine, since a landfill really does get used up, but it is also an accounting cost attached to assets that were largely bought in the last few years and are still being integrated. A business whose reported operating margin sits at 3.1% while it generates a fifth of revenue as EBITDA is not a low-margin business. It is a capital-intensive one, mid-build.

And the build is funded. At the end of 2025 the company held $673.4 million of undrawn capacity under our $700.0 million revolving credit facility plus 123.8 million dollars of cash, which is the dry powder for a strategy the filing lists as Allocating capital to return driven growth. The bear will say that acquiring revenue is the easy part, and the bear is right that it is easy. The reason it works here anyway is that the acquired routes get fed into disposal infrastructure the acquirer already owns, which is a source of margin the seller could never have realized on its own.

Bear Case

Look at how the growth was produced and the capital-allocation question answers itself. Of the 249.5 million dollar increase in solid waste revenue during 2025, the annual report attributes 198.1 million dollars to acquisitions, 16.1 of the 20.3 percentage points. Collection pricing did contribute genuinely, but the headline growth rate that supports this valuation is largely a record of things bought rather than a business expanding on its own. Buying revenue is a strategy available to anyone with access to capital, and it stops working the moment that access changes terms.

Existing holders have been paying for it. Shares outstanding have risen about 5.3% a year over the four years to March 2026, so a holder's claim on each dollar of future profit has been shrinking the entire time the enterprise has been growing. The borrowed half of the funding is heavier still: net borrowings of roughly 1.04 billion dollars stand at about 18.32 times operating profit, and operating profit covers interest about 0.9 times, meaning it does not quite cover it. Depreciation and airspace charges are non-cash and the company is not consuming cash overall, but a business whose reported operating profit sits below its interest bill has no cushion inside the income statement itself. Every acquisition therefore has to be financed externally, and each one issues a little more equity and a little more debt to do it.

The price assumes this continues for an extraordinarily long time. At today's level the market pays roughly 120 times operating profit, which requires growth to hold at the ceiling the company can self-fund for something like 13 years. The rate itself is inside what has recently been delivered; the duration is the demand, and among companies that have grown at that pace historically only about 14% held it for as long as a decade. The multiple also sits at the very top of its peer distribution, well beyond the upper quartile, which means the market is not merely expecting Casella to succeed. It is expecting Casella to outlast the base rate.

A decade of acquisitions has also not closed the profitability gap with the acquirers it competes against. WM converts 17.3% of revenue into operating profit and RSG 17.4%, while CLH, a specialist in harder waste streams, manages 11.2%. Casella reports 3.1%. Some of that difference is genuinely the accounting for recently bought assets. Some of it is that integrating dozens of small haulers across New England is difficult, ongoing work, and the reported margin has not yet demonstrated that the work converts.

The tail risk sits underneath the landfills. Following the April 2024 designation by the EPA of PFOA and PFOS as hazardous substances, the annual report warns that the change could create Superfund liabilities under CERCLA for all downstream recipients of PFAS, including passive receivers such as our landfills and transporters of biosolids. Casella did not manufacture these compounds; it accepted the waste of everyone who did. Liability for a passive receiver is not a cost that can be priced into next year's contract, and it attaches to assets the company cannot relocate.

Valuation

At 89.42 the market values the whole enterprise at roughly 120 times its operating profit, and at about 18 times EBITDA, the multiple the exit-multiple cash-flow method carries flat into its terminal year. Those two figures describe the same company and feel like they describe different ones. The gap between them is depreciation and landfill airspace amortization, which is where the analytical question in this name actually lives.

Run the price backwards and what it demands is not speed but stamina. It asks for growth to hold at the maximum pace the business can fund from its own returns, and to hold it for roughly 13 years. Read that against how rarely companies sustain such a pace, roughly 14% of comparable fast growers over a decade, and the shape of the bet becomes clear: the market has already decided that acquisition-led compounding in the Northeast has more than a decade left to run.

The valuation approaches split cleanly along that line. Only the forward-growth methods reach today's price, and the one that gets closest does so by holding today's enterprise-to-EBITDA multiple flat rather than compressing it, which is an assumption rather than a finding. Peer-multiple approaches land meaningfully below the price. The book-value lens lands far below it, for the mechanical reason that returns on book equity are currently near zero once depreciation and interest have been taken out. No static method reaches this price, and the static methods are not being obtuse. They are describing a company whose reported earnings are small and whose asset base is expensive.

The cohort comparison is where the premium becomes visible as a choice rather than an accident. WM grew revenue 10.9% over the trailing year at a 17.3% operating margin. RSG grew 3.0% at 17.4%. CLH grew 1.9% at 11.2%. Casella is growing faster than any of them and converting 3.1% of revenue into operating profit. Buyers are paying the industry's highest multiple for the industry's thinnest reported margin, on the expectation that the second number rises toward the first as acquisitions season. That is a coherent thesis. It is also, precisely, the thing that has not happened yet.

The balance sheet frames the downside. Net borrowings run about 18.32 times operating profit and coverage sits at roughly 0.9 times, though the company holds a largely undrawn revolving facility and is not burning cash. The share count has climbed about 5.3% a year for four years. Both the debt and the equity are being used as acquisition currency, which is consistent with the strategy and is also why a change in the price of either would reach this business faster than it would reach its larger competitors.

Catalysts

Second-quarter results are scheduled for August 6, 2026, with the conference call announced on July 13, 2026. The March quarter set the bar at 9.6% revenue growth and 12.3% adjusted EBITDA growth, so the question is whether the profit line keeps widening its lead over the revenue line as the recent acquisitions complete their first full year inside the network.

The acquisition machine has kept running. Star Waste Systems closed on April 1, 2026, which lands entirely inside the second quarter and will show up as revenue before it shows up as margin, since integration and route optimization take longer than a closing does. That timing is worth holding in mind when reading the print: newly acquired revenue arrives at the seller's cost structure, not the buyer's.

Two other developments shape the next several quarters. On May 14, 2026 the company opened a renewable natural gas facility with Waga Energy, which converts landfill gas into a saleable product at sites the company already owns and operates. And on July 1, 2026 Damian Ribar was appointed Chief Operating Officer. In a business where the whole thesis rests on integrating acquired routes into existing disposal assets, the operating seat is not a ceremonial one.

Peer Cohorts (Per Segment, With Filing Citations)

Eastern / Western / Mid-Atlantic (reported)

Resource Solutions (reported)

Methodology Note

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.

Sources

Q1 2026 results release, May 1, 2026 · company press release, July 13, 2026 · company announcement, April 1, 2026 · joint announcement, May 14, 2026 · company announcement, July 1, 2026

View the full interactive CWST report on boothcheck