Analyst Note| Brian Bernard, CFA, CPA |
Wide-moat rated Waste Connections reported solid first-quarter results that featured both top line growth and EBITDA margin expansion. Revenue increased about 3% year over year to $1.4 billion; strong core price of 4.5% and 90 basis points of growth tied to recycling were partially offset by almost a 3.2% decrease in volume. That said, solid waste volume returned to growth in March with a 2.6% year-over-year gain, and management said landfill volumes have bounced back to pre-pandemic levels. Management expects $1.49 billion of revenue next quarter, driven by a 10% increase in volume plus price. We believe this target is achievable if not conservative based on current trends and our economic outlook.