CWST Intrinsic Value – Casella Waste Systems Amends $650M Credit Facility to Link Borrowing Costs to Sustainability Goals and Adopts Term SOFR as Reference Rate.
February 13, 2023
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CWST Intrinsic Value – Casella Waste Systems ($NASDAQ:CWST) is a leading provider of environmental solutions and services in the United States and Canada. The company has recently announced an amendment to its $650M credit facility, connecting borrowing costs to its yearly sustainability goals. The amendment ensures that Casella’s shareholders, customers, and the environment all benefit from the company’s financial decisions. This replaces LIBOR, which is predicted to discontinue later this year. This ensures that Casella maintains a stable borrowing rate, allowing for greater financial flexibility and consistent returns for its shareholders.
The adoption of Term SOFR provides Casella with significant cost savings due to its low volatility rate and the ability to lock in low interest rates for up to five or seven years. This provides Casella with a more consistent borrowing rate, allowing them to better manage their finances. Casella Waste Systems is committed to providing their customers with quality environmental solutions while upholding environmental standards and managing their finances responsibly. The company’s financial decisions are not only helping their shareholders, but also benefiting the environment.
Share Price
The news has been mostly negative, but on Friday the CASELLA WASTE SYSTEMS stock opened at $79.4 and closed at $80.4, up by 1.6% from the previous closing price of 79.2. The amendment to the credit facility will give the company access to lower interest rates when it met certain sustainability goals, such as reducing emissions and waste sent to landfills. This encourages CASELLA WASTE SYSTEMS to strive for more sustainable practices while still taking advantage of the savings associated with lower interest rates.
Additionally, the company adopted the Term SOFR as its reference rate, changing it from the London interbank offered rate (LIBOR). The SOFR is a more stable and reliable reference rate than LIBOR. It reflects the company’s commitment to sustainability and its ability to remain competitive in the rapidly changing economic environment. This is good news for investors and customers alike, as it shows that CASELLA WASTE SYSTEMS is able to adapt to changing industry conditions in order to remain viable in the long term. Live Quote…
About the Company
Income Snapshot
Below shows the total revenue, net income and net margin for CWST. More…
| Total Revenues | Net Income | Net Margin |
| 1.05k | 53.8 | 5.5% |
Cash Flow Snapshot
Below shows the cash from operations, investing and financing for CWST. More…
| Operations | Investing | Financing |
| 201.08 | -220.12 | 20.49 |
Balance Sheet Snapshot
Below shows the total assets, liabilities and book value per share for CWST. More…
| Total Assets | Total Liabilities | Book Value Per Share |
| 1.4k | 912.79 | 9.41 |
Key Ratios Snapshot
Some of the financial key ratios for CWST are shown below. More…
| 3Y Rev Growth | 3Y Operating Profit Growth | Operating Margin |
| 13.3% | 20.0% | 9.0% |
| FCF Margin | ROE | ROA |
| 6.8% | 12.5% | 4.2% |
Analysis – CWST Intrinsic Value
GoodWhale has conducted an in-depth analysis of CASELLA WASTE SYSTEMS and concluded that the fair value of its stock is around $80.3. This was calculated using our proprietary Valuation Line, which takes into account both qualitative and quantitative factors to determine a company’s true worth. Currently, CASELLA WASTE SYSTEMS is traded at $80.4, which is very close to the fair value. This suggests that the stock is at a fair price, and investors should consider this when making their buy or sell decisions. GoodWhale’s analysis also revealed some other important information about CASELLA WASTE SYSTEMS. Our research indicates that the company is financially sound, with strong cash flows and a healthy balance sheet. This should provide investors with confidence that they are investing in a well-run business. Additionally, the company’s earnings growth has been robust in the past few years, suggesting that it has the potential to continue growing in the future. Overall, GoodWhale’s analysis suggests that investors should consider investing in CASELLA WASTE SYSTEMS. The company is trading at a fair price and has a strong financial position, which should provide investors with assurance that their investments are safe. The company’s impressive growth also provides potential for future gains. More…
Peers
The competition among Casella Waste Systems Inc and its competitors is fierce. Each company is vying for a share of the waste management market, and each has its own strengths and weaknesses.
However, it faces competition from smaller, more nimble companies such as Renewi PLC and Waste Connections Inc. Macau Capital Investments Inc is a new entrant to the market, and it is unclear how it will impact the competition.
– Renewi PLC ($LSE:RWI)
Renewi PLC is a British-Dutch multinational waste management company headquartered in London, United Kingdom. It is listed on the London Stock Exchange and is a constituent of the FTSE 250 Index. The company was formed in 2016 from the merger of Shanks Group plc and Van Gansewinkel Groep B.V.
Renewi PLC has a market cap of 430.77M as of 2022 and a Return on Equity of 26.36%. The company is involved in the business of waste management and provides services such as waste collection, treatment, and disposal.
– Waste Connections Inc ($NYSE:WCN)
Waste Connections, Inc. is an integrated solid waste services company that provides waste collection, transfer, disposal and recycling services in mostly exclusive and secondary markets in the United States. The Company’s segments include: Western Canada, which consists of the Company’s operations in the provinces of British Columbia, Alberta, and Saskatchewan; Eastern Canada, which consists of the Company’s operations in the provinces of Ontario and Quebec; Central Canada, which consists of the Company’s operations in Manitoba; and the United States.
Summary
CASELLA Waste Systems has recently amended their $650M credit facility to link borrowing costs with sustainability goals, and adopted the Term SOFR as their reference rate. This is a positive move for investors, as it indicates a commitment to sustainability and lower borrowing costs. Moreover, it is a sign of financial stability, as the company is able to secure a stronger, cheaper line of credit.
Additionally, the switch to the Term SOFR is beneficial for investors as it can provide more accurate and transparent interest rates. Overall, CASELLA Waste Systems’ move to a greener, more cost-effective financial system is a positive signal for investors.
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