Waste management company Casella (NASDAQ: CWST) reported Q1 CY2026 results beating Wall Street’s revenue expectations, with sales up 9.6% year on year to $457.3 million. The company expects the full year’s revenue to be around $2.07 billion, close to analysts’ estimates. Its non-GAAP profit of $0.20 per share was 69.6% above analysts’ consensus estimates.

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“We are pleased with our strong start to the year as our execution delivered solid financial and operating performance in the quarter,” said Ned Coletta, President and CEO of Casella Waste Systems, Inc.

Company Overview

Starting with the founder picking up garbage with a pickup truck he purchased using savings from high school, Casella (NASDAQ: CWST) offers waste management services for businesses, residents, and the government.

Revenue Growth

A company’s long-term performance is an indicator of its overall quality. Any business can have short-term success, but a top-tier one grows for years. Over the last five years, Casella Waste Systems grew its sales at an incredible 19.2% compounded annual growth rate. Its growth beat the average industrials company and shows its offerings resonate with customers.

Long-term growth is the most important, but within industrials, a half-decade historical view may miss new industry trends or demand cycles. Casella Waste Systems’s annualized revenue growth of 18.2% over the last two years aligns with its five-year trend, suggesting its demand was predictably strong.

This quarter, Casella Waste Systems reported year-on-year revenue growth of 9.6%, and its $457.3 million of revenue exceeded Wall Street’s estimates by 0.5%.

Looking ahead, sell-side analysts expect revenue to grow 9.3% over the next 12 months, a deceleration versus the last two years. Still, this projection is admirable and suggests the market is baking in success for its products and services.

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Operating Margin

Casella Waste Systems was profitable over the last five years but held back by its large cost base. Its average operating margin of 5.5% was weak for an industrials business. This result is surprising given its high gross margin as a starting point.

Looking at the trend in its profitability, Casella Waste Systems’s operating margin decreased by 4.6 percentage points over the last five years. This raises questions about the company’s expense base because its revenue growth should have given it leverage on its fixed costs, resulting in better economies of scale and profitability. Casella Waste Systems’s performance was poor no matter how you look at it - it shows that costs were rising and it couldn’t pass them onto its customers.

In Q1, Casella Waste Systems generated an operating margin profit margin of 1.1%, in line with the same quarter last year. This indicates the company’s cost structure has recently been stable.

Earnings Per Share

Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions.

Casella Waste Systems’s EPS grew at an unimpressive 7.3% compounded annual growth rate over the last five years, lower than its 19.2% annualized revenue growth. This tells us the company became less profitable on a per-share basis as it expanded.

Diving into the nuances of Casella Waste Systems’s earnings can give us a better understanding of its performance. As we mentioned earlier, Casella Waste Systems’s operating margin was flat this quarter but declined by 4.6 percentage points over the last five years. Its share count also grew by 23.7%, meaning the company not only became less efficient with its operating expenses but also diluted its shareholders.

Like with revenue, we analyze EPS over a more recent period because it can provide insight into an emerging theme or development for the business.

For Casella Waste Systems, its two-year annual EPS growth of 24.2% was higher than its five-year trend. This acceleration made it one of the faster-growing industrials companies in recent history.

In Q1, Casella Waste Systems reported adjusted EPS of $0.20, up from $0.19 in the same quarter last year. This print easily cleared analysts’ estimates, and shareholders should be content with the results. Over the next 12 months, Wall Street expects Casella Waste Systems’s full-year EPS of $1.28 to shrink by 7.2%.

Key Takeaways from Casella Waste Systems’s Q1 Results

It was good to see Casella Waste Systems beat analysts’ EPS expectations this quarter. We were also happy its EBITDA outperformed Wall Street’s estimates. On the other hand, its adjusted operating income missed. Overall, this print had some key positives. The stock traded up 3.4% to $82.00 immediately after reporting.

Should you buy the stock or not? We think that the latest quarter is only one piece of the longer-term business quality puzzle. Quality, when combined with valuation, can help determine if the stock is a buy. We cover that in our actionable full research report which you can read here (it’s free).