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Casella Waste Systems (CWST): analysis traps
Where its figures could mislead a reader, and what to check before taking them at face value · Data: Q2 2026, to Jun 30, 2026, filed Aug 7, 2026; rules v1.1
Casella Waste Systems (CWST): 1 rule of 10 triggered on the filings to Jun 30, 2026: adjusted profit = economic profit. 1 to review; 2 not applicable. Each is a question to verify, with the normal explanation that would produce the same figures.
Check these first
Adjusted profit = economic profit Triggered · severity high · confidence low
Adjusted EPS was at least 10% above GAAP in 3 of the last 3 quarters (on average 97% above). Costs excluded every quarter (restructuring, stock compensation, amortisation of acquired intangibles, litigation) are a recurring cost of the business, not a one-off.
Innocent reading: A genuine one-off this year (an impairment, a settlement) that happens to span several quarters.
A precise DCF value = the true value To review · confidence high
The DCF's point value is 1.44 a share (price 98.21); 59% of it is the terminal value, a number about years no one has seen. Moving operating margin by ±3 pts alone takes it from -13.44 to 16.32; across every method the research ran the range is -32 to 175. The value is a range; the decimals are not information.
Innocent reading: A stable, mature business with a narrow range of outcomes, where the point value is a fair summary.
Every rule
A01 FCF growth = the business improved Not triggered confidence medium
Free cash flow rose $7M to $85M; working capital and lower capex explain 0% of it, so most of the gain is in operating cash flow itself.
The figures and how they are read
| Fiscal year before | FY2024 |
| Fiscal year | FY2025 |
| Operating cash flow, year before | $281M |
| Operating cash flow | $330M |
| Capex, year before | $203M |
| Capex | $245M |
| Free cash flow, year before | $78M |
| Free cash flow | $85M |
| Change in FCF | $7M |
| Change in capex | $42M |
| Working capital: change in its cash contribution | −$12M |
| Of which: capex cut | 0.00 |
| Of which: working capital released | 0.00 |
| Share of the increase that need not repeat | +0.0% |
| Operating cash flow before working capital: change | 60782000.00 |
FCF = operating cash flow − cash capex; ΔFCF = ΔOCF − ΔCapEx; the working-capital part is the change in the cash-bridge items (receivables, inventory, payables, accruals), with the sign of the cash flow statement
Source: FY2025 (cash flow statement, fiscal year) · FY2024 (cash flow statement, fiscal year before)
A07 Stock compensation added back = no economic cost Not triggered confidence high
Stock compensation is 0.8% of revenue: small enough that adding it back changes little.
The figures and how they are read
| Fiscal year | FY2025 |
| Stock compensation | $14M |
| Revenue | $1.8B |
| SBC / revenue | +0.8% |
| Buybacks | 0 |
| Buybacks / SBC | 0.0 |
| Diluted shares, year before | 59.7M shares |
| Diluted shares | 63.6M shares |
| Diluted shares: change | +6.5% |
SBC / revenue from the cash flow statement's add-back; the diluted weighted share count year over year; buybacks from the financing section
Source: FY2025 (stock compensation, buybacks and the diluted share count, fiscal year)
B02 Receivables growing = future cash is certain Not triggered confidence medium
Receivables grew 23% against revenue 17% in Q2 2026; DSO 33 against a median of 36: collections are keeping pace with sales.
The figures and how they are read
| Quarter | Q2 2026 |
| Revenue, year over year | +16.9% |
| Receivables, year over year | +23.2% |
| Quarter before | Q1 2026 |
| Revenue y/y, quarter before | +9.6% |
| Receivables y/y, quarter before | +5.9% |
| Days sales outstanding | 33.1 |
| DSO, median of eight quarters | 35.8 |
| Receivables | $220M |
| Revenue | $544M |
receivables and revenue against the same quarter a year earlier; DSO = receivables / quarterly revenue × days, against the median of the eight quarters before
Source: Q2 2026 (receivables and revenue) · Q2 2025 (the same quarter a year earlier)
B08 Adjusted profit = economic profit Triggered severity high · confidence low
Adjusted EPS was at least 10% above GAAP in 3 of the last 3 quarters (on average 97% above). Costs excluded every quarter (restructuring, stock compensation, amortisation of acquired intangibles, litigation) are a recurring cost of the business, not a one-off.
The figures and how they are read
| Quarter / adjusted EPS / GAAP EPS / gap | 2025-09-30 / 0.42 / 0.16 / 0.619; 2026-03-31 / 0.2 / -0.09 / 1.45; 2026-06-30 / 0.4 / 0.06 / 0.85 |
| Quarters with adjusted ≥ 10% above GAAP | 3 |
| Quarters compared | 3 |
| Latest gap | +85.0% |
the analysts' 'actual' (usually the company's adjusted EPS) against GAAP net income ÷ diluted shares for the matching quarter; a gap of 10% or more counts (the stand-in until three releases' reconciliation tables are on file)
Source: 2025-09-30 (adjusted 0.42 vs GAAP 0.16) · 2026-03-31 (adjusted 0.20 vs GAAP -0.09) · 2026-06-30 (adjusted 0.40 vs GAAP 0.06)
What would explain it innocently
- A genuine one-off this year (an impairment, a settlement) that happens to span several quarters
- Amortisation of acquired intangibles, which many investors also exclude by choice
- The analysts' 'actual' is not the company's own adjusted figure
What to look for in the filing
- The reconciliation table in the earnings release: which items, how much, how often
- Whether the same items were excluded in earlier years
What would show the trap does not apply
- The reconciliation shows the excluded items ending (a restructuring with its final charge, a settlement paid) and the gap to GAAP closes in the next quarters
- The excluded items are only amortisation of acquired intangibles and the cash paid for the deals is in the investing cash flow
Look again: next filing.
C02 Low net debt = no refinancing risk Not triggered confidence medium
$26M comes due within a year, 5.1× covered by cash and investments of $26M plus $106M of free cash flow.
The figures and how they are read
| Cash and investments | $26M |
| Debt | $1.4B |
| Net debt | $1.3B |
| Due within a year | $26M |
| Read from | the debt maturity table |
| Free cash flow, twelve months | $106M |
| Cash plus free cash flow | $131M |
| Coverage of what is due | 5.1 |
| Due in the second year | $23M |
| Balance sheet date | 2026-06-30 |
due within a year from the maturity table (else the current portion of debt), against cash and investments plus free cash flow over the last twelve months (zero if negative); no credit lines assumed
Source: FY2025 (debt maturities, cash and investments)
D03 EPS growth = profit growth Not triggered confidence high
EPS fell 28% and net income fell 28% in Q2 2026; the share count rose 0.2%: EPS growth follows profit growth.
The figures and how they are read
| Quarter | Q2 2026 |
| Quarter before | Q2 2025 |
| EPS, year before | $0.08 |
| EPS | $0.06 |
| Net income, year before | $5M |
| Net income | $4M |
| Diluted shares, year before | 63.6M shares |
| Diluted shares | 63.7M shares |
| EPS growth | -28.1% |
| Net income growth | -27.6% |
| Diluted shares: change | +0.2% |
| eps from profit | -$0.02 |
| eps from share count | $0.00 |
EPS and net income against the same quarter a year earlier; the EPS bridge attributes the change to profit first, then to the share count (the order is fixed and disclosed)
Source: Q2 2026 (net income, diluted shares, EPS) · Q2 2025 (the same quarter a year earlier)
E02 Low P/E at a cyclical peak = undervalued Not triggered confidence medium
Net income of $6M is not at a cyclical high against the last eight years (median $32M, best $91M): the P/E of 1096.5× is on a normal year.
The figures and how they are read
| market value | $6.3B |
| net income ttm | $6M |
| pe ttm | 1,096.50 |
| net income median fy | $32M |
| pe mid cycle | 197.60 |
| net income peak fy | $91M |
| years | FY2018 / 6.0; FY2019 / 32.0; FY2020 / 91.0; FY2021 / 41.0; FY2022 / 53.0; FY2023 / 25.0; FY2024 / 14.0; FY2025 / 8.0 |
| down years in window | 4 |
P/E on the trailing twelve months' net income against the P/E on the median net income of the last eight fiscal years (a mid-cycle stand-in); 'at a peak' = this year's profit at or above 90% of the best year and at least 1.3× the median
Source: Q2 2026 (net income, trailing twelve months)
E07 A precise DCF value = the true value To review confidence high
The DCF's point value is 1.44 a share (price 98.21); 59% of it is the terminal value, a number about years no one has seen. Moving operating margin by ±3 pts alone takes it from -13.44 to 16.32; across every method the research ran the range is -32 to 175. The value is a range; the decimals are not information.
The figures and how they are read
| dcf value | 1.44 |
| price | 98.21 |
| terminal value share | +58.5% |
| swing by input | Operating margin / ±3 pts / -13.44 / 16.32; WACC / ±1 pt / -1.71 / 6.35; Revenue growth (each year) / ±5 pts / -1.84 / 5.3; Capex (share of revenue) / ±1 pt / -0.26 / 3.14 |
| range all methods | -32.05; 175.11 |
the DCF's point value against the share of it that is the terminal value and the value at each input moved by one step (growth ±5 pts, WACC ±1 pt, margin ±3 pts …); the range across every method the research ran
Source: 2026-11-08 (valuation research)
What would explain it innocently
- A stable, mature business with a narrow range of outcomes, where the point value is a fair summary
- The inputs that matter most are themselves well known (a regulated return, a long contract)
What to look for in the filing
- Which input you believe differs from the research's and why
- What the price implies for growth (the reverse DCF on the fair-value page)
What would show the trap does not apply
- The DCF's value is robust to the terminal growth and discount rate (the range's low end is still above the price)
- The company's cash flows over the next three years track the DCF's early years
Look again: next filing.
J06 A bank's low P/E and high profit = safe Not applicable
not a bank
J08 A REIT's low net income = the dividend is unsafe Not applicable
not a REIT
What the statuses mean
Triggered: the filings show the pattern; read the normal explanations and the missing evidence before concluding anything. To review: one quarter or a weak signal; a reader's judgement, not a pattern. Not triggered: the pattern is absent on these figures. Insufficient data: the filings read so far do not hold what the rule needs; this is not a clean bill. Not applicable: the rule is not meant for this kind of company (a bank's working capital, a loss-making quarter's EPS growth). Out of date: the latest filing is more than fifteen months old.
Severity is what the pattern could mean for cash, value or solvency; confidence is how reliable the inputs and the reading are. The two are kept apart.
Record a view
A reader's judgement, grounds, what would change it and the next review; kept in the browser (needs JavaScript).
Every rule and the companies it triggers on → Casella Waste Systems: cash flow → Earnings quality score →
Each rule reads the company's own filings by a fixed formula and says what would explain the same figures innocently. A triggered rule is a question to verify, not a finding of manipulation, and not a view on the stock. Missing data is shown as missing, never as clear. Not investment advice.