RSG Republic Services, Inc. - Fundamental Analysis
NEUTRAL
RSG Stock | Fundamental Analysis & Investment Insights
NYSE
•
Industrials
•
Waste Management
Current Price
$209.8
Analyst Target
$246.67
+17.6% Upside
52W High
$258.75
52W Low
$199.43
AI Analysis
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Confidence Score
72%
Analysis Accuracy
Republic Services (RSG) trades at a premium valuation with a P/E of 31.17, slightly above sector average, while delivering modest 3.3% YoY revenue growth and flat earnings growth, which creates tension between quality execution and stretched multiples. The company has a strong track record of earnings beats over the past 25 quarters—averaging a 3.46% surprise over the last four—with consistent margin expansion and solid ROE of 18.25%, outperforming many industrial peers on profitability stability. However, near-term price momentum is weak, with a 6M return of -14.9% and insider selling activity, offsetting bullish analyst sentiment (24 analysts, $246.67 target, buy rating). While RSG remains a high-quality operator in the waste management space with durable cash flows and a disciplined dividend policy, its current valuation demands near-perfect execution, leaving limited margin for error in a rising rate environment.
Key Strengths
Consistent earnings outperformance: 22 of the last 25 quarters beat EPS estimates, with an average surprise of 3.46% over the last four quarters
Superior profitability: 19.92% operating margin and 18.25% ROE exceed sector averages of 13.94% profit margin and 32.70% ROE (though ROE is lower than some peers like ITW)
Resilient business model: Waste management is recession-resilient with stable pricing power and high customer retention
Healthy dividend policy: 1.19% yield with a sustainable 35.14% payout ratio, indicating capital return discipline
Strong free cash flow generation implied by operating margin and low capex intensity typical in the sector
Key Risks
Premium valuation: P/E of 31.17 is high for only 3.3% revenue growth, especially versus peers like NSC (21.64 P/E) and ITW (23.64 P/E)
Near-term earnings contraction: -2.2% YoY earnings growth and -2.8% Q/Q decline raise concerns about margin compression or volume softness
Weak short-term price momentum: -14.9% over 6 months underperforms sector and key peers like NSC (+16.5%) and EMR (+6.7%)
Insider selling trend: Two sell transactions totaling $1.78M in the last six months with no buys, signaling caution from executives
Liquidity risk: Current ratio of 0.58 and quick ratio of 0.51 suggest tight working capital, below the sector average leverage but concerning for operational flexibility
AI Fair Value Estimate
Based on comprehensive analysis
$235.5
+12.2% above current price
Performance Snowflake
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Stock Price & Analyst Targets
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Historical Performance Trends
Long-term financial metrics and growth patterns
Valuation Metrics
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Profitability, Growth & Financial Health
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Sector Comparison & Peer Analysis
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Insider Trading & Analyst Ratings
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