Quarterly earnings results are a good time to check in on a company’s progress, especially compared to its peers in the same sector. Today we are looking at Cintas (NASDAQ:CTAS) and the best and worst performers in the industrial & environmental services industry.
Growing regulatory pressure on environmental compliance and increasing corporate ESG commitments should buoy the sector for years to come. On the other hand, environmental regulations continue to evolve, and this may require costly upgrades, volatility in commodity waste and recycling markets, and labor shortages in industrial services. As for digitization, a theme that is impacting nearly every industry, the increasing use of data, analytics, and automation will give rise to improved efficiency of operations. Conversely, though, the benefits of digitization also come with challenges of integrating new technologies into legacy systems.
The 7 industrial & environmental services stocks we track reported a strong Q1. As a group, revenues beat analysts’ consensus estimates by 3.1% while next quarter’s revenue guidance was 2.3% above.
Thankfully, share prices of the companies have been resilient as they are up 6.8% on average since the latest earnings results.
Cintas (NASDAQ:CTAS)
Starting as a family business collecting and cleaning shop rags in Cincinnati, Cintas (NASDAQ:CTAS) provides corporate identity uniforms, facility services, and safety products to over one million businesses across North America.
Cintas reported revenues of $2.61 billion, up 8.4% year on year. This print was in line with analysts’ expectations, and overall, it was a strong quarter for the company with a solid beat of analysts’ EPS estimates and a narrow beat of analysts’ full-year EPS guidance estimates.
Cintas Total Revenue
Interestingly, the stock is up 10.9% since reporting and currently trades at $214.61.
With roots dating back to 1869 and a focus on creating cleaner industrial operations, CECO Environmental (NASDAQ:CECO) provides technology and expertise that helps industrial companies reduce emissions, treat water, and improve energy efficiency across various sectors.
CECO Environmental reported revenues of $176.7 million, up 39.9% year on year, outperforming analysts’ expectations by 17%. The business had a stunning quarter with a solid beat of analysts’ EPS estimates and full-year revenue guidance beating analysts’ expectations.
CECO Environmental Total Revenue
CECO Environmental pulled off the biggest analyst estimates beat and fastest revenue growth among its peers. The market seems happy with the results as the stock is up 37.4% since reporting. It currently trades at $26.38.
Operating a network of more than 350 facilities with 3,300 delivery routes serving customers weekly, Vestis (NYSE:VSTS) provides uniform rentals, workplace supplies, and facility services to over 300,000 business locations across the United States and Canada.
Vestis reported revenues of $665.2 million, down 5.7% year on year, falling short of analysts’ expectations by 4%. It was a softer quarter as it posted a significant miss of analysts’ EPS estimates.
Vestis delivered the weakest performance against analyst estimates in the group. As expected, the stock is down 32.4% since the results and currently trades at $5.89.
With a fleet of trucks making weekly deliveries to over 300,000 customer locations, UniFirst (NYSE:UNF) provides, rents, cleans, and maintains workplace uniforms and protective clothing for businesses across various industries.
UniFirst reported revenues of $602.2 million, up 1.9% year on year. This number met analysts’ expectations. Overall, it was a strong quarter as it also recorded a solid beat of analysts’ full-year EPS guidance estimates.
The stock is up 5% since reporting and currently trades at $183.53.
With a 50-year legacy of "Leading with Science" and operations on all seven continents, Tetra Tech (NASDAQ:TTEK) provides high-end consulting and engineering services focused on water management, environmental solutions, and sustainable infrastructure for government and commercial clients worldwide.
Tetra Tech reported revenues of $1.10 billion, up 4.9% year on year. This result topped analysts’ expectations by 6.6%. It was a strong quarter as it also produced an impressive beat of analysts’ EPS guidance for next quarter estimates and revenue guidance for next quarter exceeding analysts’ expectations.
Tetra Tech achieved the highest full-year guidance raise among its peers. The stock is up 14% since reporting and currently trades at $35.19.
As a result of the Fed’s rate hikes in 2022 and 2023, inflation has come down from frothy levels post-pandemic. The general rise in the price of goods and services is trending towards the Fed’s 2% goal as of late, which is good news. The higher rates that fought inflation also didn't slow economic activity enough to catalyze a recession. So far, soft landing. This, combined with recent rate cuts (half a percent in September 2024 and a quarter percent in November 2024) have led to strong stock market performance in 2024. The icing on the cake for 2024 returns was Donald Trump’s victory in the U.S. Presidential Election in early November, sending major indices to all-time highs in the week following the election. Still, debates around the health of the economy and the impact of potential tariffs and corporate tax cuts remain, leaving much uncertainty around 2025.
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