Waste Connections Inc 4000 字深度研报

$Waste Connections(WCN.US)$Republic Services(RSG.US) Research on Waste Connections, the third-largest waste management company in North America, whose core value lies in "essential demand + consolidation," but high debt risks require caution.

🎯 Core logic: Waste management is an essential service, with annual demand growth of 5%-7% unaffected by economic fluctuations, similar to the stability of "utilities." The company consolidates a fragmented market through continuous acquisitions (covering 44 U.S. states and 6 Canadian provinces), with operating costs 20%+ lower than smaller competitors, high customer switching costs (3-5-year contracts), and strong regulatory policies creating a natural monopoly, holding ~15% market share. Revenue primarily comes from waste collection (>60%) and recycling, with a stable subscription-based fee model.

📈 Financial highlights: 10-year revenue CAGR of 14.5%, H1 2025 total revenue of $4.635B (+7.28% YoY). 2024 gross margin at 41.79% (vs. 39.83% in 2020), but dropped to 29.35% in Q2 2025; 2024 net margin at 6.92%, down from 11.59% in 2022. Positive free cash flow for 5 consecutive years, reaching $1.173B in 2024, with a cash conversion ratio of 3.6 (high efficiency). 2024 debt-to-asset ratio at 60.34% (approaching industry warning level), current ratio at 0.65 (high short-term debt pressure).