Republic Services Inc RSG
Verdict: Hold. Fair value $198 against a price of $212 on 6 Jan 2026, 6% below the price.
In plain words
The case for: Wide competitive moat provides durability. Market leadership enables pricing power. Industry tailwinds with growing market.
The case against: The OCF / Net Income ratio, while exceptionally strong, has shown a slight decline over the past....
Main risks
- Elevated Leverage: Debt-to-Equity ratio is over 1.1 and Debt/EBITDA is near 3.0x, indicating a significant debt burden that warrants monitoring.
- High Capital Intensity: TTM CapEx of $1.81B consumes over 40% of TTM Operating Cash Flow, highlighting the business's reliance on continuous investment to maintain and grow its asset base.
- Slowing Revenue Growth: While still strong, the most recent annual revenue growth rate (7.2%) has decelerated from the prior year's rate (~11%), a trend to watch in future periods.
- Valuation prices in optimistic scenario (limited margin for error)
- Overhang: The stock is currently trading near its 52-week low, and some headlines question if RSG is...
- Market volatility