Casella Waste Systems reports Q2 results on July 30 with options traders notably less defensive than they've been for months — a shift that stands out against a backdrop of slowly rising short interest.
The most telling signal is the options market. The put/call ratio has eased to 0.63, running below its 20-day average of 0.68 and about three-quarters of a standard deviation beneath that mean. That's a meaningful rotation away from the defensive posture visible just weeks ago, when the PCR was above 0.90 through late June. Borrow conditions reinforce the picture: availability is ample at around 214% of outstanding short interest, cost to borrow has dropped roughly 12% over the past week to just 0.50%, and the borrow market is as relaxed as it has been in over a year. The stock itself closed at $91.10, up 2% on Monday but still 3.4% lighter over the past month — the kind of modest retreat that often reflects market-level noise rather than company-specific concern.
Short interest has nudged higher but tells a more nuanced story. It has climbed about 2.5% over the past week to roughly 7.7% of the free float — a material level, but one that has been largely range-bound for weeks rather than building aggressively. Days to cover stand at 8, which adds a mechanical squeeze risk if the print is well-received, though the combination of ample availability and low cost to borrow suggests no urgency among would-be short sellers to cover ahead of results.
The analyst community is broadly constructive but has been trimming ambitions. UBS maintained its Buy rating as recently as late June while cutting its target from $130 to $122 — the current price implies roughly 22% upside to the consensus mean of $111. JPMorgan sits at Neutral, and Barclays upgraded to Overweight in May with a $102 target, meaning the Street's debate is less about direction and more about degree. Bulls point to Casella's regional franchise strength across the Northeast, its diversified exposure to recycling, organics, and landfill volumes, and an EPS momentum factor ranking in the 77th percentile over 90 days. Bears flag the company's sensitivity to New England economic conditions, fuel and recycled commodity price swings, and a PE multiple near 66x that leaves little room for a stumble. Forward EPS growth ranks in the 93rd percentile, which is the number the market will weigh against that valuation.
Wasatch Advisors is worth noting among holders: the firm added nearly 950,000 shares in the most recent reporting period to hold 5.6% of the company — a meaningful active manager conviction bet. BlackRock remains the largest holder at 14.2%. Insider activity has been exclusively sell-side since at least March, with the President and CEO both trimming, though values and significance scores are modest enough that the pattern reads more like routine housekeeping than a bearish signal.
After the last two prints, CWST gained between 9% and 11% on the day and extended those gains over the following five sessions — the earnings report tomorrow will test whether that track record of upside surprise is repeatable at a valuation that has already begun to compress.
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