New York, USA – Companies that undergo execution-driven turnarounds may face challenges, but the results can be remarkable when the business improves. Enviri, previously known as Harsco, has seen a significant improvement in its hazardous waste business, leading to a 40% increase in its shares.
Despite macroeconomic challenges, Enviri’s management has shown improvements that are gaining confidence. With single-digit revenue growth potentially boosting mid-teens EBITDA margins, the company’s fair value could see an increase in the low-to-mid teens, offering further upside for investors.
In the metal waste processing sector, Enviri reported growth in its Environmental segment, with a focus on services and aluminum processing. However, challenges lie ahead due to global steel market conditions affecting the company’s volumes.
CleanEarth, another division of Enviri, has shown surprising performance improvements, driven by better pricing strategies, network efficiency, and increased volumes. While short-term prospects may be limited, the business is positioned for long-term growth in areas like PFAS remediation and zero-waste initiatives.
Enviri’s Rail business, although not aligning with its environmental services focus, remains part of the company’s strategy. Despite difficulties in profitability, efforts to sell the business have been halted to await better valuation opportunities.
Looking ahead, Enviri faces pressures on its various business segments in 2024. However, with a forecast of revenue acceleration in the coming years, the company aims for improved EBITDA margins and free cash flow performance. Long-term growth prospects signal higher FCF growth, with potential for stock valuation around $13 per share.
Overall, Enviri’s progress in leveraging waste-derived products for revenue growth and margin improvement positions it well for future success, despite facing headwinds in the near term. The company’s commitment to deleveraging and strategic reinvestment will be key priorities in driving sustainable growth in the years to come.
