Clean Harbors Plummets 11.48% on Record Volume Surge to $570M Ranks 247th in Market Activity

Market Snapshot

Clean Harbors (CLH) experienced a sharp decline on October 29, 2025, with its stock price falling 11.48% following the release of third-quarter earnings. Despite a surge in trading volume—rising 265.58% to $0.57 billion—the stock ranked 247th in market activity for the day. The drop came after the company reported revenue of $1.55 billion, missing the $1.57 billion consensus estimate by 1.3%, and earnings per share (EPS) of $2.21, which fell short of the $2.40 expected by analysts. This marked a significant earnings surprise of -6.75%, contributing to the stock’s underperformance. Year-to-date, CLH has gained 7%, lagging behind the S&P 500’s 17.2% total return, highlighting its struggle to keep pace with broader market trends.

Key Drivers

Earnings and Revenue Misses

Clean Harbors’ Q3 results fell below expectations on both the top and bottom lines, triggering an immediate sell-off. The company reported GAAP EPS of $2.21, a 7.8% miss relative to the $2.40 analyst consensus, and revenue of $1.55 billion, which fell 1.6% short of the $1.57 billion target. These outcomes contrasted with management’s earlier guidance, as the company had indicated challenges in key verticals such as chemicals and refining, as well as the absence of large emergency response projects during the quarter. The misses exacerbated concerns about the company’s ability to maintain its historical growth trajectory, particularly given its adjusted EBITDA of $320.2 million—$11.6 million below the $332 million estimate—despite a 6% year-over-year increase.

Industry Context and Earnings Outlook

The environmental services sector, in which Clean Harbors operates, faces structural headwinds. The Zacks Waste Removal Services industry, where CLH is categorized, ranks in the bottom 35% of Zacks’ 250+ industries, with empirical research suggesting that the top 50% outperform the bottom half by a 2:1 ratio. Compounding this, Clean Harbors’ earnings estimate revisions trend has been unfavorable, leading to a Zacks Rank #4 (Sell) designation. Analysts project that the stock will underperform the market in the near term, with the current consensus EPS estimate for Q4 at $1.63 on $1.49 billion in revenue. This weak outlook reflects broader skepticism about the company’s ability to reverse its earnings momentum, despite its 27.5% five-year CAGR in EPS and 13.1% annualized revenue growth over the same period.

Operational Performance and Guidance

While Clean Harbors reported 12% growth in Technical Services and 8% in Safety-Kleen Environmental Services, these gains were offset by softer demand in other segments. The company’s full-year adjusted EBITDA guidance was raised to $1.155 billion–$1.175 billion, reflecting a 4% year-over-year increase, but this fell short of the $1.18 billion midpoint previously estimated by analysts. Additionally, CLH revised its 2025 adjusted free cash flow guidance upward to $455 million–$495 million, a 30% increase from 2024, signaling improved cost management and operational efficiency. However, these updates were insufficient to offset the disappointment from the Q3 results. The company also announced a $210–$220 million investment in a re-refinery byproduct processing plant, a move aimed at long-term value creation but unlikely to provide near-term relief.

Analyst Sentiment and Valuation

Analyst sentiment remains mixed. While 10 of 12 brokerage firms maintain a “buy” rating, the median 12-month price target of $255.00 implies only a 3.5% upside from CLH’s October 28 closing price of $246.19. This cautious stance contrasts with the company’s strong free cash flow margin of 13.4% and operating margin of 12.5%, which have remained stable despite industry pressures. However, the Zacks Rank’s Sell rating and the downward revision of 2025 revenue estimates to $6.05 billion—from $6.13 billion in July—suggest lingering concerns about demand sustainability. Clean Harbors’ valuation, trading at 29 times next 12-month earnings, is slightly above its three-month average of 28, reflecting a premium to its peers but limited upside potential given the current earnings outlook.

Long-Term Growth Prospects

Despite the near-term challenges, Clean Harbors’ long-term fundamentals remain intact. Its 13.1% five-year revenue growth and 27.5% CAGR in EPS outpace industry averages, supported by a disciplined approach to cost control and share repurchases (which reduced its share count by 3.6% over five years). However, the recent slowdown in revenue growth—5.6% annualized over two years—raises questions about the company’s ability to scale its operations in a high-interest-rate environment. Management’s emphasis on expanding its Technical Services and Safety-Kleen segments, coupled with the new re-refinery project, could provide catalysts for future growth. For now, though, investors appear to be pricing in a continuation of the current earnings trajectory, with the stock’s 6.2% pre-market decline underscoring the market’s focus on short-term execution risks.