Is Clean Harbors (CLH) Still Undervalued Amid Recent Volatility and Industry Tailwinds?

Clean Harbors (NYSE: CLH) has long been a cornerstone of the environmental services sector, leveraging its expertise in waste management, remediation, and industrial services to navigate macroeconomic cycles. With Q3 2025 results now public, the company's financial performance, strategic investments, and valuation metrics warrant a closer look. Is CLH's current price still undervalued, or have rising industry multiples and regulatory uncertainties tempered its long-term appeal?

Q3 2025: Strong EBITDA Growth and Margin Expansion

Clean Harbors reported Q3 2025 revenue of $1.55 billion, a modest 1.3% increase from $1.53 billion in Q3 2024. However, the real story lies in its EBITDA performance. Adjusted EBITDA rose 6% year-over-year to $320.2 million, with a margin of 20.7%-a 120 basis point improvement in its Environmental Services (ES) segment alone according to Q3 2025 financial results. This marks the 14th consecutive quarter of margin expansion for ES, driven by robust demand for PFAS destruction, incineration services, and Safety-Kleen's lubricant sales according to Q3 2025 financial results.

The company's Technical Services division saw 12% revenue growth, fueled by project activity and heightened demand for PFAS solutions, while Safety-Kleen Environmental Services grew 8% due to pricing power and volume gains according to Q3 2025 financial results. These results underscore Clean Harbors' ability to monetize regulatory tailwinds, particularly in hazardous waste management and environmental remediation.

Intrinsic Value and Guidance Revisions

According to a Discounted Cash Flow (Growth Exit 5Y) model, Clean Harbors' intrinsic value is estimated at $279.21 per share as of December 20, 2025, implying a 16.7% upside from its current market price of $239.30 as reported by Yahoo Finance. This premium is supported by the company's revised full-year 2025 adjusted EBITDA guidance of $1.155 billion to $1.175 billion-a 4% year-over-year increase-and raised free cash flow guidance of $455 million to $495 million according to Q3 2025 financial results.

The intrinsic value estimate also factors in Clean Harbors' capital allocation strategy, including its $210 million to $220 million investment in a new Solvent De-Asphalting (SDA) plant. This project, expected to generate $30 million to $40 million in annual EBITDA by 2028, highlights the company's commitment to high-margin, long-term growth according to Q3 2025 financial results.

Industry Tailwinds and Valuation Realism

The environmental services sector is poised for sustained growth. In the U.S., the environmental consulting market is projected to expand at a 2.9% CAGR in 2025, driven by climate change urgency, regulatory tightening, and corporate sustainability mandates according to IBISWorld. Globally, the market is expected to grow at 7.95% CAGR through 2034, with water treatment and PFAS remediation emerging as key drivers according to Precedence Research.

Clean Harbors' valuation appears anchored to these trends. Its P/EBITDA ratio of 11.80 is a premium to the median of its Waste Management peers, but this premium is justified by its superior EBITDA margins (20.7% vs. Waste Management's 29.6%-30.2% operating margin according to Catalyst) and recurring revenue streams. While Waste Management trades at a P/E of 30.4x to 32.9x according to DCF Modeling, Clean Harbors' 11.8x multiple reflects a more conservative valuation, particularly given its exposure to high-margin environmental services.

Peer Comparisons and Growth Risks

Clean Harbors' revenue growth, however, lags behind the broader industry. Year-to-date revenue grew 2.85% through September 2025, trailing the Waste Management industry's 10.25% growth rate according to Wall Street Zen. This discrepancy stems from its reliance on project-based Technical Services and the cyclical nature of remediation work. Yet, Q1 2025 performance-where CLH outgrew its peers by 4.53 percentage points-suggests resilience in its core markets according to CSI Market.

Risks remain. Political uncertainties, such as potential regulatory rollbacks or shifts in environmental policy, could dampen demand for remediation services. Additionally, the SDA plant's $210 million price tag represents a significant capital outlay, with returns not materializing until 2028 according to Q3 2025 financial results. Investors must weigh these risks against the company's strong free cash flow generation and margin discipline.

Conclusion: A Compelling Case for Long-Term Investors

Clean Harbors' Q3 2025 results reaffirm its position as a leader in environmental services, with margin expansion, EBITDA growth, and strategic investments in high-margin projects. While its P/EBITDA ratio is elevated relative to some peers, the intrinsic value estimate of $279.21 suggests the market has yet to fully price in its long-term potential.

For investors, the key question is whether the company can sustain its margin momentum and execute its SDA project without operational hiccups. Given the industry's tailwinds and Clean Harbors' track record of margin improvement, the current valuation appears realistic but not overly optimistic. Those comfortable with the company's capital allocation and regulatory exposure may find CLH a compelling addition to a diversified portfolio.