Core Viewpoint - Cenovus Energy Inc. (CVE) is positioned as a leading integrated energy company in Canada, focusing on low-cost oil sands and heavy oil production, with ambitious growth targets for upstream production by 2026 [2][3]. Upstream Operations - CVE's upstream earnings are primarily driven by its Oil Sands business, which supports low-cost production. The company aims for a 4% year-over-year growth in upstream production, targeting 945,000 to 985,000 barrels of oil equivalent per day (BOE/d) by 2026 [3][8]. - The acquisition of MEG Energy in November 2025 is expected to add 110,000 barrels per day of low-cost oil sands production and facilitate integrated development in the Christina Lake region, enhancing production levels in 2026 [3][8]. Downstream Operations - CVE's downstream operations help mitigate the impact of fluctuations in West Texas Intermediate (WTI) crude prices, thereby supporting overall profitability despite upstream volatility [4][8]. Industry Comparison - Other Canadian integrated energy companies, such as Canadian Natural Resources (CNQ) and Imperial Oil Limited (IMO), are also setting ambitious production targets for 2026, with CNQ aiming for 1,590 to 1,650 thousand barrels of oil equivalent per day (MBOE/d), representing a 3% increase from 2025 [5][6]. Financial Performance - CVE's shares have increased by 19.8% over the past year, slightly underperforming compared to the industry average of 22.6% [7]. - The company trades at a trailing 12-month enterprise value to EBITDA (EV/EBITDA) of 5.65X, which is below the industry average of 6.14X [10]. - The Zacks Consensus Estimate for CVE's 2025 earnings remains unchanged, with projected earnings of $1.54 per share [11][12].

Core Viewpoint - Investors are evaluating Montrose Environmental (MEG) and Waste Management (WM) to determine which stock represents a better value opportunity in the Waste Removal Services sector [1] Group 1: Company Rankings and Analyst Outlook - Montrose Environmental has a Zacks Rank of 2 (Buy), indicating a more favorable earnings estimate revision activity compared to Waste Management, which has a Zacks Rank of 3 (Hold) [3] - The improving analyst outlook for MEG suggests a stronger potential for value investors [3] Group 2: Valuation Metrics - MEG has a forward P/E ratio of 17.40, significantly lower than WM's forward P/E of 26.28, indicating that MEG may be undervalued [5] - The PEG ratio for MEG is 0.91, while WM's PEG ratio is 2.44, further suggesting that MEG is a more attractive investment based on expected earnings growth [5] - MEG's P/B ratio stands at 1.98, compared to WM's P/B of 9.22, reinforcing MEG's position as the superior value option [6] - Overall, MEG has earned a Value grade of B, while WM has a Value grade of C, highlighting MEG's stronger valuation metrics [6]

LITTLE ROCK, Ark.--(BUSINESS WIRE)--Montrose Environmental Group, Inc. (NYSE: MEG) to Attend the 28th Annual Needham Growth Conference. ...

Core Viewpoint - Investors in the Waste Removal Services sector should consider Montrose Environmental (MEG) and Waste Management (WM) for potential undervalued stock opportunities [1] Valuation Metrics - Montrose Environmental has a forward P/E ratio of 17.04, while Waste Management has a forward P/E of 26.06 [5] - MEG's PEG ratio is 0.89, indicating better expected EPS growth compared to WM's PEG ratio of 2.42 [5] - MEG's P/B ratio is 1.94, significantly lower than WM's P/B of 9.14, suggesting MEG is more attractively valued [6] Analyst Outlook - Montrose Environmental holds a Zacks Rank of 2 (Buy), indicating a more favorable earnings estimate revision activity compared to Waste Management's Zacks Rank of 3 (Hold) [3] - The stronger estimate revision activity for MEG suggests a more positive analyst outlook, making it a more appealing option for value investors [7] Value Grades - MEG has a Value grade of B, while WM has a Value grade of C, reflecting MEG's superior valuation metrics [6]

Core Viewpoint - Montrose Environmental (MEG) is currently viewed as a better value opportunity compared to Zurn Water (ZWS) based on various financial metrics and rankings [1]. Group 1: Zacks Rank and Earnings Outlook - Montrose Environmental has a Zacks Rank of 2 (Buy), indicating a positive earnings estimate revision trend, while Zurn Water has a Zacks Rank of 3 (Hold) [3]. - The Zacks Rank system is designed to identify companies with improving earnings outlooks, which favors MEG over ZWS [3]. Group 2: Valuation Metrics - MEG has a forward P/E ratio of 16.27, significantly lower than ZWS's forward P/E of 28.23, suggesting that MEG is undervalued relative to ZWS [5]. - MEG's PEG ratio is 0.85, indicating a favorable growth outlook compared to ZWS's PEG ratio of 2.01, which suggests that ZWS may be overvalued [5]. - MEG's P/B ratio stands at 1.98, while ZWS has a P/B ratio of 4.91, further supporting the notion that MEG is a more attractive value option [6]. Group 3: Overall Value Assessment - Based on the aforementioned metrics, MEG holds a Value grade of B, whereas ZWS has a Value grade of C, reinforcing MEG's position as the superior value investment at this time [6].

Core Insights - Montrose Environmental Group, Inc. is focused on enhancing environmental stewardship and supporting economic development through federal funding for brownfields restoration and community revitalization [1] Group 1 - In 2025, Montrose assisted with over 20 EPA Grant applications totaling more than $45 million in potential awards [1] - Many communities that received assistance were previously unaware of their eligibility for funding or lacked a compelling narrative to present [1]

Group 1 - Robert F. Abbott has been managing family investments since 1995 and incorporated options trading in 2010, focusing on covered calls and collars with long stocks [1] - Abbott is a freelance writer with a project aimed at providing information for new and intermediate-level mutual fund investors [1] - He holds a Bachelor of Arts and a Master of Business Administration (MBA) degree [1]

Group 1 - Montrose Environmental Group (MEG) has achieved profitability for two consecutive quarters [1] - MEG services are experiencing increased demand, with a 5-year average growth rate [1]

Financial Performance - Revenues for the three months ended September 30, 2025, increased by $46.2 million or 25.9% compared to the same period in 2024, driven by strong organic growth and acquisitions [158]. - Revenues for the nine months ended September 30, 2025, increased by $129.9 million or 25.6% compared to the same period in 2024, with significant contributions from all segments and emergency response revenue [159]. - Total revenues for the nine months ended September 30, 2025, were $637.3 million, representing a 25.7% increase from $507.3 million in the same period of 2024 [175]. - Total reportable segment revenues for the three months ended September 30, 2025, increased by 25.9% to $224.9 million compared to $178.7 million for the same period in 2024 [176]. - For the nine months ended September 30, 2025, total reportable segment revenues increased by 25.6% to $637.3 million from $507.3 million in 2024 [176]. Segment Performance - Total revenue from emergency response related services was $11.5 million for the three months ended September 30, 2025, compared to $12.0 million in 2024, while for the nine months, it increased to $73.9 million from $40.6 million [154]. - Assessment, Permitting and Response segment revenues increased by 75.1% to $91,081,000 for the three months ended September 30, 2025 compared to $52,019,000 in 2024 [176]. - Measurement and Analysis segment revenues increased by 7.5% to $62,958,000 for the three months ended September 30, 2025 compared to $58,583,000 in 2024 [176]. - Remediation and Reuse segment revenues increased by 4.1% to $70,849,000 for the three months ended September 30, 2025 compared to $68,085,000 in 2024 [176]. - The Assessment, Permitting, and Response segment saw organic growth of $39.6 million and $45.0 million for the three and nine months ended September 30, 2025, respectively [176]. - Measurement and Analysis segment revenues increased by $2.6 million and $16.0 million for the three and nine months ended September 30, 2025, respectively, driven by strong organic growth [177]. - Remediation and Reuse segment revenues increased by $2.8 million and $12.4 million for the three and nine months ended September 30, 2025, respectively, with additional revenue from acquisitions of $7.6 million [179]. Expenses and Costs - Cost of revenues for the three months ended September 30, 2025, increased by $30.7 million or 29.1%, with a cost of revenue as a percentage of revenue at 60.6% [161]. - Selling, general and administrative expenses for the three months ended September 30, 2025, increased by $4.8 million or 7.9%, with a decrease in expenses as a percentage of revenues to 29.2% [165]. - Amortization expense for the three months ended September 30, 2025, was $7.3 million, down from $9.0 million in 2024, while for the nine months, it decreased to $23.0 million from $24.6 million [144]. - Corporate and other costs increased by $1,570,000 for the three months ended September 30, 2025 compared to the same period in 2024, primarily due to higher bonus accruals [183]. Income and Earnings - Net income for the three months ended September 30, 2025, was $8.4 million, compared to a net loss of $10.6 million in the same period in 2024 [157]. - Net income per share attributable to common stockholders for the three months ended September 30, 2025, was $0.24, compared to a loss of $0.39 in the same period in 2024 [157]. - Segment Adjusted EBITDA for total reportable segments was $47,131,000 for the three months ended September 30, 2025, a 30.1% increase from $36,213,000 in 2024 [180]. Cash Flow and Financing - For the nine months ended September 30, 2025, net cash provided by operating activities was $55.5 million, a significant increase of $65.3 million compared to a net cash used of $9.7 million for the same period in 2024 [190]. - Net cash used in investing activities for the nine months ended September 30, 2025, was $12.6 million, significantly lower than $137.2 million for the same period in 2024, which included multiple acquisitions [193][194]. - Net cash used in financing activities for the nine months ended September 30, 2025, was $49.2 million, driven by repayments of borrowings totaling $495.6 million [195]. - As of September 30, 2025, the company had $191.7 million available under the 2025 Credit Facility and $6.7 million in cash on hand [185]. Interest and Tax Expenses - Interest expense for the three months ended September 30, 2025, was $5.0 million, compared to $4.1 million in the same period of 2024, indicating an increase in financing costs [151]. - Interest expense, net for the nine months ended September 30, 2025, increased by 30.2% to $14.9 million compared to $11.4 million for the same period in 2024, primarily due to higher interest rates and debt balances [172]. - Income tax expense for the three months ended September 30, 2025 was $7,281,000, a 432.2% increase from $1,368,000 in the same period of 2024 [175]. - Income tax expense for the nine months ended September 30, 2025, increased by 148.7% to $11.1 million compared to $4.5 million for the same period in 2024 [174]. Acquisitions and Future Outlook - During the three months ended September 30, 2025, no acquisitions were completed, while two acquisitions were completed in the same period of 2024, generating revenues of $4.3 million, representing 2.4% of total revenues [144]. - The company expects revenue growth to continue to be driven significantly by acquisitions, despite a temporary pause in acquisition activities [144]. - The company anticipates that amortization of identifiable intangible assets and other acquisition-related costs will continue to be significant as it pursues further acquisitions [144]. - The company anticipates making up to $23.4 million in aggregate earn-out payments between 2025 and 2027 related to acquisitions [185]. - The company announced a stock repurchase program of up to $40.0 million on May 7, 2025, although no repurchases were made in the nine months ended September 30, 2025 [199].

Financial Data and Key Metrics Changes - The company achieved a record third quarter performance with a 26% year-over-year revenue growth and a 19% increase in consolidated adjusted EBITDA [8][9] - Year-to-date revenue increased by 25.6% to $637.3 million, while year-to-date consolidated adjusted EBITDA rose by 35% to $92.3 million [26][27] - Positive GAAP net income of $8.4 million was reported, marking a significant turnaround from a net loss of $10.6 million in the prior year [27][28] Business Line Data and Key Metrics Changes - The Assessment, Permitting, and Response segment saw a 75% revenue increase to $91.1 million, driven by strong demand for non-response consulting and advisory services [31] - The Measurement and Analysis segment's revenue grew by 7.5% to $63 million, with adjusted EBITDA rising to $17.3 million, reflecting a 460 basis point margin improvement [32] - The Remediation and Reuse segment's revenue increased to $70.8 million, although adjusted EBITDA declined to $9.4 million due to losses from the wind-down of the renewables business [32] Market Data and Key Metrics Changes - The company noted that state and local governments are stepping in to fill gaps left by the U.S. Federal government, creating unexpected growth opportunities [12] - Increased industrial activity, particularly in the energy and mining sectors, is driving demand for the company's services [73] Company Strategy and Development Direction - The company plans to exit its renewable service line by the end of the year, reallocating resources to higher return opportunities [20][21] - Future growth is expected to be driven by organic growth of 7 to 9% annually, with EBITDA growth anticipated to outpace revenue growth [24] - The company aims to restart acquisitions in 2026, focusing on strategic fit and potential for outsized financial returns [24][62] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the business's prospects, citing strong client demand and the resilience of the business model amid external economic factors [10][13] - The company is well-positioned to capture growth from regulatory changes and increased industrial activity, particularly in the U.S., Canada, and Australia [73] Other Important Information - The company achieved a leverage ratio of 2.7 times and reported substantial available liquidity of $198.5 million [34] - Operating cash flow for the first nine months of 2025 improved by $65.3 million compared to the prior year, representing a 60.2% conversion of consolidated adjusted EBITDA [33] Q&A Session Summary Question: What drove the strong growth in the APNR business? - The growth was largely attributed to excellent cross-selling following emergency responses, with both structural and one-time sales contributing to the performance [36][39] Question: Can you elaborate on the water treatment business's positive outlook? - The water treatment business is experiencing healthy organic growth and margin accretion, driven by advanced technology applicable across multiple contaminants, not just PFAS [41][45] Question: What is the impact of the wind-down of the renewable services business? - The wind-down is expected to significantly reduce revenue, but excluding this impact, segment margins would be up year-to-date [51][55] Question: How will the acquisition strategy evolve moving forward? - The company plans to focus on larger assets with strong cash flow generation and is evaluating opportunities in international markets [62][63]