Here's Why Casella Waste Systems (CWST) Declined in Q3

TimesSquare Capital Management, an equity investment management company, released its “U.S. Small Cap Growth Strategy” third-quarter 2025 investor letter. A copy of the letter can be downloaded here. During the quarter, the fund returned 2.26% (gross) and 2.01% (net), compared to the Russell 2000 Growth Index’s 12.19% return. During the quarter, all asset classes except fixed income outside the U.S. posted positive returns. In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its third-quarter 2025 investor letter, TimesSquare Capital U.S. Small Cap Growth Strategy highlighted stocks such as Casella Waste Systems, Inc. (NASDAQ:CWST). Casella Waste Systems, Inc. (NASDAQ:CWST) is a vertically integrated solid waste services company. The one-month return of Casella Waste Systems, Inc. (NASDAQ:CWST) was 3.62%, and its shares lost 5.03% of their value over the last 52 weeks. On January 5, 2026, Casella Waste Systems, Inc. (NASDAQ:CWST) stock closed at $100.12 per share, with a market capitalization of $6.357 billion.

TimesSquare Capital U.S. Small Cap Growth Strategy stated the following regarding Casella Waste Systems, Inc. (NASDAQ:CWST) in its third quarter 2025 investor letter:

"Many of our Industrials positions provide necessary business-to-business operational services, highly technical components, equipment enabling automation & efficiency improvements, or essential infrastructure services. Casella Waste Systems, Inc. (NASDAQ:CWST) backed up by -18%. The solid waste handler’s revenues were better than expected, but earnings were hampered by the slower-than-expected systems integration of newly acquired territories in Mid-Atlantic states and the implementation of a new enterprise resource planning system. We see both issues as transitory, knowing that Casella in the past quickly improved margins of acquisitions and the ERP system should facilitate that, so we added to our position."

Casella Waste Systems, Inc. (NASDAQ:CWST) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 26 hedge fund portfolios held Casella Waste Systems, Inc. (NASDAQ:CWST) at the end of the third quarter, up from 24 in the previous quarter. In the third quarter of 2025, Casella Waste Systems, Inc. (NASDAQ:CWST) reported revenues of $485.4 million, up $73.7 million or 17.9% year-over-year. While we acknowledge the potential of Casella Waste Systems, Inc. (NASDAQ:CWST) as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

In another article, we covered Casella Waste Systems, Inc. (NASDAQ:CWST) and shared Conestoga Capital Advisors' views on the company. In addition, please check out our hedge fund investor letters Q3 2025 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article is originally published at Insider Monkey.