Earnings results often indicate what direction a company will take in the months ahead. With Q3 behind us, let’s have a look at Driven Brands (NASDAQ: DRVN) and its peers.

Growing regulatory pressure on environmental compliance and increasing corporate ESG commitments should buoy the sector for years to come. On the other hand, environmental regulations continue to evolve, and this may require costly upgrades, volatility in commodity waste and recycling markets, and labor shortages in industrial services. As for digitization, a theme that is impacting nearly every industry, the increasing use of data, analytics, and automation will give rise to improved efficiency of operations. Conversely, though, the benefits of digitization also come with challenges of integrating new technologies into legacy systems.

The 8 industrial & environmental services stocks we track reported a mixed Q3. As a group, revenues beat analysts’ consensus estimates by 1% while next quarter’s revenue guidance was in line.

In light of this news, share prices of the companies have held steady as they are up 2.7% on average since the latest earnings results.

Driven Brands (NASDAQ: DRVN)

With approximately 5,000 locations across 49 U.S. states and 13 other countries, Driven Brands (NASDAQ: DRVN) operates a network of automotive service centers offering maintenance, car washes, paint, collision repair, and glass services across North America.

Driven Brands reported revenues of $484.3 million, down 3.6% year on year. This print fell short of analysts’ expectations by 9.9%, but it was still a strong quarter for the company with a beat of analysts’ EPS estimates and an impressive beat of analysts’ full-year EPS guidance estimates.

“Driven Brands delivered another strong quarter, highlighted by continued growth in our Take 5 business,” said Danny Rivera, President and CEO.

Driven Brands scored the highest full-year guidance raise but had the weakest performance against analyst estimates of the whole group. Unsurprisingly, the stock is up 5.6% since reporting and currently trades at $15.05.

Is now the time to buy Driven Brands? Access our full analysis of the earnings results here, it’s free for active Edge members.

Best Q3: Tetra Tech (NASDAQ: TTEK)

With a 50-year legacy of "Leading with Science" and operations on all seven continents, Tetra Tech (NASDAQ: TTEK) provides high-end consulting and engineering services focused on water management, environmental solutions, and sustainable infrastructure for government and commercial clients worldwide.

Tetra Tech reported revenues of $1.16 billion, up 1.6% year on year, outperforming analysts’ expectations by 10.7%. The business had a strong quarter with a beat of analysts’ EPS and revenue estimates.

Tetra Tech delivered the biggest analyst estimates beat among its peers. The market seems happy with the results as the stock is up 6.7% since reporting. It currently trades at $34.64.

Is now the time to buy Tetra Tech? Access our full analysis of the earnings results here, it’s free for active Edge members.

Weakest Q3: Vestis (NYSE: VSTS)

Operating a network of more than 350 facilities with 3,300 delivery routes serving customers weekly, Vestis (NYSE: VSTS) provides uniform rentals, workplace supplies, and facility services to over 300,000 business locations across the United States and Canada.

Vestis reported revenues of $686.2 million, flat year on year, exceeding analysts’ expectations by 2.1%. Still, it was a softer quarter as it posted a significant miss of analysts’ EPS estimates.

Interestingly, the stock is up 6.2% since the results and currently trades at $7.14.

Read our full analysis of Vestis’s results here.

CECO Environmental (NASDAQ: CECO)

With roots dating back to 1869 and a focus on creating cleaner industrial operations, CECO Environmental (NASDAQ: CECO) provides technology and expertise that helps industrial companies reduce emissions, treat water, and improve energy efficiency across various sectors.

CECO Environmental reported revenues of $197.6 million, up 45.8% year on year. This number surpassed analysts’ expectations by 3.6%. More broadly, it was a satisfactory quarter as it also logged a solid beat of analysts’ revenue estimates but full-year revenue guidance slightly missing analysts’ expectations.

CECO Environmental delivered the fastest revenue growth among its peers. The stock is up 6% since reporting and currently trades at $56.58.

Read our full, actionable report on CECO Environmental here, it’s free for active Edge members.

UniFirst (NYSE: UNF)

With a fleet of trucks making weekly deliveries to over 300,000 customer locations, UniFirst (NYSE: UNF) provides, rents, cleans, and maintains workplace uniforms and protective clothing for businesses across various industries.

UniFirst reported revenues of $614.4 million, down 4% year on year. This print topped analysts’ expectations by 1.1%. However, it was a slower quarter as it produced a significant miss of analysts’ full-year EPS guidance estimates and full-year revenue guidance slightly missing analysts’ expectations.

The stock is up 2% since reporting and currently trades at $176.84.

Read our full, actionable report on UniFirst here, it’s free for active Edge members.

Market Update

In response to the Fed’s rate hikes in 2022 and 2023, inflation has been gradually trending down from its post-pandemic peak, trending closer to the Fed’s 2% target. Despite higher borrowing costs, the economy has avoided flashing recessionary signals. This is the much-desired soft landing that many investors hoped for. The recent rate cuts (0.5% in September and 0.25% in November 2024) have bolstered the stock market, making 2024 a strong year for equities. Donald Trump’s presidential win in November sparked additional market gains, sending indices to record highs in the days following his victory. However, debates continue over possible tariffs and corporate tax adjustments, raising questions about economic stability in 2025.

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