Clean Harbors just announced another solid quarter, beating analyst expectations and raising their EBITDA guidance for 2024. The market, as usual, is focused on the company's core Environmental Services segment and its volatile Safety-Kleen Sustainability Solutions division. But buried within the transcript, hidden in plain sight, is a potential game-changer: PFAS.

PFAS, or per- and polyfluoroalkyl substances, are a group of "forever chemicals" linked to a range of health issues. Regulation around these substances is tightening rapidly, and Clean Harbors is positioning itself as the go-to provider for a total PFAS solution. While analysts are patiently awaiting EPA action, the company is quietly building a significant revenue stream and an even larger pipeline for future growth in this emerging market.

Key Takeaways from the Earnings Call Transcript

Clean Harbors revealed that they generated between $50 million and $70 million in PFAS-related revenue in 2023. This isn't a trivial amount, representing a sizable portion of the company's overall growth. More importantly, the company indicated that their PFAS pipeline is growing at a rapid clip, expanding by 15% to 20% each quarter. This suggests that they are aggressively pursuing opportunities and converting them into actionable projects.

Clean Harbors emphasized their ability to provide a complete PFAS solution, from sampling and analysis to remediation and disposal. This end-to-end approach sets them apart from competitors who may only address one aspect of the PFAS challenge. The company highlighted their ability to commercially destroy PFAS, a key differentiator given the "forever chemical" nature of these substances.

These points suggest that Clean Harbors is aggressively pursuing the PFAS market and may be building a dominant position before the opportunity is fully recognized by the market.

The Numbers Tell the Story

Let's extrapolate some numbers based on the company's comments. If their PFAS pipeline is growing by 15% to 20% each quarter, we can make a conservative estimate: Assuming a 15% quarterly growth rate and a starting pipeline of, say, $100 million at the end of 2023, the pipeline could reach between $200 million and $250 million by the end of 2024. If Clean Harbors converts even a portion of this pipeline into revenue, say 25%, they could generate between $50 million and $60 million in PFAS revenue in 2024 *in addition* to the $50 million to $70 million base they established in 2023.

Projected Growth of Clean Harbors' PFAS Pipeline

The following chart illustrates the potential growth of Clean Harbors' PFAS pipeline based on a conservative 15% quarterly growth rate.

Hypothesis: Clean Harbors is the PFAS Dark Horse

While investors are understandably focused on the more immediate drivers of Clean Harbors' business, the PFAS opportunity is emerging as a significant and underappreciated growth engine. The company's emphasis on providing a complete, scalable solution, coupled with their rapid pipeline expansion, suggests a strategic focus on capturing this market before it reaches full maturity. As regulatory pressure around PFAS inevitably intensifies, Clean Harbors could emerge as the dominant player in this space, driving outsized revenue and profit growth in the coming years.

"Fun Fact: Clean Harbors has a fleet of over 10,000 specialized vehicles, making them one of the largest environmental transportation companies in the world. This extensive logistics network is crucial for their PFAS solution, allowing them to handle the complex collection and transportation of these hazardous materials."