ASX stock Cleanaway Waste Management Ltd (ASX: CWY) is starting to catch investors' attention again.
Shares in the waste management giant rose 3% to $2.385 during Tuesday afternoon trade, extending a recent recovery that has pulled the stock further away from its five-year lows.
While Cleanaway is still down around 8% year to date, lagging the S&P/ASX 200 Index (ASX: XJO), which is up roughly 2.5%, sentiment appears to be shifting.
So, what's driving the interest in this ASX stock today?
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Tighten cost, drive efficiency
The key catalyst is Cleanaway's refreshed strategy, which is giving investors a clearer path to improved profitability. On Tuesday, the ASX stock unveiled its "Blueprint 2030 2.0" plan, focused on margin expansion, stronger cash flow, and more disciplined execution.
Management highlighted that underlying EBIT has already lifted 60% since FY22, suggesting the business has momentum heading into its next phase.
The updated strategy rests on three pillars: lifting customer value, optimising the branch network, and using data and digital tools to boost performance. In practice, that means targeting higher-value revenue, tightening costs, and investing in automation and analytics to drive efficiency.
Sales overhaul
One of the standout initiatives of the ASX stock is a major overhaul of its sales approach. Cleanaway is rolling out a centralised "One Sales Engine" model aimed at improving customer retention and increasing cross-selling opportunities.
At the same time, its ongoing digitisation program is targeting better fleet utilisation, real-time tracking, and enhanced safety outcomes.
There's also a significant push in its hazardous waste division. Cleanaway is streamlining its site network while expanding into higher-margin technical services and decommissioning work. These areas are expected to see strong demand growth in the years ahead.
What next for the ASX stock?
Looking forward, management has set some ambitious targets. The company is targeting at least 260 basis points of margin expansion and 10% to 15% EPS growth in FY27 as cost cuts take hold. It's also pushing to deliver steadier free cash flow through tighter capital allocation and better asset use.
Cleanaway is backing its integrated network and growing use of technology to strengthen its lead in sustainable waste. Especially in higher-value areas like hazardous waste.
Fluctuating fuel cost
Of course, challenges remain. The ASX stock is still navigating a volatile operating environment, including fluctuating fuel costs and broader economic uncertainty. Management is focused on tightening operational efficiency, optimising its fleet, and using procurement strategies to better manage costs.
For investors, the story is shifting from turnaround to execution. Cleanaway's strategy has laid out a clearer roadmap for growth. And if it can deliver, the recent price recovery of the ASX stock may have further to run.
