Waste Management, Inc. (WM)
Valuation Overview•Is Waste Management, Inc. Overvalued or Undervalued?
Market price has outpaced base-case intrinsic cash flows, pricing in significant future growth optimism.
Moderate quality score of 59/100, reflecting stable operating margins and manageable leverage.
Analysts remain bullish, forecasting further upside expansion with consensus targets suggesting solid gains.
Verdict: Average quality business weighed down by significant solvency concerns.
Wall Street is highly bullish, projecting significant upside alongside robust expected earnings growth. However, capital return yields remain modest, anchored by a strong, well-covered dividend yield.
WM demonstrates strong business quality with robust profitability and healthy margins. However, the balance sheet carries elevated leverage, requiring careful monitoring of debt servicing capabilities.
The company demonstrates solid revenue growth (8.6% 3Y CAGR) paired with stable bottom-line earnings. The company maintains healthy operational efficiency with a 18.5% operating margin.
| Financial Metric | Trend (12Q) | Latest Qtr | 1Y Growth | 3Y CAGR | 5Y CAGR | 10Y CAGR |
|---|---|---|---|---|---|---|
| Revenue | $6.2B | +14.2% | +8.6% | +10.6% | +6.9% | |
| EBITDA | $1.8B | — | +10.2% | — | — | |
| Net Income | $723.0M | -1.4% | +6.6% | — | +13.7% | |
| EPS (Diluted) | $1.79 | -1.6% | +7.5% | +13.7% | +15.0% | |
| Free Cash Flow | $851.0M | +30.4% | +13.1% | +9.7% | — |
| Metric | TTM | 3Y Avg | 5Y Avg | 10Y Avg |
|---|---|---|---|---|
| Gross Margin | 32.1% | 28.8% | 28.1% | 28.1% |
| Operating Margin | 18.5% | 18.6% | 18.0% | 17.8% |
| Net Margin | 11.0% | 11.5% | 11.2% | 11.2% |
| FCF Margin | 12.9% | 10.0% | 10.7% | 11.4% |
| Quarter | EPS Est. | EPS Act. | Surprise | EPS | Rev |
|---|---|---|---|---|---|
| Q2'26Latest | $1.75 | $1.81 | +3.4% | ||
| Q1'26 | $1.95 | $1.93 | -1.0% | ||
| Q4'25 | $2.01 | $1.98 | -1.5% | ||
| Q3'25 | $1.89 | $1.92 | +1.6% | ||
| Q2'25 | $1.59 | $1.67 | +5.0% | ||
| Q1'25 | $1.80 | $1.70 | -5.6% | ||
| Q4'24 | $1.89 | $1.96 | +3.7% | ||
| Q3'24 | $1.83 | $1.82 | -0.5% |
Total return is -6.5% (1Y), lagging the benchmark by -31.5%
| Period | Total Return | vs S&P 500 (Alpha) | Dividend Contribution |
|---|---|---|---|
| YTD | -0.9% | -10.2% | — |
| 1Y | -6.5% | -31.5% | +1.5% |
| 3YCAGR | +10.8% | -8.5% | +5.8% |
| 5YCAGR | +10.8% | -1.9% | +10.8% |
| 10YCAGR | +14.3% | +0.7% | — |
The S&P 500 is at 31.3x trailing P/E — Expensive relative to historical averages.
Quick answers to common questions about Waste Management, Inc. (WM) valuation, health, and returns.
Waste Management, Inc. is estimated to be overvalued under our discounted cash flow framework. relative multiples indicate the stock is Fair versus peers compared to industry peers. overvalued (implying -30.4% downside from DCF intrinsic value of $149.38)
Waste Management, Inc. has multiple valuation anchors: DCF Intrinsic Value: $149.38 | Peer Relative Fair Value: $222.29 | Wall Street Analyst Target: $258.50 (implying +20.5% upside). A convergence of these signals offers higher conviction.
Waste Management, Inc. displays fair financial health with a composite quality score of 59/100, supported by a Altman Z-Score of 1.5 (distress zone), Piotroski F-Score of 7/9, Return on Invested Capital (ROIC) of 10.7%.
Waste Management, Inc. pays a 1.5% dividend yield, covered by a 49% payout ratio with 22 years of growth, supplemented by a 0.0% buyback yield.
Waste Management, Inc.'s current growth trajectory is Accelerating. The company achieved +14.2% 1Y revenue growth and -1.6% 1Y EPS growth, compared to its 3Y revenue CAGR of +8.6%.
Wall Street consensus is Buy based on 35 analysts, beating EPS expectations in 58% of recent quarters with a 1-quarter streak. The consensus price target represents a +20.5% change from current levels.
Investment risks for Waste Management, Inc. include: -17.0% 1-year max drawdown, elevated distress risk. Volatility risk is characterized by a beta of -0.24x.
No. These computations are purely quantitative model outputs for informational purposes. They do not account for qualitative management shifts or macro events. Always consult a licensed RIA before buying or selling shares.
Disclaimer: This page is for informational purposes only and does not constitute financial advice. All valuation models, scores, and target estimates are automated computations under stated assumptions and should not be relied upon as the sole basis for any investment decision.