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Waste Management, Inc. (WM)
Intrinsic Value (DCF)
Current$219.86
→
Intrinsic$64.05
-71%
$23.82$64.05$144.12
Market implies 33% growth for 5 years
Current price reflects execution expectations above 12% growth — not unreasonable for quality businesses.
At $220, the market prices in continued strong cash flow growth (33%) — likely reflecting buybacks, margin stability, and ecosystem strength.
Range: Bear $24 → Bull $144. Current price implies expectations above the base case, closer to bull expectations.
| Discount ↓Growth → | 8% | 10% | 12% | 14% |
|---|---|---|---|---|
| 8% | $93 | $106 | $120 | $136 |
| 10% | $45 | $54 | $64 | $74 |
| 12% | $21 | $27 | $34 | $42 |
| 14% | $5 | $10 | $16 | $22 |
Bull Case
- Bull case ($144) with 14% growth, 8% discount rate
- Conservative 12% growth assumption is achievable based on track record
Bear Case
- Bear case ($24) implies 89% downside at 9% growth, 12% discount
- Price reflects 33% growth expectations vs 12% historical — high bar to clear
- Trading 71% above base case — execution must exceed assumptions to justify
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5-Year Free Cash Flow Projection
Year 1$2.41B
Year 2$2.70B
Year 3$3.01B
Year 4$3.37B
Year 5$3.76B
Terminal$59.59B
📐 Model Inputs
Growth Rate11.7%5Y CAGR (cascade: 5Y→3Y→TTM)
Discount Rate9.5%WACC estimate
Terminal Growth3.0%Perpetuity rate
Base Free Cash Flow$2.16BTTM actual
Bear g×0.8, r+2%
Base Historical CAGR
Bull g×1.2, r−1.5%
DCF estimates based on historical growth rates extrapolated forward. See FAQ below for full methodology.