Waste Management (WM) AI Stock Analysis

• Market Cap: $95.57B
• Dividend Yield: 1.5%
• Average Volume (3M): 2.41M
• Price to Earnings (P/E): 32.7
• Beta (1Y): 0.09
• Revenue Growth: 15.88%
• EPS Growth: -3.11%
• Country: US
• Employees: 61,700
• Sector: Industrials
• Sector Strength: 72
• Industry: Waste Management
• EPS (TTM): 1.93
• Shares Outstanding: 403,335,800
• 10 Day Avg. Volume: 2,680,125
• 30 Day Avg. Volume: 2,405,041
• PEG Ratio: -18.62
• Price to Book (P/B): 8.86
• Price to Sales (P/S): 3.51
• P/FCF Ratio: 31.42
• Enterprise Value/Market Cap: 1.23
• Enterprise Value/Revenue: 4.68
• Enterprise Value/Gross Profit: 16.09
• Enterprise Value/Ebitda: 16.21
• 1Y Price Target: $257.65
• Price Target Upside: 8.73% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 20
• EPS Forecast (FY): 8.2
• Revenue Forecast (FY): $26.47B

• Rating: 73 Outperform
• Price Target: $266.00 ▲(12.26% Upside)
• Action: Reiterated Date: 03/14/26
• Date: Action: Reiterated 03/14/26

The score is driven primarily by strong underlying operating performance and a constructive 2026 outlook (EBITDA, margin expansion, and materially higher free cash flow), supported by an established uptrend in the stock. The main constraints are leverage and weaker FCF conversion historically, plus a relatively expensive valuation (high P/E with a modest yield).

Positive Factors

Recurring, vertically integrated revenue

WM’s core model combines recurring municipal/commercial collection contracts with ownership of disposal assets (landfills/transfer stations). Vertical integration and route density create stickier cash flows, pricing leverage, and predictable tip-fee revenue that support durable earnings and resilience through cycles.

Consistent multi-year revenue and margin profile

Sustained revenue expansion and stable high-20s margins reflect scale economics and disciplined pricing. These durable margin characteristics indicate structural profitability, enabling continued reinvestment in operations and supporting cash generation even if near-term commodity or volume swings occur.

Improving cash generation and capital returns

Rising OCF and FCF, plus 2026 guidance for ~30% FCF growth, indicate strengthening cash conversion capacity. Higher free cash flow funds maintenance and growth capex, sustainability projects, and shareholder returns (dividend increase and $3B repurchase), enhancing long-term financial flexibility.

Negative Factors

Elevated leverage

A relatively debt-heavy capital structure limits financial flexibility and raises interest-cost sensitivity, particularly if rates stay elevated. While management targets a lower leverage band (2.5–3.0x) and is reducing debt, leverage remains a structural constraint on M&A optionality and downside protection.

Weak free-cash-flow conversion historically

FCF substantially below net income historically implies heavier reinvestment, working-capital needs, or other cash uses. Lower conversion reduces the pace of deleveraging and the margin for error in funding capex, sustainability projects, and shareholder returns without raising leverage or cutting investments.

Commodity, RNG and policy exposure

Recycling and RNG profitability depend on volatile commodity and RIN prices plus policy timing. Lower commodity prices and uncertain EPA/RIN rules can materially affect sustainability-related EBITDA and long-term returns on RNG/recycling investments, making cash flow from these initiatives variable.

Waste Management Business Overview & Revenue Model

Company Description

Waste Management, Inc., through its subsidiaries, provides waste management environmental services to residential, commercial, industrial, and municipal customers in North America. It offers collection services, including picking up and transporting waste and recyclable materials from where it was generated to a transfer station, material recovery facility (MRF), or disposal site; and owns, develops, and operates landfill gas-to-energy facilities in the United States, as well as owns and operates transfer stations. As of December 31, 2021, the company owned or operated 255 solid waste landfills; 5 secure hazardous waste landfills; 96 MRFs; and 340 transfer stations. It also provides materials processing and commodities recycling services; recycling brokerage services, such as managing the marketing of recyclable materials for third parties; and other strategic business solutions. In addition, the company offers construction and remediation services; services related with the disposal of fly ash, and residue generated from the combustion of coal and other fuel stocks; in-plant services comprising full-service waste management solutions and consulting services; and specialized disposal services for oil and gas exploration and production operations. The company was formerly known as USA Waste Services, Inc. and changed its name to Waste Management, Inc. in 1998. Waste Management, Inc. was incorporated in 1987 and is headquartered in Houston, Texas.

How the Company Makes Money

WM primarily makes money by charging customers recurring service fees for collecting, transporting, processing, and disposing of waste and recyclables. A major revenue stream comes from collection contracts and subscriptions (e.g., residential route collection, and scheduled commercial/industrial pickup) that typically include charges based on container size, pickup frequency, service type, and local market pricing; these contracts can be supported by municipal franchise agreements and multi-year commercial arrangements. WM also earns revenue from disposal and processing—fees paid to tip waste at its landfills and to move waste through transfer stations—benefiting from its vertically integrated footprint where waste collected by WM (and third parties) is transported and ultimately disposed of in WM-owned facilities. Recycling contributes through fees for processing recyclables and through sales of recovered commodities (e.g., paper, plastics, metals), with results influenced by commodity price movements and contamination/processing costs. Additional earnings can come from renewable energy and environmental programs associated with landfill operations (such as capturing landfill gas for beneficial use) and from other ancillary fees (e.g., special waste handling, rental and service charges, and surcharges tied to fuel or other cost drivers). Significant factors that support WM’s earnings include its scale and route density in collection, ownership of long-lived disposal assets (landfills) that generate tipping-fee revenue, and long-term municipal and commercial customer relationships that provide recurring cash flows.

Waste Management Financial Statement Overview

Summary

Strong multi-year revenue growth and consistently solid margins (gross and EBITDA ~high-20%s) support resilient earnings power, and operating cash flow has grown meaningfully. Offsetting factors are a debt-heavy capital structure (debt-to-equity ~2x+ historically), weaker free-cash-flow conversion versus net income, and a step-down in 2025 net margin versus 2024.

Income Statement

Revenue has expanded steadily from $15.2B (2020) to $25.2B (2025), and profitability remains consistently solid with gross margin ~27–29% and EBITDA margin ~27–29% across the period. Operating profit margin is stable in the mid-to-high teens, supporting resilient earnings power. The key watch-out is that 2025 net margin (10.7%) stepped down versus 2024 (12.4%), and 2025 shows an unusually high reported revenue growth rate, suggesting potential volatility or non-recurring drivers.

Balance Sheet

The balance sheet shows meaningful leverage: debt-to-equity remains elevated (roughly ~1.9x to ~2.9x historically and ~2.3x in 2025), which can limit flexibility in a higher-rate environment. Positively, equity has grown to $10.0B in 2025 from ~$7.5B in 2020 and returns on equity are strong (about ~20% to ~33%), indicating efficient profit generation. Overall, strong profitability is offset by a relatively debt-heavy capital structure.

Cash Flow

Cash generation is healthy and improving: operating cash flow rose from $3.4B (2020) to $6.0B (2025), and free cash flow increased to $2.8B in 2025 with strong growth versus 2024. Operating cash flow generally covers accounting earnings around ~1x (though it dipped below 1x in 2024), pointing to mostly good earnings quality. A recurring weakness is that free cash flow is consistently well below net income (roughly ~0.39–0.56x historically and ~0.47x in 2025), implying heavier reinvestment and/or cash uses that reduce conversion.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	25.20B	22.06B	20.43B	19.70B	17.93B
Gross Profit	7.33B	6.41B	5.75B	5.37B	4.82B
EBITDA	7.20B	6.46B	5.72B	5.45B	4.82B
Net Income	2.71B	2.75B	2.30B	2.24B	1.82B
Balance Sheet
Total Assets	45.84B	44.57B	32.82B	31.37B	29.10B
Cash, Cash Equivalents and Short-Term Investments	201.00M	414.00M	458.00M	351.00M	118.00M
Total Debt	22.91B	23.90B	16.23B	14.98B	13.40B
Total Liabilities	35.84B	36.31B	25.93B	24.50B	21.97B
Stockholders Equity	9.99B	8.25B	6.90B	6.85B	7.12B
Cash Flow
Free Cash Flow	2.82B	2.16B	1.82B	1.95B	2.43B
Operating Cash Flow	6.04B	5.39B	4.72B	4.54B	4.34B
Investing Cash Flow	-3.57B	-10.60B	-3.09B	-3.06B	-1.89B
Financing Cash Flow	-2.67B	5.16B	-1.52B	-1.22B	-2.90B

Waste Management Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 236.96
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For WM, the sentiment is Positive. The current price of 236.96 is above the 20-day moving average (MA) of 236.72, above the 50-day MA of 228.98, and above the 200-day MA of 221.80, indicating a bullish trend. The MACD of 2.87 indicates Positive momentum. The RSI at 53.46 is Neutral, neither overbought nor oversold. The STOCH value of 26.04 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for WM.

Waste Management Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CLH	74 Outperform	$15.31B	31.90	14.47%	―	2.85%	-6.27%
MEG	74 Outperform	$847.34M	-1,034.44	-0.17%	―	22.77%	44.73%
WM	73 Outperform	$95.57B	32.67	28.99%	1.50%	15.88%	-3.11%
RSG	72 Outperform	$69.21B	30.90	18.00%	1.11%	4.33%	7.59%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
CWST	52 Neutral	$5.62B	789.67	0.50%	―	20.54%	106.35%
NVRI	45 Neutral	$1.47B	-8.63	-38.53%	―	-2.91%	-67.18%

Waste Management Corporate Events

Waste Management Awards Bonus Amid CFO Transition Support

Waste Management, Inc. detailed the departure of Executive Vice President and Chief Financial Officer Devina Rankin, who voluntarily resigned from her CFO role effective November 1, 2025, after a 23‑year tenure that included nearly nine years as CFO. She remained as an executive advisor at her prior base salary through March 13, 2026 to support a smooth handover of responsibilities.

On March 13, 2026, the company awarded Rankin a $1 million cash bonus, separate from her 2025 annual incentive payout, in recognition of her leadership in the orderly transition of the CFO role to her successor and her contributions to integrating Waste Management’s Healthcare Solutions business. The payment underscores the company’s emphasis on continuity in financial leadership and strategic execution during a period of organizational transition.

The most recent analyst rating on (WM) stock is a Hold with a $321.00 price target. To see the full list of analyst forecasts on Waste Management stock, see the WM Stock Forecast page.

Waste Management Updates Executive Performance-Based Compensation Programs

On March 3, 2026, Waste Management’s compensation committee granted its senior executives a new package of performance share units and stock options under the 2023 Stock Incentive Plan, tying half of the equity awards to cash flow generation and half to total shareholder return versus the S&P 500 through December 31, 2028. The awards feature detailed vesting and forfeiture provisions tied to termination scenarios, retirement and change in control events, underscoring a focus on long-term performance alignment and retention of top leadership.

The committee also approved 2026 annual cash incentive opportunities for the same executives, with payouts ranging from zero to 200% of target based on operating EBITDA, operating margin and internal revenue growth, subject to a sustainability scorecard adjustment and committee discretion for individual performance. By linking both equity and cash bonuses to financial, growth and sustainability measures, Waste Management is reinforcing performance-based pay structures that could influence capital allocation, operational efficiency and sustainability initiatives over the current performance cycle.

The most recent analyst rating on (WM) stock is a Buy with a $265.00 price target. To see the full list of analyst forecasts on Waste Management stock, see the WM Stock Forecast page.