Waste Management (WM) AI Stock Analysis

• Market Cap: $93.92B
• Dividend Yield: 1.32%
• Average Volume (3M): 1.91M
• Price to Earnings (P/E): 35.2
• Beta (1Y): 0.28
• Revenue Growth: 10.77%
• EPS Growth: 8.38%
• Country: US
• Employees: 61,700
• Sector: Industrials
• Sector Strength: 78
• Industry: Waste Management
• EPS (TTM): 6.63
• Shares Outstanding: 402,408,000
• 10 Day Avg. Volume: 1,882,987
• 30 Day Avg. Volume: 1,909,880
• PEG Ratio: 4.20
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.00
• Price to Cash Flow (P/CF): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: 1.25
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: 13.49
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $251.47
• Price Target Upside: 7.49% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 18

Waste Management's strong financial performance and positive earnings call sentiment drive a favorable score. The company's robust cash flow and operational efficiencies are significant strengths. However, high leverage and a relatively high P/E ratio present challenges. Technical indicators suggest a moderate bullish trend, though valuation concerns could limit further stock price appreciation.

Positive Factors

Business Improvement

There is faith in WM's ability to dramatically improve the business with significant upside potential to the $250MM synergy target.

Guidance Achievability

The company is well positioned to achieve the midpoint if not the high-end of their 2025 EBITDA guidance driven from favorable price/cost spread, volume improvement, SRCL value capture, and sustainability investments.

M&A Prospects

Increased optimism for near-term M&A activity with a well-developed acquisition pipeline.

Negative Factors

Commodity Challenges

The SID division was challenged by reduced commodity values and less event-driven work.

Revenue Performance

Revenues were light and free cash flow was significantly below expectations.

Startup Costs

Startup costs on new RNG projects were a drag on margins.

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

Waste Management, Inc. generates revenue primarily through its various waste management services. The company's key revenue streams include collection services, where it charges fees for picking up waste from residential, commercial, and industrial clients. Additionally, WM earns from its landfill operations by charging tipping fees for waste disposal at its sites. Recycling services provide another revenue stream, where WM processes recyclable materials and sells them to manufacturers. The company also invests in renewable energy projects, such as landfill gas-to-energy initiatives, which contribute to its earnings. Strategic partnerships with municipalities and businesses, along with long-term contracts, play a significant role in ensuring stable revenue streams for Waste Management.

Waste Management Financial Statement Overview

Summary

Waste Management demonstrates consistent revenue and profit growth, supported by strong operational performance and efficient cost management. While the balance sheet shows a robust equity position, high leverage poses potential risks. Strong cash flow generation enhances the company's financial flexibility.

Income Statement

Waste Management has showcased strong revenue growth over the years, with a notable increase from $15.22 billion in 2020 to $22.06 billion in 2024. The gross profit margin remains healthy, with the latest figures indicating efficiency in cost management. Net profit margin has improved considerably, reflecting enhanced profitability. EBIT and EBITDA margins also show robust operational performance, indicating a well-managed cost structure and efficient operations.

Balance Sheet

The company's balance sheet reflects a solid equity base with stockholders' equity increasing over time. However, the debt-to-equity ratio is high, indicating potential leverage risks. Return on equity has been strong, illustrating efficient use of shareholder funds. The company's equity ratio has improved, suggesting a stronger financial position, although the absence of total asset figures for 2024 limits the full analysis.

Cash Flow

Operating cash flow has steadily increased, supporting the company's liquidity and operational efficiency. Free cash flow growth has been consistent, indicating positive cash generation beyond capital expenditures. The operating cash flow to net income ratio highlights robust cash earnings quality, while the free cash flow to net income ratio emphasizes strong conversion of profits into cash.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
22.06B	20.43B	19.70B	17.93B	15.22B
	Gross Profit
8.68B	7.82B	7.40B	6.82B	5.88B
	EBIT
4.06B	3.58B	3.37B	2.96B	2.43B
	EBITDA
6.42B	5.59B	5.47B	4.96B	4.15B
	Net Income Common Stockholders
2.75B	2.30B	2.24B	1.82B	1.50B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
414.00M	458.00M	351.00M	118.00M	553.00M
	Total Assets
44.57B	32.82B	31.37B	29.10B	29.34B
	Total Debt
23.90B	16.23B	14.98B	13.40B	13.81B
	Net Debt
23.49B	15.77B	14.63B	13.29B	13.26B
	Total Liabilities
36.31B	25.93B	24.50B	21.97B	21.89B
	Stockholders Equity
8.25B	6.90B	6.85B	7.12B	7.45B
Cash Flow		Free Cash Flow
2.16B	1.82B	1.95B	2.43B	1.77B
	Operating Cash Flow
5.39B	4.72B	4.54B	4.34B	3.40B
	Investing Cash Flow
-10.60B	-3.09B	-3.06B	-1.89B	-4.85B
	Financing Cash Flow
5.16B	-1.52B	-1.22B	-2.90B	-1.56B

Waste Management Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 233.94
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

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 233.94 is above the 20-day moving average (MA) of 228.36, above the 50-day MA of 228.32, and above the 200-day MA of 215.47, indicating a bullish trend. The MACD of 1.32 indicates Negative momentum. The RSI at 58.99 is Neutral, neither overbought nor oversold. The STOCH value of 91.39 is Negative, 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
WM	79 Outperform	$93.92B	35.20	34.01%	1.32%	10.77%	8.38%
CLH	78 Outperform	$11.90B	30.77	16.02%	―	8.52%	4.51%
RSG	76 Outperform	$78.29B	37.77	18.54%	0.91%	6.13%	16.44%
CWST	75 Outperform	$7.41B	520.74	1.05%	―	23.15%	-50.55%
Sector *	64 Neutral	$4.28B	11.80	5.30%	250.74%	4.12%	-9.02%

Waste Management Corporate Events

Waste Management Grants Executive Incentive Awards for 2025

On February 25, 2025, Waste Management, Inc. granted annual incentive awards to its executive officers, including performance share units (PSUs) and stock options under the 2023 Stock Incentive Plan. The PSUs are linked to cash flow generation and total shareholder return relative to the S&P 500, with payouts ranging from 0 to 200% of the target amount. Stock options have a 10-year term and vest over three years. Additionally, annual cash incentive awards were granted, based on performance measures like operating EBITDA and internal revenue growth, with potential adjustments for sustainability scores and individual performance. These incentives aim to align executive compensation with company performance and shareholder value, impacting the company’s operational focus and stakeholder interests.