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Waste Management (WM)
NYSE:WM
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Waste Management
(NYSE:WM)
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Rating:76Outperform
Price Target:
$245.00
▲(13.33% Upside)
Waste Management's strong financial performance and positive earnings call outlook are the most significant factors driving the stock score. While technical indicators show mixed signals, the company's high valuation tempers the overall score. The absence of notable corporate events keeps the focus on financial and operational strengths.
Positive Factors
Strong Operating EBITDA Growth
The significant growth in operating EBITDA and free cash flow indicates robust operational performance and financial health, supporting long-term growth initiatives.
Collection and Disposal Business Performance
The growth in MSW and special waste volumes highlights Waste Management's strong market position and ability to drive revenue from core operations, ensuring sustainable growth.
Recycling Segment Growth
The recycling segment's EBITDA growth despite price declines shows resilience and adaptability, enhancing long-term sustainability and environmental stewardship.
Negative Factors
High Leverage
High leverage could pose risks if market conditions change, potentially impacting financial flexibility and increasing vulnerability to economic downturns.
Healthcare Solutions Revenue Challenges
Slower revenue growth in Healthcare Solutions may hinder overall growth prospects, requiring strategic adjustments to improve performance in this segment.
Natura PCR Plant Temporary Closure
The temporary closure of the Natura PCR plant indicates potential operational disruptions and regulatory challenges, affecting long-term strategic goals in recycling.
Waste Management (WM) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$88.05B
Dividend Yield1.5%
Average Volume (3M)1.63M
Price to Earnings (P/E)34.1
Beta (1Y)0.13
Revenue Growth15.88%
EPS Growth-3.11%
CountryUS
Employees61,700
SectorIndustrials
Sector Strength72
IndustryWaste Management
Share Statistics
EPS (TTM)1.98
Shares Outstanding402,867,070
10 Day Avg. Volume1,315,374
30 Day Avg. Volume1,629,251
Financial Highlights & Ratios
PEG Ratio1.46
Price to Book (P/B)9.82
Price to Sales (P/S)3.67
P/FCF Ratio37.53
Enterprise Value/Market Cap1.28
Enterprise Value/Revenue4.54
Enterprise Value/Gross Profit15.68
Enterprise Value/Ebitda16.22
Forecast
1Y Price Target
$247.61Price Target Upside14.54% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering20
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
Waste Management Business Overview & Revenue Model
Company DescriptionWaste 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 MoneyWaste Management generates revenue primarily through its core services, which include waste collection, disposal fees, and recycling operations. The collection segment involves charging customers for regularly scheduled pickups of trash and recyclables, while the disposal segment earns revenue from tipping fees charged to customers who deposit waste at landfills. Recycling operations also provide income through the sale of recovered materials. Additionally, WM benefits from long-term contracts with municipalities and commercial customers, which ensure consistent cash flow. The company further enhances its earnings through partnerships with local governments and businesses to provide customized waste management solutions. Factors contributing to its financial performance include increasing demand for sustainable waste disposal methods, regulatory support for recycling initiatives, and the ongoing trend towards environmental responsibility among consumers and corporations.
Waste Management Key Performance Indicators (KPIs)
Any
Collection Revenue by Type
Analyzes revenue from different waste collection services, highlighting the company's strengths in various waste management solutions and potential areas for growth or increased competition.
Analyzes revenue from different waste collection services, highlighting the company's strengths in various waste management solutions and potential areas for growth or increased competition.
Data provided by:
The Fly
The FlyWaste Management Earnings Call Summary
Earnings Call Date:Jul 28, 2025
(Q2-2025)
| % Change Since: |
Next Earnings Date:Jan 28, 2026
Earnings Call Sentiment Positive
The earnings call reflected a generally positive sentiment with strong EBITDA growth, successful integration of acquisitions, and increased free cash flow guidance. However, challenges such as declining recycled commodity prices and the loss of a franchise contract impacted revenue expectations.Q2-2025 Updates
Positive Updates
Strong Operating EBITDA Growth
The company reported a 19% growth in operating EBITDA for the second quarter, with significant contributions from the collection and disposal business.
Landfill Volume Growth
Landfill volumes were particularly strong, contributing to the overall solid waste volume growth in key markets.
Sustainability Platform Success
Recycling segment operating EBITDA grew by 17% despite a 15% decline in recycled commodity prices, showcasing the strength of sustainability investments.
Healthcare Solutions Synergy
The integration of WM Healthcare Solutions is on track to achieve the upper end of targeted synergies of $80 million to $100 million in 2025.
Margin Expansion
The collection and disposal operating EBITDA improved by 60 basis points to 37.9%, driven by strong landfill volumes and pricing discipline.
Free Cash Flow Guidance Increase
The company has increased its expectations for 2025 free cash flow to between $2.8 billion and $2.9 billion.
Renewable Energy Projects
Three new projects commenced operations during the quarter, including a renewable natural gas facility in Illinois.
Negative Updates
Recycled Commodity Price Decline
Recycled commodity prices declined by nearly 15% compared to last year, impacting revenue expectations.
Volume Impact from Franchise Contract Loss
The loss of a large franchise contract negatively affected residential and commercial volumes.
Revenue Guidance Reduction
Revenue for the year is expected to be about 1% below initial expectations due to factors such as recycled commodity prices and harsh winter weather.
Alternative Fuel Tax Credit Impact
The expiration of alternative fuel tax credits had a negative 30 basis point impact on margins for the quarter.
Company Guidance
During the WM Second Quarter 2025 Earnings Conference Call, the company reported a 19% year-over-year increase in operating EBITDA, driven primarily by its collection and disposal business, which contributed over half of this growth. The landfill volumes were particularly strong, with MSW volume growth highlighted, alongside special waste volumes due to wildfire cleanup efforts in California. The company emphasized its ongoing acquisition strategy, having completed the acquisition of a regional solid waste player in Washington, D.C., and expects total acquisition spending to exceed $500 million for the year. WM's sustainability platform continued to support its investment thesis, with the recycling segment's operating EBITDA growing by 17% despite a 15% decrease in recycled commodity prices. The company is on track to achieve the upper end of its targeted $80 million to $100 million synergies in 2025 for its WM Healthcare Solutions segment. Finally, WM confirmed its 2025 guidance with a midpoint operating EBITDA of $7.55 billion and revised its free cash flow expectations to between $2.8 billion and $2.9 billion.Waste Management Financial Statement Overview
Summary
Waste Management demonstrates solid financial health with consistent revenue growth and strong profitability metrics. The company effectively manages its debt levels, although high leverage remains a potential risk. Cash flow generation is robust, supporting ongoing operations and growth initiatives.Income Statement
Waste Management has demonstrated consistent revenue growth, with a TTM revenue growth rate of 3.48% and a strong gross profit margin of 28.97%. The net profit margin is healthy at 11.36%, indicating efficient cost management. However, the slight decline in EBIT margin from 18.38% in 2024 to 17.57% in TTM suggests some pressure on operational efficiency.Balance Sheet
The company maintains a stable financial position with a debt-to-equity ratio of 2.61, showing a slight improvement from 3.02 in 2024. Return on equity remains robust at 31.93%, reflecting strong profitability. However, the high leverage indicates potential risk if market conditions change unfavorably.Cash Flow
Operating cash flow is strong, with a TTM operating cash flow to net income ratio of 0.97, indicating good cash generation relative to earnings. Free cash flow growth is positive at 11.05%, showing improvement from previous periods. However, the free cash flow to net income ratio of 0.38 suggests room for improvement in cash flow efficiency.| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 24.78B | 22.06B | 20.43B | 19.70B | 17.93B | 15.22B |
| Gross Profit | 7.17B | 6.41B | 5.75B | 5.37B | 4.82B | 4.21B |
| EBITDA | 6.93B | 6.46B | 5.72B | 5.45B | 4.82B | 4.09B |
| Net Income | 2.56B | 2.75B | 2.30B | 2.24B | 1.82B | 1.50B |
Balance Sheet | ||||||
| Total Assets | 45.61B | 44.57B | 32.82B | 31.37B | 29.10B | 29.34B |
| Cash, Cash Equivalents and Short-Term Investments | 175.00M | 414.00M | 458.00M | 351.00M | 118.00M | 553.00M |
| Total Debt | 23.36B | 23.90B | 16.23B | 14.98B | 13.40B | 13.81B |
| Total Liabilities | 36.09B | 36.31B | 25.93B | 24.50B | 21.97B | 21.89B |
| Stockholders Equity | 9.52B | 8.25B | 6.90B | 6.85B | 7.12B | 7.45B |
Cash Flow | ||||||
| Free Cash Flow | 2.40B | 2.16B | 1.82B | 1.95B | 2.43B | 1.77B |
| Operating Cash Flow | 5.86B | 5.39B | 4.72B | 4.54B | 4.34B | 3.40B |
| Investing Cash Flow | -10.46B | -10.60B | -3.09B | -3.06B | -1.89B | -4.85B |
| Financing Cash Flow | 4.23B | 5.16B | -1.52B | -1.22B | -2.90B | -1.56B |
Waste Management Technical Analysis
Negative
216.18
Price Trends
212.96
Positive
214.95
Positive
221.78
Negative
Market Momentum
1.05
Positive
47.55
Neutral
45.47
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For WM, the sentiment is Negative. The current price of 216.18 is below the 20-day moving average (MA) of 219.23, above the 50-day MA of 212.96, and below the 200-day MA of 221.78, indicating a neutral trend. The MACD of 1.05 indicates Positive momentum. The RSI at 47.55 is Neutral, neither overbought nor oversold. The STOCH value of 45.47 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for WM.
Waste Management Risk Analysis
Waste Management disclosed 38 risk factors in its most recent earnings report. Waste Management reported the most risks in the "Legal & Regulatory" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Waste Management Peers Comparison
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $13.66B | 35.25 | 14.64% | ― | 2.85% | -6.27% | |
76 Outperform | $88.05B | 34.07 | 29.31% | 1.50% | 15.88% | -3.11% | |
72 Outperform | $65.27B | 31.16 | 18.24% | 1.11% | 4.33% | 7.59% | |
69 Neutral | $915.60M | -27.54 | -4.17% | ― | 22.77% | 44.73% | |
69 Neutral | $6.35B | 417.17 | 0.98% | ― | 20.54% | 106.35% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
56 Neutral | $1.49B | -8.95 | -38.53% | ― | -2.91% | -67.18% |
* Industrials Sector Average
WM
Waste Management
216.18
11.23
5.48%
CWST
Casella Waste
100.08
-12.03
-10.73%
CLH
Clean Harbors
254.08
17.08
7.21%
NVRI
Enviri
18.54
9.87
113.84%
RSG
Republic Services
209.65
2.07
1.00%
MEG
Montrose Environmental Group
25.99
3.37
14.90%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.