Waste Management (WM) AI Stock Analysis

5,634 Followers

Top Page

Waste Management

(NYSE:WM)

77Outperform

Waste Management's strong financial performance and strategic focus on sustainability and cost management are key strengths. While technical analysis suggests a neutral outlook and the stock's valuation is high, the positive earnings call and corporate events reinforce confidence. High debt levels and integration challenges warrant cautious monitoring.

Positive Factors

Guidance Achievability

WM remains confident in the '25 guidance due to a strong special waste pipeline and continued wildfire benefit.

M&A Prospects

WM is executing well and the increased visibility and confidence in its near-term M&A prospects are encouraging.

Recycling Automation

Recycling projects remain on track, with automated facilities generating double the margin of legacy facilities and boosting consolidated margins by 20 basis points.

Negative Factors

Commodity Values

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

Revenue and Cash Flow

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 (WM) vs. S&P 500 (SPY)

Market Cap

$92.50B

Dividend Yield1.34%

Average Volume (3M)1.99M

Price to Earnings (P/E)34.7

Beta (1Y)0.26

Revenue Growth10.77%

EPS Growth8.38%

CountryUS

Employees61,700

SectorIndustrials

Sector Strength91

IndustryWaste Management

Share Statistics

EPS (TTM)1.67

Shares Outstanding402,408,000

10 Day Avg. Volume1,859,928

30 Day Avg. Volume1,988,186

Financial Highlights & Ratios

PEG Ratio-13.28

Price to Book (P/B)10.82

Price to Sales (P/S)0.00

P/FCF Ratio50.99

Enterprise Value/Market Cap1.01

Enterprise Value/Revenue1.07

Enterprise Value/Gross Profit11.01

Enterprise Value/Ebitda3.70

Forecast

1Y Price Target

$252.63

Price Target Upside9.90% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering19

Waste Management Business Overview & Revenue Model

Company DescriptionWaste Management, Inc. (WM) is a leading provider of comprehensive waste management and environmental services in North America. The company operates in the sectors of waste collection, transfer, recycling, and disposal services. WM's core offerings include waste collection for residential, commercial, industrial, and municipal customers, as well as landfill operations, recycling services, and renewable energy projects. Headquartered in Houston, Texas, WM is committed to sustainability and innovation in waste management solutions.

How the Company Makes MoneyWaste 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 Key Performance Indicators (KPIs)

Any

Collection Revenue by Type

Collection Revenue by Type
Breaks down revenue from different types of waste collection services, indicating demand trends and the company's ability to capitalize on various waste management needs.

Chart InsightsWaste Management's commercial and residential collection revenues have shown consistent growth, reflecting strong demand and effective pricing strategies. The industrial segment, however, faces temporary softness due to weather impacts, as noted in the earnings call. 'Other Collection' saw a significant spike in late 2023, likely linked to strategic initiatives in sustainability and recycling. The company's focus on sustainability and automation is driving profitability, as evidenced by improved EBITDA margins and successful cost management, positioning WM well for future growth despite some integration challenges in healthcare solutions.

Data provided by:

Main Street Data

Waste Management Financial Statement Overview

Summary

Waste Management exhibits a solid financial profile with strong revenue growth and profitability. The company's balance sheet is stable, though attention to debt levels is advisable. Cash flows remain strong, supporting future growth initiatives. While the company is performing well, maintaining operational efficiency and managing leverage will be key to sustaining this trajectory.

Income Statement

Very Positive

Waste Management has demonstrated a strong performance in its income statement with consistent revenue and profit growth. The TTM revenue shows an impressive increase, indicating robust business momentum. Gross Profit Margin and Net Profit Margin remain healthy, reflecting operational efficiency and profitability. The EBIT and EBITDA margins also indicate strong operational performance. However, slight fluctuations in net income suggest potential volatility in earnings.

Balance Sheet

Positive

The balance sheet reveals a stable financial structure with a reasonable Debt-to-Equity Ratio, indicating a balanced approach to leverage. The Return on Equity is commendable, showcasing effective management of shareholder funds. The Equity Ratio suggests a moderate level of equity financing, which is typical for the industry. Nonetheless, the high level of total debt may pose risks if not managed properly.

Cash Flow

Positive

Cash flow analysis shows a strong operating cash flow, which comfortably covers net income, indicating good cash generation ability. The Free Cash Flow remains positive, supporting potential reinvestment and shareholder returns. However, the decrease in Free Cash Flow in the TTM period compared to the previous year suggests a need for cautious capital expenditure management to maintain cash flow health.

TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
22.92B	22.06B	20.43B	19.70B	17.93B	15.22B
	Gross Profit
8.49B	8.68B	7.82B	7.40B	6.82B	5.88B
	EBIT
4.12B	4.06B	3.58B	3.37B	2.96B	2.43B
	EBITDA
6.60B	6.42B	5.59B	5.47B	4.96B	4.15B
	Net Income Common Stockholders
2.67B	2.75B	2.30B	2.24B	1.82B	1.50B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
216.00M	414.00M	458.00M	351.00M	118.00M	553.00M
	Total Assets
44.49B	44.57B	32.82B	31.37B	29.10B	29.34B
	Total Debt
23.84B	23.90B	16.23B	14.98B	13.40B	13.81B
	Net Debt
23.62B	23.49B	15.77B	14.63B	13.29B	13.26B
	Total Liabilities
35.84B	36.31B	25.93B	24.50B	21.97B	21.89B
	Stockholders Equity
8.65B	8.25B	6.90B	6.85B	7.12B	7.45B
Cash Flow		Free Cash Flow
1.84B	2.16B	1.82B	1.95B	2.43B	1.77B
	Operating Cash Flow
5.23B	5.39B	4.72B	4.54B	4.34B	3.40B
	Investing Cash Flow
-10.68B	-10.60B	-3.09B	-3.06B	-1.89B	-4.85B
	Financing Cash Flow
5.36B	5.16B	-1.52B	-1.22B	-2.90B	-1.56B

Waste Management Technical Analysis

Technical Analysis Sentiment

Positive

Last Price229.87

Price Trends

50DMA

228.46

Positive

100DMA

222.43

Positive

200DMA

216.44

Positive

Market Momentum

MACD

-0.32

Positive

RSI

51.13

Neutral

STOCH

39.88

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 229.87 is below the 20-day moving average (MA) of 229.95, above the 50-day MA of 228.46, and above the 200-day MA of 216.44, indicating a neutral trend. The MACD of -0.32 indicates Positive momentum. The RSI at 51.13 is Neutral, neither overbought nor oversold. The STOCH value of 39.88 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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

Overall Rating

UnderperformOutperform

Sector (64)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CLH	78 Outperform	$12.48B	32.26	16.02%	―	8.52%	4.51%
WM	77 Outperform	$92.50B	34.67	34.01%	1.34%	10.77%	8.38%
RSG	76 Outperform	$77.43B	37.36	18.54%	0.92%	6.13%	16.45%
CWST	68 Neutral	$7.27B	522.21	1.00%	―	21.63%	-30.27%
Sector *	64 Neutral	$4.43B	12.01	5.16%	249.23%	4.03%	-11.73%

* Industrials Sector Average

Performance Comparison

Waste Management

229.87

24.38

11.86%

CWST

Casella Waste

114.52

14.26

14.22%

CLH

Clean Harbors

232.90

18.82

8.79%

RSG

Republic Services

247.79

63.83

34.70%

Waste Management Earnings Call Summary

Earnings Call Date:Apr 28, 2025

(Q1-2025)

% Change Since: 0.34%|

Next Earnings Date:Jul 29, 2025

Earnings Call Sentiment Positive

The earnings call reflected strong operational performance, with significant EBITDA growth and successful integration of sustainability initiatives. However, challenges such as weather impacts and integration hurdles in the healthcare segment were noted. Overall, the positive aspects, particularly in growth and strategic investments, outweigh the negatives.

Q1-2025 Updates

Positive Updates

Strong Operating EBITDA Growth

Total company operating EBITDA grew by more than 12% year-over-year, driven by strong operational performance and contributions from WM Healthcare Solutions.

Sustainability Business Success

Combined operating EBITDA from recycling and renewable energy grew by over 20% year-over-year, with significant contributions from automated recycling facilities.

Improved Residential Line of Business

Operating EBITDA margin for the residential line of business grew by more than 130 basis points, reaching 20% for the first time in six years.

Successful Cost Management

Operating expenses as a percentage of revenue improved to 60.5%, marking the sixth consecutive quarter below 61%.

Increased Acquisition Pipeline

WM expects to close more than $500 million in solid waste acquisitions in 2025, up from the typical $100 million to $200 million range.

Negative Updates

Impact of Winter Weather

The first quarter was affected by tough winter weather in the Southeast and Gulf Coast regions, impacting volume and revenue.

Expiration of Alternative Fuel Tax Credits

A 30 basis point headwind from the expiration of alternative fuel tax credits impacted margins.

Challenges in Healthcare Solutions Integration

While there was progress in integrating WM Healthcare Solutions, challenges remain, particularly with ERP system optimization.

Temporary Softness in Industrial Volumes

The industrial business experienced softness, which was partly weather-related and impacted volumes negatively.

Company Guidance

In the WM First Quarter 2025 Earnings Conference Call, the company reported strong financial performance, with total company operating EBITDA growing over 12% compared to the same period in 2024. This growth was driven by solid performance in the collection and disposal business, significant contributions from WM Healthcare Solutions, and increases in sustainability businesses. The company also highlighted a 20% year-over-year increase in combined operating EBITDA from recycling and renewable energy. In the collection and disposal business, operating EBITDA rose nearly 5%, and margins expanded by 10 basis points. WM's legacy business achieved a 30% margin for the fourth consecutive quarter, supported by a 50 basis point contribution from favorable price-cost spread and a 20 basis point contribution from recycling automation projects. The company remains confident in meeting its full-year financial guidance, including an operating EBITDA target between $7.45 billion and $7.65 billion, and a free cash flow outlook of $2.675 billion to $2.775 billion.

Waste Management Corporate Events

Executive/Board ChangesBusiness Operations and Strategy

Waste Management Promotes John Morris to President

Positive

May 14, 2025

On May 14, 2025, Waste Management, Inc. announced the promotion of John J. Morris, Jr. to the position of President, while he continues as Chief Operating Officer, following the voluntary resignation of James C. Fish, Jr. from the role of President. This leadership change is part of WM’s ‘People First’ strategy, emphasizing leadership development and operational excellence. Morris, with over 30 years in the industry, is expected to advance WM’s strategy and enhance shareholder value, reflecting the company’s commitment to environmental leadership and workforce development.

The most recent analyst rating on (WM) stock is a Hold with a $214.00 price target. To see the full list of analyst forecasts on Waste Management stock, see the WM Stock Forecast page.

Spark’s Take on WM Stock

According to Spark, TipRanks’ AI Analyst, WM is a Outperform.

Waste Management’s stock receives a solid score due to its strong financial performance, highlighted by robust revenue and profitability growth. While technical indicators suggest a neutral trend with possible oversold conditions, the stock’s valuation is high, reflecting market optimism. The recent earnings call reinforced confidence with significant EBITDA growth, despite some challenges. Overall, WM’s strategic focus on sustainability and cost management supports its positive outlook, though high debt levels and integration challenges warrant attention.

To see Spark’s full report on WM stock, click here.

Executive/Board ChangesShareholder Meetings

Waste Management Elects New Board at Annual Meeting

Positive

May 14, 2025

At the Annual Meeting of Stockholders held on May 13, 2025, Waste Management, Inc. announced the election of nine director nominees to its Board of Directors, with all nominees successfully elected. Additionally, stockholders ratified the appointment of Ernst & Young LLP as the independent registered public accounting firm for the fiscal year ending December 31, 2025, and approved the company’s executive compensation plan. These decisions reflect strong shareholder support and are expected to reinforce the company’s governance and financial oversight, potentially impacting its strategic direction and stakeholder confidence.

The most recent analyst rating on (WM) stock is a Hold with a $214.00 price target. To see the full list of analyst forecasts on Waste Management stock, see the WM Stock Forecast page.

Spark’s Take on WM Stock

According to Spark, TipRanks’ AI Analyst, WM is a Outperform.

To see Spark’s full report on WM stock, click here.

Executive/Board ChangesBusiness Operations and Strategy

Waste Management Grants Executive Incentive Awards for 2025

Neutral

Feb 28, 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.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

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.