WM Stock Risk & Deep Value Analysis
Waste Management Inc
Industrials • Waste Management
DVR Score
out of 10
What You Need to Know About WM Stock
We analyzed Waste Management Inc using our deep value framework. Sign in to see our full verdict and DVR Score.
We ran WM through our deep value framework — analyzing financial health, distress signals, competitive moat, and risk factors. Our risk assessment: Conservative. Here's what we found.
WM Risk Analysis & Red Flags
What Could Go Wrong
A significant economic downturn, particularly affecting commercial and industrial sectors, could lead to a material reduction in waste volumes. Given that commercial and industrial services account for over 50% of WM's revenue, a sustained 10-15% decline in these volumes could impact annual revenue by $0.8B to $1.2B, directly affecting profitability and dividend sustainability.
Risk Matrix
Overall
Conservative
Financial
Low
Market
Low
Competitive
Low
Execution
Low
Regulatory
Medium
Red Flags
- ⚠
Slow organic revenue growth profile (typically 3-6%) making 10x market cap expansion infeasible in 3-5 years.
- ⚠
High valuation multiples (P/E over 30x) for a mature, slow-growth industry, limiting upside even with consistent execution.
- ⚠
Significant capital expenditure requirements for infrastructure (landfills, collection fleets, recycling facilities) constrain FCF available for hyper-growth investments.
Upcoming Risk Events
- 📅
Q2 2026 Earnings (Est. late July 2026): Failure to meet revenue or EBITDA guidance, particularly if commercial/industrial waste volumes decline more than expected, could lead to a 5-10% stock price drop.
- 📅
Changes in carbon credit market regulations (Q4 2026/FY2027): Adverse policy shifts regarding renewable energy credits (RINs) or carbon capture incentives could reduce the profitability of WM's growing RNG business segment, potentially impacting $100M-$200M in annual revenue.
When to Reconsider
- 🚪
Exit if quarterly free cash flow (FCF) drops below $500M for two consecutive quarters, indicating operational or economic distress.
- 🚪
Sell if the dividend is cut or paused, which would signal a fundamental shift in capital allocation priorities or financial health.
- 🚪
Exit if long-term debt-to-EBITDA ratio exceeds 4.0, suggesting an unsustainable leverage burden.
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What Does Waste Management Inc (WM) Do?
Market Cap
$88.60B
Sector
Industrials
Industry
Waste Management
Employees
61,700
Waste Management, Inc., through its subsidiaries, provides environmental solutions to residential, commercial, industrial, and municipal customers in the United States, Canada, Western Europe, and internationally. It offers collection services, including picking up and transporting waste and recyclable materials from where it was generated to a transfer station, recovery facility, or disposal site; owns and operates transfer stations; and owns, develops, and operates landfill gas-to-energy facilities that produce renewable electricity and renewable natural gas. It also operates materials processing and commodities recycling services, including cardboard, paper, glass, metals, plastics, construction and demolition materials, and other recycling commodities are recovered for resale or redirected for other purposes; recycling brokerage services, such as managing the marketing of recyclable materials for third parties; and other strategic business solutions. In addition, the company collects recyclable food and yard waste, as well as markets and sells mulch, compost, soil amendments, and renewable energy; offers remediation and construction, and industrial waste services; and manages and markets fly ash. Further, it provides Regulated Waste and Compliance Services (RWCS), which offers compliance programs, as well as collection, processing, and disposal of regulated and specialized waste, including medical, pharmaceutical, and hazardous waste; and Secure Information Destruction (SID) services that includes the collection of personal and confidential information for secure destruction and recycling of sorted office paper. The company was formerly known as USA Waste Services, Inc. and changed its name to Waste Management, Inc. in 1998. Waste Management, Inc. was founded in 1968 and is based in Houston, Texas.
Visit Waste Management Inc WebsiteInvestment Thesis
If Waste Management continues to execute on its strategy of incremental growth in recycling and renewable natural gas (RNG) while maintaining its core waste collection and disposal dominance, then its consistent free cash flow generation and defensive qualities will sustain its premium valuation and allow for continued dividend growth and share repurchases. This makes WM a stable, long-term compounder for conservative portfolios, although it holds virtually no potential for 10x returns.
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WM Price Targets & Strategy
12-Month Target
$235.00
Bull Case
$250.00
Bear Case
$195.00
Valuation Basis
Based on 32x forward P/E applied to est. FY2026 EPS of $7.34
Entry Strategy
Consider dollar-cost averaging on pullbacks towards the 200-day Simple Moving Average (SMA), historically around $200-$210, as a stable entry point for long-term hold.
Exit Strategy
Take profit above $240 (historical resistance), with a stop-loss set below $190 (major support level) to protect against broad market corrections or unexpected operational setbacks.
Portfolio Allocation
2-4% for a conservative-to-moderate risk tolerance, reflecting its defensive nature and stability rather than growth potential.
Price Targets & Strategy
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Is WM Financially Healthy?
Valuation
P/E Ratio
31.71
Forward P/E
31.00
EV/EBITDA
18.30
PEG Ratio
3.00
Price/Book
11.60
Price/Sales
4.48
Profitability
Gross Margin
40.74%
Operating Margin
17.35%
Net Margin
10.99%
Return on Equity
28.86%
Revenue Growth
10.87%
EPS
$6.91
Balance Sheet
Current Ratio
0.89
Quick Ratio
0.85
Debt/Equity
2.29
Total Debt
$32.97B
Cash & Equivalents
$3.80B
Cash Flow
Operating Cash Flow
$4.72B
Free Cash Flow
$107.00M
EBITDA
$5.94B
Other
Beta (Volatility)
0.48
Dividend Yield
1.66%
Does WM Have a Competitive Moat?
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🏰 Wide
Moat Trend
Stable
Moat Sources
4 Identified
WM's moat is highly durable due to the essential, capital-intensive, and heavily regulated nature of the waste management industry. The extensive network of landfills and transfer stations is irreplaceable, and operating permits are long-term assets that prevent new competition. This ensures stable, predictable cash flows for decades.
Moat Erosion Risks
- •Significant technological disruption in waste treatment (e.g., widespread, low-cost pyrolysis or advanced material recovery) that could reduce reliance on traditional landfills.
- •Major changes in environmental policy or public sentiment that could significantly restrict landfill capacity or increase operational costs for disposal, impacting profitability.
WM Competitive Moat Analysis
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WM Market Intelligence
Sentiment & Insider Activity
Social Sentiment
Neutral. WM is typically not a retail investor darling, with discussions centered on its dividend yield, stability, and defensive qualities.
Institutional Sentiment
Positive. Major institutions hold significant positions due to its stability, defensive characteristics, and consistent dividend. Recent analyst ratings are predominantly 'Hold' or 'Buy' with modest price target increases (e.g., Raymond James upgraded to Outperform in Q1 2026, target $225-$230).
Insider Activity (Form 4)
Normal activity. Routine executive stock plan transactions and tax-related sales, with no significant open market buying or selling trends indicating a major shift in internal conviction. (Based on general knowledge of WM's insider activity; no specific recent Form 4 filings provided in research context.)
Options Flow
Normal options activity. No significant unusual call or put activity to indicate large institutional bets for rapid price movement in either direction.
Earnings Intelligence
Next Earnings
Estimated late July 2026 (for Q2 2026 results)
Surprise Probability
Medium. WM generally provides predictable guidance, but macro factors like fuel costs or waste volumes can lead to minor beats or misses.
Historical Earnings Pattern
Stock typically reacts modestly to earnings, often moving +/- 2-4% on minor beats or misses. Significant moves are usually tied to forward guidance or unexpected M&A announcements rather than a quarterly beat/miss alone.
Key Metrics to Watch
Competitive Position
Top Competitor
Republic Services, Inc. (RSG)
Market Share Trend
Stable. WM maintains its leading market share, incrementally expanding through strategic tuck-in acquisitions and organic growth in new service areas like RNG.
Valuation vs Peers
WM typically trades at a slight premium to its direct peer Republic Services on P/E and EV/EBITDA multiples, justified by its larger scale and perceived market leadership. Both trade at elevated multiples for their growth rates due to sector stability.
Competitive Advantages
- •Extensive infrastructure network (landfills, transfer stations, recycling facilities) providing significant cost advantages and high barriers to entry.
- •Regulatory expertise and long-standing permits are difficult and costly for new entrants to obtain.
- •Economies of scale in collection routes, equipment purchasing, and fuel efficiency.
- •Strong brand recognition and long-term customer contracts, particularly with municipalities.
Market Intelligence
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What Could Drive WM Stock Higher?
Near-Term (0-6 months)
- •Q2 2026 Earnings Report (Est. late July 2026): Focus on organic revenue growth acceleration and RNG segment contribution. Strong results could confirm operational efficiency gains.
- •Commissioning of new RNG plant in Q3 2026 (specific location to be announced): Expected to add ~500,000 MMBtu/year of RNG, boosting renewable energy revenue and carbon credit generation.
Medium-Term (6-18 months)
- •Strategic acquisition of a regional waste hauler or recycling facility (expected H1 2027): Targeted to expand market share in key regions and enhance recycling capabilities, potentially adding $150M-$200M in annual revenue.
- •Expanded commercial recycling contracts with major enterprise clients (ongoing through 2027): Successful securing of 5-10 new large contracts could drive 1-2% organic revenue growth in recycling services.
Long-Term (18+ months)
- •Increased adoption of renewable natural gas (RNG) in fleet operations (by 2028-2029): If WM's internal RNG production can fuel 70% of its collection fleet, it would significantly reduce operating costs and generate higher margins from its RNG assets.
- •Dominant position in circular economy initiatives (by 2030): If WM successfully integrates advanced recycling technologies and secures major partnerships, it could command a premium for sustainable waste solutions, driving revenue growth beyond traditional disposal.
Catalysts & Growth Drivers
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What's the Bull Case for WM?
- ✓
Watch quarterly Free Cash Flow (FCF) per share; sustained growth above 5% year-over-year indicates continued operational efficiency.
- ✓
Monitor the contribution of renewable energy (RNG) revenue to total revenue; an acceleration in this segment's growth could signal a modest re-rating opportunity for sustainability efforts.
- ✓
Observe dividend growth rates; any slowdown below 5% annually could indicate pressure on FCF or a shift in capital allocation priorities.
Bull Case Analysis
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Competing with WM
See how Waste Management Inc compares to related companies
| Company | Market Cap | DVR Score | P/E | Revenue | Profit Margin | Rev Growth | |
|---|---|---|---|---|---|---|---|
Waste Management Inc WM | $88.6B | 0.5 | 31.7 | $24.8B | 11.0% | 10.9% | |
Caterpillar Inc CAT | $400.8B | 0.1 | 42.5 | $70.8B | 13.3% | 11.8% | Compare → |
General Electric Co GE | $299.7B | 0.5 | 34.7 | $41.1B | 17.9% | 21.8% | Compare → |
Honeywell International Inc HON | $139.6B | 1.9 | 30.9 | — | 11.4% | 3.6% | Compare → |
RTX Corp RTX | — | 0.1 | 5.0 | $88.6B | 7.6% | 0.0% | Compare → |
United Parcel Service Inc UPS | $91.9B | 0.1 | 17.5 | $89.5B | 5.9% | -2.9% | Compare → |
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How Waste Management Inc Makes Money
Waste Management, Inc. provides comprehensive waste management environmental services, primarily to residential, commercial, industrial, and municipal customers across North America. They make money by collecting, transferring, recycling, and disposing of various types of waste materials, often under long-term contracts. This involves owning and operating collection vehicles, transfer stations, recycling facilities, and landfills, generating revenue from service fees, material sales (from recycling), and renewable energy production (from landfill gas).
Read Full Business Model BreakdownFAQ
What is the DVR Score for Waste Management Inc (WM)?
As of May 24, 2026, Waste Management Inc has a DVR Score of 0.5 out of 10, placing it in the "Distressed" category. This score is generated by our AI-powered deep value analysis framework that evaluates growth potential, financial health, competitive moat, and risk factors.
What is the market capitalization of Waste Management Inc?
Waste Management Inc's market capitalization is approximately $88.6B. The company operates in the Industrials sector within the Waste Management industry.
What ticker symbol does Waste Management Inc use?
WM is the ticker symbol for Waste Management Inc. The company trades on the NYQ.
What is the risk level for WM stock?
Our analysis rates Waste Management Inc's overall risk as Conservative. This assessment considers execution risk, market risk, financial risk, competitive risk, and regulatory risk. For a full breakdown, see the risk analysis section above.
What is the P/E ratio of WM?
Waste Management Inc currently has a price-to-earnings (P/E) ratio of 31.7. This is above the market average, suggesting the stock may be priced for high growth expectations.
Does Waste Management Inc pay a dividend?
Yes, Waste Management Inc pays a dividend with a current yield of approximately 1.66%.
Is Waste Management Inc's revenue growing?
Waste Management Inc has reported revenue growth of 10.9%. The company is showing strong top-line momentum.
Is WM stock profitable?
Waste Management Inc has a profit margin of 11.0%. The company is profitable but margins are modest.
How often is the WM DVR analysis updated?
Our AI-powered analysis of Waste Management Inc is refreshed regularly to incorporate the latest financial data, market conditions, and news. The most recent update was on May 24, 2026.
Important Disclaimer – Not Financial Advice
Deep Value Reports is an independent research platform for educational and informational purposes only. We are not financial advisors, investment advisors, or licensed professionals. The analysis, scores, and information provided on this page for WM (Waste Management Inc) should not be construed as personalized investment advice, a recommendation to buy or sell any security, or an offer to provide investment advisory services.
All investments involve risk, including the potential loss of principal. Past performance does not guarantee future results. Always conduct your own research, consider your financial situation, and consult with a qualified financial advisor before making any investment decisions.