WM Waste Management, Inc. - Fundamental Analysis
NEUTRAL
WM Stock | Fundamental Analysis & Investment Insights
NYSE
•
Industrials
•
Waste Management
Current Price
$209.17
Analyst Target
$245.71
+17.5% Upside
52W High
$242.58
52W Low
$194.11
AI Analysis
Powered by advanced machine learning algorithms
Confidence Score
72%
Analysis Accuracy
Waste Management (WM) trades at a premium valuation with solid long-term fundamentals, including strong ROE of 29.33% and consistent revenue growth of 14.90% YoY, outpacing the industrial sector average. However, near-term earnings pressure is evident, with YoY EPS down 20.7% and mixed recent earnings surprises, while the stock has underperformed peers over the past year with a -4.3% return. The company maintains a disciplined dividend policy with a sustainable 50.8% payout ratio, but elevated leverage (Debt/Equity: 2.45) and insider selling—$14.39M in sales by officers including the CFO—raise caution. Analysts remain constructive with a $245.71 target implying ~17% upside, though current P/E of 32.89 exceeds both forward P/E and sector averages, suggesting limited near-term multiple expansion.
Key Strengths
Revenue growth of 14.90% YoY significantly exceeds industrial sector average of 7.02%
High return on equity (29.33%) indicates efficient use of shareholder capital
Operating margin of 18.87% reflects pricing power and cost discipline in a capital-intensive industry
Dividend payout ratio of 50.79% is sustainable given stable cash flows from essential waste services
Analyst target price of $245.71 implies 17.5% upside, signaling continued confidence
Key Risks
Earnings declined 20.7% YoY despite revenue growth, indicating margin compression or one-time costs
Premium valuation: P/E of 32.89 vs sector avg 27.01 and forward P/E of 25.92 limits near-term upside
Debt/Equity ratio of 2.45 is above sector average of 1.77, increasing refinancing risk in high-rate environment
Insider selling activity, including CFO sale of $14.39M, signals lack of confidence at executive level
Current ratio of 0.84 and quick ratio of 0.73 suggest tight short-term liquidity
AI Fair Value Estimate
Based on comprehensive analysis
$245.71
+17.5% above current price
Performance Snowflake
Multi-dimensional AI analysis across 5 key categories
Stock Price & Analyst Targets
Real-time price movements and analyst price targets
Historical Performance Trends
Long-term financial metrics and growth patterns
Valuation Metrics
Key valuation ratios and pricing indicators
Profitability, Growth & Financial Health
Detailed profit margins, ROE, debt ratios, and liquidity metrics
Sector Comparison & Peer Analysis
Compare WM against industry averages and similar companies
Insider Trading & Analyst Ratings
Track insider transactions and Wall Street analyst recommendations