Does The Latest DCF Point To More Upside For Waste Connections In 2025?

• If you have been wondering whether Waste Connections at around $175 a share is still worth buying, you are not alone. This stock often flies under the radar despite behaving like a quiet compounder.
• Over the past week the stock is up about 1.5%, roughly 0.3% over the last month, and it is sitting on a 3.1% gain year to date, with longer term returns of 34.2% over three years and 78.9% over five years that hint at a steady growth story rather than a flashy momentum trade.
• Much of the recent interest has been driven by ongoing discussion around resilient demand for waste management services, alongside investor focus on environmental infrastructure plays that can deliver stable cash flows. At the same time, sector wide shifts in regulation and municipal contracting are reminding the market that even defensive names like Waste Connections are not completely insulated from changing risk perceptions.
• Despite this, our valuation checks suggest Waste Connections only scores 1 out of 6 for being undervalued. We will unpack what different valuation methods say about the stock, then finish by looking at a more holistic way to judge whether the current price really makes sense.

Waste Connections scores just 1/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.

Approach 1: Waste Connections Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow model estimates what a business is worth by projecting the cash it can generate in the future, then discounting those cash flows back to today in $ terms. For Waste Connections, the 2 Stage Free Cash Flow to Equity model starts with last twelve months free cash flow of about $1.3 billion and projects this to rise steadily over the coming decade.

Analyst forecasts feed into near term estimates, with Simply Wall St extrapolating beyond that to reach a projected free cash flow of roughly $2.5 billion by 2035. These growing cash flows are then discounted to reflect risk and the time value of money, producing an estimated intrinsic value of about $201.45 per share.

Compared with the current share price around $175, the DCF suggests the stock is roughly 13.0% undervalued. This implies a modest margin of safety for long term investors rather than an extreme bargain.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests Waste Connections is undervalued by 13.0%. Track this in your watchlist or portfolio, or discover 914 more undervalued stocks based on cash flows.

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Waste Connections.

Approach 2: Waste Connections Price vs Earnings

For a mature, consistently profitable business like Waste Connections, the price to earnings ratio is a useful yardstick because it links what investors pay directly to the profits the company generates today. In general, faster growth and lower perceived risk justify a higher, or more expensive, PE multiple, while slower growth or higher uncertainty call for a lower one.

Waste Connections currently trades on about 72.09x earnings, which is well above the Commercial Services industry average of roughly 23.81x and also comfortably higher than the peer group average near 37.17x. To go a step further, Simply Wall St estimates a Fair Ratio of 35.51x. This represents the PE you might expect given the company’s earnings growth outlook, margins, size, industry positioning and risk profile.

This Fair Ratio framework is more informative than a simple comparison with peers or the sector, because it adjusts for company specific factors rather than assuming all operators deserve the same valuation. Set against this 35.51x Fair Ratio, the current 72.09x multiple suggests the shares are pricing in a lot of optimism and look clearly expensive on an earnings basis.

Result: OVERVALUED

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1466 companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your Waste Connections Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let us introduce you to Narratives, a simple way to connect your view of Waste Connections to concrete numbers like future revenue, earnings, margins and a fair value estimate. On Simply Wall St’s Community page, used by millions of investors, a Narrative is the story you believe about a company, translated into a financial forecast and then into a fair value you can compare directly with today’s share price to decide whether to buy, hold or sell. Narratives are dynamic, automatically updating when new information such as earnings releases, guidance changes or major news hits the market. This means your fair value view evolves alongside the business. For Waste Connections, one investor might build a bullish Narrative that assumes strong acquisition driven growth, rising margins and a fair value closer to the optimistic price target near $227. Another might take a more cautious view that emphasizes weather, commodity and integration risks and anchors fair value nearer the bearish $150 target, yet both are using the same easy framework to make clearer, more confident decisions.

Do you think there's more to the story for Waste Connections? Head over to our Community to see what others are saying!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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