Does the Recent Price Slide Create Opportunity in Waste Connections for 2025?

If you are weighing your next move with Waste Connections stock, you are in good company. In a market where many stocks have been on a rollercoaster, Waste Connections stands out for its resilience and consistency. Over the last three years, shares have climbed an impressive 37.1%, and the five-year mark is even stronger at 74.2% growth. Although the stock dipped slightly over the past month, down 2.7%, and is flat over the past year, the overall long-term trajectory remains encouraging.

What is fueling this performance? Part of the answer lies in steady demand for essential services and a business model that keeps Waste Connections insulated from short-term economic jitters. Over the last week, the stock has posted a 1.2% gain, a sign that investors are noticing its stability even as markets react to shifting economic headlines. This steadiness hints at growth potential but also reflects how investors continue to recalibrate risk in today’s uncertain environment.

Of course, confidence in a stock’s future needs to be grounded in a clear-eyed assessment of its current valuation. According to our framework, Waste Connections scores a 2 out of 6 for undervaluation, meaning it passes two of the six valuation checks we think matter most. That is just the starting point, though. Let’s break down the details behind each valuation approach, and stick around because before we finish, we will cover a more insightful way to look at Waste Connections’ real worth.

Waste Connections scores just 2/6 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

The Discounted Cash Flow (DCF) model estimates the value of a business by forecasting its future cash flows and discounting them back to today's value. This method aims to capture the economic reality of what a company is truly worth, based on its ability to generate cash in the years ahead.

For Waste Connections, the DCF model uses the most recent twelve months of Free Cash Flow (FCF), which totals approximately $1.2 Billion. Analysts provide detailed projections for the next several years, and further estimates are extrapolated beyond that. According to these projections, Waste Connections' annual FCF is expected to reach about $2.25 Billion by the end of 2029, with steady increases shown throughout the next decade.

After modeling these cash flows and discounting them to their present value, the DCF analysis estimates the intrinsic value of Waste Connections shares at $238.23. This suggests that the stock is currently trading at a 26.8% discount, indicating it is undervalued according to this approach.

Result: UNDERVALUED

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

Our Discounted Cash Flow (DCF) analysis suggests Waste Connections is undervalued by 26.8%. Track this in your watchlist or portfolio, or discover more undervalued stocks.

Approach 2: Waste Connections Price vs Earnings

The Price-to-Earnings (PE) ratio is one of the most popular ways to value profitable companies like Waste Connections. It helps investors determine how much they are paying for each dollar of earnings, making it particularly relevant when consistent profits are present.

What counts as a “normal” PE ratio often depends on expectations for future growth and the level of risk in the business. Higher growth companies can justify higher PE ratios. Companies facing greater risks typically trade at lower PEs to compensate investors for uncertainty.

Currently, Waste Connections trades at a PE ratio of 69.7x. This is significantly higher than both the Commercial Services industry average of 29.8x and the average for similar peers, which sits at 38.4x. While these figures might make Waste Connections appear expensive at first glance, there is more to the story.

This is where Simply Wall St’s “Fair Ratio” comes in. The Fair Ratio for Waste Connections is calculated at 36.3x, based on a proprietary blend of factors relevant to the business, such as earnings growth potential, profit margins, market cap, industry trends, and company-specific risks. Unlike simple peer or industry comparisons, the Fair Ratio offers a more tailored benchmark that better reflects the company’s actual prospects and risks.

Comparing the Fair Ratio of 36.3x to the company’s current PE of 69.7x, Waste Connections appears to be significantly overvalued on this metric.

Result: OVERVALUED

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

Upgrade Your Decision Making: Choose your Waste Connections Narrative

Earlier we mentioned there is an even better way to understand valuation, so let's introduce you to Narratives. A Narrative is a way for you to create and share your own story about a company like Waste Connections, connecting your personal expectations for its future revenue, earnings, and profit margins to an assumed fair value.

Instead of just relying on static ratios or historical trends, Narratives help you bring numbers to life by linking a company’s story and outlook directly to your financial forecast and determining what you think it’s actually worth. This approach is simple and interactive, and it is available through Simply Wall St’s Community page, making it easy for anyone, no matter your experience level, to build and adjust your case for buying, selling, or holding a stock.

With Narratives, you can instantly see whether Waste Connections is undervalued or overvalued by comparing your Fair Value (based on your assumptions) with the current market price. Your view will automatically update as new financial results or news are released. For example, on Waste Connections, some investors are highly optimistic, setting their fair value as high as $227 per share, while others take a more cautious stance and put it at just $150. This shows how Narratives reflect real differences in outlook grounded in each investor’s own logic and research.

Do you think there's more to the story for Waste Connections? Create your own Narrative to let the Community know!

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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