Does Waste Connections' Expanding Green Services Signal a Fair Price in 2025?

If you’re thinking about what to do with shares of Waste Connections, you’re not alone. This waste management leader has caught the eye of plenty of investors lately, and it’s not just because of the steady returns. There is real debate about what it’s actually worth right now. Despite a slightly negative 1-year return of -3.5%, shares have bounced back in the longer run, gaining a hefty 77.4% over the last five years. Recent weeks have been quieter, with the stock inching up just 0.7% in the last 7 days and slipping a hair, by -0.1%, over the past month. But these numbers don’t tell the full story.

Behind the scenes, Waste Connections has been in the news for its continued expansion into new markets and environmentally focused services. This has signaled both growth potential and shifting investor expectations around risk. While these moves haven’t triggered any dramatic price swings, they have changed the conversation about how to value the company, something Wall Street is always eager to debate.

Looking at six common valuation checks, Waste Connections scores a 2, meaning it is currently undervalued in two out of six important ways. That suggests it is neither a screaming bargain nor wildly overpriced, adding fuel to the ongoing bullish-versus-bearish argument.

Next, let’s break down these valuation approaches and see what’s really driving that score. There is more than one way to put a price tag on this company, and at the end, I’ll reveal an even more insightful lens for understanding Waste Connections’ true value.

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 what a company's shares should be worth today by projecting future cash flows and discounting them back to their present value. For Waste Connections, this involves looking at the company's expected ability to generate cash and factoring in the time value of money. In essence, cash earned today is worth more than cash earned years from now.

Currently, Waste Connections produces $1.20 Billion in Free Cash Flow. Analyst estimates cover the next five years, after which projections are extrapolated. By 2029, cash flow is forecasted to reach $2.25 Billion, according to analysts, which illustrates meaningful growth over time. These figures are the foundation for projecting out another five years, using reasonable long-term assumptions provided by Simply Wall St.

Based on these cash flows, the DCF valuation model assigns an intrinsic value of $238.23 per share. This figure is 27.0% above the current stock price, suggesting that Waste Connections may be notably undervalued according to this method.

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 27.0%. Track this in your watchlist or portfolio, or discover more undervalued stocks.

Approach 2: Waste Connections Price vs Earnings (PE)

The Price-to-Earnings (PE) ratio is often the preferred metric for valuing profitable companies like Waste Connections because it directly relates the share price to the company’s earnings, allowing investors to assess how much they are paying for each dollar of profit. This makes the PE ratio especially useful for businesses with steady earnings streams, as it reflects what investors are willing to pay for the company’s core profitability.

However, what counts as a “normal” or “fair” PE ratio will depend on growth prospects and risk. Companies growing faster or with more stable earnings usually command a higher PE, while those facing uncertainty or slower growth might trade at a discount. For Waste Connections, the current PE ratio stands at 69.4x. In comparison, its peers average 37.2x, and the broader Commercial Services industry average is 27.4x. This suggests the stock trades at a much higher earnings multiple than most competitors.

That is where the Simply Wall St "Fair Ratio" provides deeper insight. Instead of just looking at industry or peer averages, the Fair Ratio incorporates Waste Connections' expected earnings growth, profit margins, market cap, risks, and its sector dynamics. For Waste Connections, the Fair PE Ratio is 36.9x, which offers a more nuanced estimate than any single comparison because it accounts for what actually sets the company apart.

With a current PE of 69.4x and a Fair Ratio of 36.9x, Waste Connections appears meaningfully overvalued on a price-to-earnings basis right now.

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. Narratives are your opportunity to frame your own investment story for Waste Connections by combining your expectations for fair value, future revenue, earnings, and margins with the factors driving the business today. Think of a Narrative as connecting the “why” behind your outlook to a forecast and, ultimately, to a specific estimate of fair value.

On Simply Wall St’s Community page, Narratives make it easy for anyone, whether new or seasoned, to build, share, and follow evolving perspectives, all in one place. As new earnings or news emerge, Narratives update automatically, allowing you to see exactly how these changes affect your outlook and fair value. By comparing your fair value with the current price, you can make more informed buy or sell decisions backed by transparent, data-driven logic.

For Waste Connections, different investors may see very different futures. The most optimistic Narrative sees the stock fairly valued at $227 per share, while the most cautious perspectives peg fair value at $150. This is a powerful illustration of how your own view can shape smarter decisions.

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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