Waste Connections (WCN): A Fresh Look at Valuation as Shares Hold Steady

Waste Connections (NYSE:WCN) shares have moved slightly over the past week, continuing a trend of mild fluctuations investors have gotten used to this year. With the recent lack of major news, the stock’s valuation may come into sharper focus for some.

See our latest analysis for Waste Connections.

Shares have largely treaded water recently, but stepping back, Waste Connections has delivered robust long-term growth for shareholders with a five-year total shareholder return of 73%, while short-term share price moves remain minimal. This suggests steady fundamentals are winning out over short-term trading noise.

If you’re on the lookout for more opportunities beyond this steady performer, consider broadening your search and discover fast growing stocks with high insider ownership.

But with valuation metrics signaling a possible discount to analyst targets, investors face a pivotal question: Is Waste Connections trading below its true worth, or has the market already factored in the company's future growth prospects?

Most Popular Narrative: 18% Undervalued

With the last close price at $173.03 compared to a narrative fair value of $210.95, the valuation gap is drawing attention. Momentum is shifting as investors weigh strong operational drivers against a sizable discount.

The integration of a strategic state-of-the-art recycling facility in New Jersey is expected to complement their expanding New York City franchise. This could enhance service capabilities and drive revenue growth.

Read the complete narrative.

Want to know the secret sauce behind this bullish outlook? The narrative hinges on bold forecasts for both robust revenue growth and a step-change in profit margins by 2028. Discover what fuels these expectations and the surprising assumptions hidden behind these targets.

Result: Fair Value of $210.95 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, persistent severe weather and challenges in integrating acquisitions could quickly derail the optimistic growth outlook that analysts currently foresee for Waste Connections.

Find out about the key risks to this Waste Connections narrative.

Another View: What Do Multiples Say?

Looking at the company’s price-to-earnings ratio, Waste Connections trades at 69.1 times earnings. This is much higher than peers at 38 times and the broader industry at 28.1 times. The fair ratio, based on our analysis, stands at 36.3 times. This sizable gap points to clear valuation risk, as the market expects sustained strong growth. Could this premium be justified, or is there a correction ahead?

See what the numbers say about this price — find out in our valuation breakdown.

Build Your Own Waste Connections Narrative

If you find yourself questioning these conclusions or want to dig deeper on your own, you can craft your own view in just a few minutes with Do it your way.

A great starting point for your Waste Connections research is our analysis highlighting 3 key rewards and 3 important warning signs that could impact your investment decision.

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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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