Do Margin Pressures Reveal New Challenges for Waste Management’s (WM) Long-Term Strategy?

• In recent days, Waste Management, Inc. reported mixed third-quarter 2025 results, showing revenue growth to US$6.44 billion but lower net income and operating margins amid persistent declines in recycled commodity prices and slower progress in its Healthcare Solutions segment.
• The company signaled continued commitment to technology investment and tuck-in acquisitions, emphasizing the integration of its Healthcare Solutions business while lowering full-year revenue guidance to the low end of its previous range.
• We’ll now examine how margin pressures linked to persistent cost increases and weaker recycling markets may affect Waste Management’s long-term investment narrative.

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Waste Management Investment Narrative Recap

Shareholders in Waste Management must believe in the company’s ability to drive margin improvement through technology, sustainability, and steady integration of growth businesses, despite short-term disruptions. Recent results, showing robust revenue growth but lower net income and margins due to recycling headwinds and cost inflation, do not materially alter the biggest catalyst, continued investment in automation and tuck-in acquisitions, or the chief risk of recycling price volatility. The long-term thesis remains tied to cost optimization and execution on strategic growth.

The announcement that Waste Management remains focused on tuck-in acquisitions is especially relevant, reinforcing the company’s pursuit of margin accretive growth and network scale. With pricing strategies and network expansion still in focus, investors may find these actions directly address ongoing margin pressures. This initiative sits at the heart of WM’s drive to counteract commodity and cost headwinds while extending its competitive advantage.

Yet, in contrast to these efforts, persistent pressure on recycled commodity prices presents a hurdle that investors should be aware of…

Read the full narrative on Waste Management (it's free!)

Waste Management's outlook projects $29.4 billion in revenue and $4.0 billion in earnings by 2028. This is based on a 7.0% annual revenue growth rate and a $1.3 billion increase in earnings from the current $2.7 billion.

Uncover how Waste Management's forecasts yield a $246.64 fair value, a 23% upside to its current price.

Exploring Other Perspectives

The Simply Wall St Community supplied 10 fair value estimates for WM shares ranging from US$199.95 to US$246.64. While many highlight margin optimization as a key opportunity, volatility in recycling markets could challenge near-term performance so it is worth considering several viewpoints.

Explore 10 other fair value estimates on Waste Management - why the stock might be worth as much as 23% more than the current price!

Build Your Own Waste Management Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Waste Management research is our analysis highlighting 4 key rewards and 1 important warning sign that could impact your investment decision.
• Our free Waste Management research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Waste Management's overall financial health at a glance.

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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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