Waste Management (WM) shares recently pulled back, slipping about 1% over the past day and nearly 4% for the month. For investors watching the waste disposal sector, this dip invites a closer look at what is driving recent performance.
Looking beyond the latest pullback, Waste Management’s 1-year total shareholder return of 5% suggests steady, if unspectacular, gains. Momentum has faded a bit compared to the robust multi-year streak. Recent price action likely reflects shifting market sentiment around growth prospects and valuation rather than any single event.
The question now is whether Waste Management’s recent weakness leaves the stock undervalued, presenting a buying opportunity, or if the market has already priced in most of its future growth potential.
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Most Popular Narrative: 15.7% Undervalued
Waste Management’s last close of $216.91 stands noticeably below the most popular narrative fair value estimate of $257.3. This suggests a possible opportunity seen by consensus analysts. With a gap like this, understanding what drives these assumptions becomes essential for investors watching the stock’s next move.
The implementation of technology to supplement the workforce and optimize cost structures is expected to be a significant differentiator for Waste Management. This could potentially lead to improved net margins. The company's strategic investments in sustainability, particularly in the areas of recycling and renewable energy, are showing strong, high-return growth, which could drive future revenue increases.
Want to know what’s fueling this ambitious price target? The combination of margin expansion, aggressive tech investment, and a bold vision for future growth forms the basis. Curious about the financial leaps analysts expect Waste Management to make in the coming years? The full narrative reveals the key profit and revenue assumptions behind this valuation.
However, ongoing economic pressures and the expiration of tax credits could disrupt Waste Management’s growth story. This may challenge the current bullish outlook.
While analyst forecasts highlight upside, Waste Management’s price-to-earnings ratio of 32.1x is above the industry average of 29.6x but still below the peer average of 47.3x. The fair ratio is estimated at 34.4x, suggesting the current valuation is reasonable but not especially cheap. This premium could signal higher expectations or potentially limit future returns.
If the consensus story does not align with your perspective or you prefer to dig into the numbers yourself, you can easily build your own view in just a few minutes. Do it your way
A great starting point for your Waste Management research is our analysis highlighting 3 key rewards and 1 important warning sign 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.
Valuation is complex, but we're here to simplify it.
Discover if Waste Management might be undervalued or overvalued with our detailed analysis, featuring fair value estimates, potential risks, dividends, insider trades, and its financial condition.
Through its subsidiaries, provides environmental solutions to residential, commercial, industrial, and municipal customers in the United States, Canada, Western Europe, and internationally.
