We’ve recently updated our valuation analysis.

Waste Management Valuation

Is WM undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

2/6

Valuation Score 2/6

  • Price-To-Earnings vs Peers

  • Price-To-Earnings vs Industry

  • Price-To-Earnings vs Fair Ratio

  • Below Fair Value

  • Significantly Below Fair Value

  • Analyst Forecast

Key Valuation Metric

Which metric is best to use when looking at relative valuation for WM?

Other financial metrics that can be useful for relative valuation.

WM key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue3.9x
Enterprise Value/EBITDA14.3x
PEG Ratio3.6x

Price to Earnings Ratio vs Peers

How does WM's PE Ratio compare to its peers?

The above table shows the PE ratio for WM vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyPEEstimated GrowthMarket Cap
Peer Average37.8x
RSG Republic Services
26.9x6.7%US$39.1b
WCN Waste Connections
41.8x12.6%US$33.8b
ROL Rollins
51.3x11.5%US$17.7b
TTEK Tetra Tech
31.1x5.5%US$8.2b
WM Waste Management
27.9x7.8%US$62.6b

Price-To-Earnings vs Peers: WM is good value based on its Price-To-Earnings Ratio (27.9x) compared to the peer average (37.8x).


Price to Earnings Ratio vs Industry

How does WM's PE Ratio compare vs other companies in the US Commercial Services Industry?

0 CompaniesPrice / EarningsEstimated GrowthMarket Cap
Industry Avg.n/a14.5%
n/an/an/a

Price-To-Earnings vs Industry: WM is expensive based on its Price-To-Earnings Ratio (27.9x) compared to the US Commercial Services industry average (22.5x)


Price to Earnings Ratio vs Fair Ratio

What is WM's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

WM PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio27.9x
Fair PE Ratio32.7x

Price-To-Earnings vs Fair Ratio: WM is good value based on its Price-To-Earnings Ratio (27.9x) compared to the estimated Fair Price-To-Earnings Ratio (32.7x).


Share Price vs Fair Value

What is the Fair Price of WM when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: WM ($152.61) is trading above our estimate of fair value ($136.57)

Significantly Below Fair Value: WM is trading above our estimate of fair value.


Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

The above table shows the analyst WM forecast and predictions for the stock price in 12 month’s time.
DateShare PriceAverage 1Y Price TargetDispersionHighLow1Y Actual priceAnalysts
CurrentUS$152.61
US$169.56
+11.1%
8.8%US$196.00US$129.00n/a18
Jan ’24US$156.88
US$171.71
+9.5%
8.7%US$196.00US$129.00n/a17
Dec ’23US$167.82
US$172.06
+2.5%
8.9%US$196.00US$129.00n/a17
Nov ’23US$156.52
US$172.06
+9.9%
8.9%US$196.00US$129.00n/a17
Oct ’23US$160.21
US$171.88
+7.3%
8.1%US$198.00US$128.00n/a17
Sep ’23US$170.04
US$170.29
+0.1%
8.1%US$198.00US$128.00n/a17
Aug ’23US$163.36
US$170.29
+4.2%
8.1%US$198.00US$128.00n/a17
Jul ’23US$155.65
US$170.94
+9.8%
9.1%US$198.00US$124.00n/a16
Jun ’23US$158.53
US$171.25
+8.0%
9.0%US$198.00US$124.00n/a16
May ’23US$164.44
US$170.44
+3.6%
9.6%US$198.00US$121.00n/a16
Apr ’23US$159.81
US$161.94
+1.3%
9.2%US$183.00US$121.00n/a16
Mar ’23US$146.58
US$161.75
+10.3%
9.2%US$183.00US$121.00n/a16
Feb ’23US$149.76
US$164.80
+10.0%
10.7%US$188.00US$110.00n/a15
Jan ’23US$166.90
US$163.00
-2.3%
10.8%US$188.00US$110.00US$156.8815
Dec ’22US$160.51
US$161.40
+0.6%
10.0%US$180.00US$110.00US$167.8215
Nov ’22US$159.28
US$161.40
+1.3%
10.0%US$180.00US$110.00US$156.5215
Oct ’22US$149.84
US$155.80
+4.0%
9.8%US$177.00US$105.00US$160.2115
Sep ’22US$155.85
US$154.73
-0.7%
10.2%US$177.00US$105.00US$170.0415
Aug ’22US$148.26
US$154.38
+4.1%
10.0%US$177.00US$105.00US$163.3616
Jul ’22US$141.17
US$140.25
-0.7%
9.3%US$160.00US$104.00US$155.6516
Jun ’22US$140.07
US$139.94
-0.09%
9.6%US$160.00US$104.00US$158.5316
May ’22US$137.97
US$139.94
+1.4%
9.6%US$160.00US$104.00US$164.4416
Apr ’22US$129.28
US$126.07
-2.5%
8.5%US$149.00US$103.00US$159.8115
Mar ’22US$112.48
US$126.07
+12.1%
8.5%US$149.00US$103.00US$146.5815
Feb ’22US$112.09
US$125.94
+12.4%
7.4%US$143.00US$103.00US$149.7616
Jan ’22US$117.93
US$124.81
+5.8%
7.4%US$143.00US$103.00US$166.9016

Analyst Forecast: Target price is less than 20% higher than the current share price.


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