Assessing Waste Management (WM) Valuation After Earnings Miss And Cost Efficiency Plans

Why Waste Management’s latest earnings matter for investors

Waste Management (WM) recently released fourth quarter and full year 2025 results that showed higher quarterly sales and earnings per share, but the stock came under pressure after the figures fell short of market expectations.

See our latest analysis for Waste Management.

At a share price of $226.60, Waste Management has logged a 12.22% 90 day share price return, while its 5 year total shareholder return of 116.53% points to a steadily compounding story that contrasts with the more muted 2.25% total shareholder return over the past year. Recent gains follow the fourth quarter earnings release, where growth in quarterly revenue and profit coincided with concern about softer residential volumes and margins. This appears to have tempered enthusiasm even as management highlights cost efficiency efforts and new 2026 revenue guidance.

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With WM now trading at $226.60 after a 12.22% 90 day run and a 5 year total return of 116.53%, the real question is whether recent earnings softness leaves hidden value or if the market is already pricing in future growth.

Most Popular Narrative: 8.7% Undervalued

At $226.60, the most followed narrative on Waste Management pegs fair value at $248.32, using a 7.39% discount rate and a detailed long term earnings roadmap.

The implementation of technology to supplement the workforce and optimize cost structures is expected to be a significant differentiator for Waste Management, potentially leading 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.

Read the complete narrative.

Curious how margin expansion, reinvestment into recycling and a higher future earnings multiple combine into that fair value? The full narrative lays out the earnings mix, revenue path and pricing power assumptions that need to hold for $248.32 to make sense.

Result: Fair Value of $248.32 (UNDERVALUED)

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

However, there are still pressure points, including revenue sensitivity to recycled commodity pricing and higher leverage from the Stericycle deal if integration progress is disappointing.

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

Build Your Own Waste Management Narrative

If you look at this and come to a different conclusion, or simply want to test your own assumptions, you can build a tailored view in just a few minutes, starting with 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.

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