Key Stats for Waste Management Stock
- 52-Week Range: $194 to $248
- Current Price: $230
- Street Mean Target: $255
- Street High Target: $285
- TIKR Model Target (Dec. 2030): $388
What Happened?
Waste Management, Inc. (WM) is the largest environmental services company in North America, collecting, transferring, and disposing of solid waste for millions of residential, commercial, and industrial customers across the United States and Canada.
Waste Management stock has returned less than 1% over the past year.
The business it represents just delivered the best operating margins in company history.
That gap is the story.
Waste Management stock entered 2026 with a record no company in its history had ever set: operating expenses fell below 60% of revenue for a full calendar year, finishing 2025 at 59.5%.
That number sounds incremental. The structural implication is not.
For decades, WM ran its fleet-intensive collection and disposal business with operating costs persistently above that threshold. The ceiling cracked in 2025 through a combination of fleet modernization, frontline retention improvement, and connected-truck technology that reduced unplanned repairs, overtime hours, and dependence on third-party maintenance services.
Driver turnover reached its lowest quarterly level of the year at 15.7% in Q4, a direct output of WM’s people-first investment program now compounding across both its Legacy Business and the newly integrated Healthcare Solutions segment.
WM also commissioned 7 new renewable natural gas (RNG) facilities in 2025, doubling output year-over-year, and completed automation upgrades at 5 recycling facilities across 4 new markets, with recycling EBITDA growing 22% despite commodity prices running nearly 20% lower for the year.
The Q4 headline, however, told a more complicated story: revenue of $6.31 billion missed the $6.39 billion analyst estimate, dragged lower by Healthcare Solutions, where lost accounts from the Stericycle integration and ongoing credit memo activity suppressed realized pricing.
CEO Jim Fish addressed the issue directly on the Q4 2025 earnings call: “We’ve really kind of built a wall now between all that is continuing to go on, on the back office side of that business and the customer themselves.”
Customer service scores within Healthcare Solutions have risen above Legacy Business levels, and segment SG&A improved 350 basis points year-over-year to 20.8% of revenue in Q4, with management guiding the full company below 10% SG&A as a percentage of revenue in the near term.
The 2026 guidance captures both the structural strength of the core business and the temporary weight of the acquisition: operating EBITDA growth of 6.2% at the midpoint normalizes to 7.4% after excluding the $82 million wildfire cleanup volume benefit from 2025, and free cash flow is expected to grow nearly 30% to $3.8 billion, with WM committing to return more than 90% of that to shareholders through dividends and a new $3 billion share repurchase program.
Wall Street’s Take on WM Stock
The Q4 revenue miss pulled attention toward Healthcare Solutions integration risk, but the more durable development in WM’s results is what the Legacy Business cost structure is now capable of generating in cash.
WM’s free cash flow reached $2.94 billion in 2025, up nearly 27%, and consensus projects approximately $3.76 billion in 2026, representing around 28% growth off an already elevated base, anchored by the structural OpEx improvement and declining capital intensity from the fleet modernization cycle.
Of 29 analysts covering Waste Management stock, 19 rate it a buy or outperform against 9 holds and 1 underperform, with a mean price target of $254.72, implying approximately 11% upside from current levels; notably, the mean target has risen from $246.63 at year-end 2025 to $254.72 today, a quiet upgrade trend running against the narrative of a guidance miss.
The target spread runs from $210 on the low end to $285 on the high end: the bearish anchor prices in sustained Healthcare Solutions friction and sustainability EBITDA headwinds into 2027; the bullish anchor reflects a scenario where RNG volume ramp, cross-selling acceleration, and structural margin expansion track ahead of WM’s revised guidance.
Priced at approximately 31x forward FCF against a business guiding to around 28% FCF growth in 2026, Waste Management stock appears undervalued relative to its five-year historical average multiple, particularly given that four consecutive quarters of sub-60% OpEx have confirmed the cost transformation is structural rather than cyclical.
The risk is not the core business. It is the 2027 sustainability EBITDA target, revised down to approximately $700 million from the $760 million to $800 million figure at Investor Day, driven by recycled commodity prices falling from $125 per ton to $70 per ton, with management declining to reaffirm longer-term guidance.
The catalyst is WM’s Q1 2026 earnings release on April 28: the number to watch is Healthcare Solutions top-line growth, where management has guided 3% total revenue with 4.2% pricing, implying negative volume that should begin anniversarying in H2.
What Does the Valuation Model Say?
The TIKR model’s $388 price target reflects a mid-case assumption of around 5% revenue CAGR through 2030, net income margins expanding toward approximately 15%, and EPS growth of around 9% annually, translating to a 69% total return from today’s price at an annualized IRR of approximately 12% — a return profile that sits well above the 11% implied by the current Street mean target of $254.72.
With FCF growing from $2.94 billion in 2025 to a consensus estimate of approximately $3.76 billion in 2026, and the structural cost transformation now documented across four consecutive quarters, Waste Management stock appears undervalued at a price that still embeds acquisition-era complexity rather than the FCF compounder the operating results are now describing.
The investment case hinges on one central question: whether the Legacy Business cost structure is durable enough to absorb the ongoing Healthcare Solutions integration expense without degrading margins through 2026 and into 2027.
Base Case / Downside Risk
Base Case
- Operating EBITDA grows approximately 7% in 2026 on a normalized basis (excluding wildfire comps), supported by 250 basis points of pricing power over cost inflation and a structural sub-60% OpEx floor confirmed across all four 2025 quarters
- Healthcare Solutions SG&A falls from 20.8% toward approximately 17% by end of 2026, consistent with WM’s confirmed $300 million synergy target, with management reporting above-top-end SG&A synergy capture in 2025 alone
- RNG volume doubles in 2026, with 60% of volumes contracted and 40% exposed to voluntary markets at approximately $24.50 per MMBtu; 6 new RNG facilities and 4 recycling facilities come online in 2026, with sustainability EBITDA contribution of $235 million to $255 million
- Free cash flow reaches approximately $3.76 billion in 2026 at consensus, with WM returning more than $3.5 billion through dividends and buybacks, representing more than 90% of expected FCF
Downside Risk
- Healthcare Solutions top-line is guided to only 3% growth in 2026 (4.2% price, negative volume), fully dependent on lost accounts anniversarying in H2; if churn persists beyond that window, the segment remains dilutive to consolidated margins into 2027
- The revised $700 million 2027 sustainability EBITDA target sits on recycled commodity prices at $70 per ton, already stressed against a $62 per ton Q4 2025 exit rate; any further commodity softness extends the gap from the original $760 million to $800 million Investor Day target
- Management declined to reaffirm 2027 guidance on the January 29 earnings call, and a reclassification of approximately $150 million in accretion expense creates comparability noise that may delay multiple re-rating
- Industrial collection volumes only recently bounced from seven to eight consecutive negative quarters; a macro softening could reverse that nascent recovery and add volume headwind to an already modest 5% revenue growth guide
Should You Invest in Waste Management, Inc.?
The only way to really know is to look at the numbers yourself. TIKR gives you free access to the same institutional-quality financial data that professional analysts use to answer exactly that question.
Pull up WM stock and you’ll see years of historical financials, what Wall Street analysts expect for revenue and earnings in the quarters ahead, how valuation multiples have moved over time, and whether price targets are trending up or down.
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