Waste Connections (WCN) has launched a new share repurchase program that allows the company to buy back up to 12,578,462 common shares, representing 5% of its 251,569,244 issued and outstanding shares.

The share repurchase plan comes as Waste Connections trades at US$168.33, with the share price return rising 8.10% over the past 90 days while the 1 year total shareholder return has declined 8.96%. This suggests recent momentum has improved compared with longer term performance.

If you are weighing this buyback alongside other opportunities, it may be a good time to scan for companies positioned for long term infrastructure needs, including power and grid upgrades, using the 39 power grid technology and infrastructure stocks

Bulls may point to Waste Connections committing fresh cash to repurchases, while bears may focus on the recent 1-year share price decline. Which case does the current valuation data support as you evaluate the stock today?

Most Popular Narrative: 18% Undervalued

The most followed narrative on Waste Connections compares a fair value of $203.92 with the last close at $168.33, framing the current buyback against a discounted valuation and a long term earnings story built around steady execution.

Robust acquisition activity, with annualized revenues closed already over $125 million, and a strong balance sheet position Waste Connections well for continued growth and successful integration of acquisitions, supporting future revenue and earnings growth. The integration of a strategic state-of-the-art recycling facility in New Jersey is expected to complement their expanding New York City franchise, potentially enhancing service capabilities and driving revenue growth.

Want to understand why this fair value sits well above today’s price? The narrative leans on a tight mix of steady revenue expansion, rising margins and a premium earnings multiple that assumes Waste Connections keeps compounding its cash flows over time.

Result: Fair Value of $203.92 (UNDERVALUED)

However, Waste Connections still faces risks from its increased use of acquisitions and its exposure to volatile commodity-linked revenues, which could challenge margins if conditions become less favorable.

Another View on Waste Connections Valuation

The SWS DCF model paints a different picture to the multiples narrative. On this view, Waste Connections at $168.33 is trading below an estimated future cash flow value of $273.25, which points to an undervalued stock even though the current P/E of 40x already looks demanding. The question is whether you place more weight on the cash flow path or the earnings multiple.

Next Steps

If the mixed signals around Waste Connections leave you undecided, take a close look at the data now and weigh the 3 key rewards and 2 important warning signs.

Looking for more investment ideas beyond Waste Connections?

If Waste Connections has sharpened your interest in opportunities, now is the time to scan wider and uncover stocks that better match your goals and risk comfort.

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• Spot potential value ideas by filtering for stocks that combine quality fundamentals with attractive pricing through the 50 high quality undervalued stocks.
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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.