Waste Connections (WCN) shares were in focus after first quarter 2026 results topped expectations, with management reaffirming full year guidance and pointing to benefits from solid waste pricing, special waste volumes, and AI driven pricing tools.

Despite the upbeat first quarter, the recent share price has been weaker, with a 30 day share price return of 2.92% and a year to date share price return of 7.40%. The 1 year total shareholder return of 17.88% contrasts with 3 and 5 year total shareholder returns of 17.00% and 35.47%, suggesting momentum has cooled even as Waste Connections continues to repurchase shares, maintain its dividend and pursue further M&A.

If you are weighing what comes next for waste and infrastructure linked names, it could be a good moment to look across the 35 power grid technology and infrastructure stocks.

With WCN now trading below analyst targets and carrying an intrinsic value estimate at a discount, investors are left with a key question: is this a genuine entry point, or are markets already baking in the next leg of growth?

Most Popular Narrative: 19% Undervalued

With Waste Connections closing at $161.23 against a narrative fair value of $199.16, the widely followed view leans toward a quality premium supported by execution and cash flow visibility.

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 model still supports a premium tag on future earnings and margins, even with moderate revenue growth assumptions and a higher required return on capital?

Result: Fair Value of $199.16 (UNDERVALUED)

However, you also need to weigh weather related volume headwinds and the reliance on acquisitions, in which tougher integration or weaker synergies could pressure margins.

Another View: What The P/E Ratio Is Signalling

While the SWS DCF model suggests WCN is trading about 29.7% below an estimate of fair value at $229.38, its current P/E of 38.9x sits well above both the US Commercial Services industry at 22.1x and peers at 33.7x, and even above a fair ratio of 27.5x. That kind of gap can point to either a quality premium or valuation risk. Which side of that trade do you think you are on?

Next Steps

Conflicted about whether the current mood around Waste Connections is too cautious or not cautious enough? Act while the data is fresh, weigh both the concerns and potential upsides, and see the full picture with the 4 key rewards and 2 important warning signs

Looking for more investment ideas?

If WCN is on your radar, do not stop there. Broaden your watchlist with ideas that match your style before the next round of opportunities moves on.

• Target potential mispricing by checking companies that screen as high quality and possibly undervalued through the 50 high quality undervalued stocks.
• Strengthen your income focus by reviewing companies with higher yields that feature in the 13 dividend fortresses.
• Prioritise resilience by assessing companies highlighted in the 69 resilient stocks with low risk scores.

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.