• If you have been watching Waste Management and wondering whether the current price gives you fair value for the risk you take, this article is designed to help you frame that question clearly.
• The stock last closed at US$217.75, with returns that slipped 0.5% over the past week, 2.5% over the past month, 0.3% year to date, but gained 40.8% over three years and 67.5% over five years.
• These mixed returns sit against a backdrop where Waste Management continues to be a core player in essential services and often features in long term portfolios that prioritize stability and consistent operations. While short term moves have been modest, the longer multi year track record helps explain why investors keep revisiting whether the stock still offers reasonable value for that profile.
• Simply Wall St currently gives Waste Management a valuation score of 2/6. This means it screens as undervalued on only a couple of key checks. Next, you will see how different valuation approaches line up on this stock, and then finish with a way to think about value that goes beyond any single model.

Waste Management scores just 2/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.

Approach 1: Waste Management Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow model projects a company’s future cash flows and then discounts them back to today’s dollars, aiming to estimate what those future streams are worth right now.

For Waste Management, the latest twelve month free cash flow sits at about $2.90b. Using a 2 Stage Free Cash Flow to Equity approach, analysts and Simply Wall St estimates project free cash flow of $4.48b by 2030. Estimates for the earlier years come from multiple analyst sources, while the later years in the ten year path are extrapolated from those inputs.

When these projected cash flows are discounted back using the DCF model, the intrinsic value per share is approximately $240.66. Compared with the recent share price of $217.75, this implies that, according to this model, the stock trades at roughly a 9.5% discount to the estimated fair value.

Result: ABOUT RIGHT

Waste Management is fairly valued according to our Discounted Cash Flow (DCF), but this can change at a moment's notice. Track the value in your watchlist or portfolio and be alerted on when to act.

Approach 2: Waste Management Price vs Earnings

For a profitable company, the P/E ratio is a straightforward way to relate what you pay for each share to the earnings that support it. Investors usually accept a higher P/E when they expect stronger growth or see lower risk, and look for a lower P/E when growth expectations are more modest or risk feels higher. There is no single "right" P/E, but context matters.

Waste Management currently trades on a P/E of 31.30x. That sits above the broader Commercial Services industry average of 22.09x, and just below the average of its peer group at 34.27x. To give more tailored context, Simply Wall St calculates a proprietary Fair Ratio for the stock of 29.98x. This Fair Ratio reflects factors such as earnings growth expectations, the company’s profit margins, its industry and its market capitalization, and also incorporates an assessment of risk.

Because the Fair Ratio is built around Waste Management’s own profile, it can be more informative than simply lining it up against industry or peer averages. Comparing the current P/E of 31.30x with the Fair Ratio of 29.98x suggests the stock trades somewhat above that modeled level, so on this metric it screens as slightly overvalued.

Result: OVERVALUED

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Upgrade Your Decision Making: Choose your Waste Management Narrative

Earlier it was mentioned that there is an even better way to understand valuation. Narratives on Simply Wall St let you attach a clear story to the numbers by linking your view of Waste Management’s business to a forecast for revenue, earnings and margins, then to a fair value you can compare with the current price. All of this is available inside an accessible Community page that updates as new news or earnings arrive. Some investors might build a Waste Management Narrative around a higher fair value closer to US$277 if they focus on technology, sustainability projects and healthcare integration. Others might lean toward a lower fair value near US$198 if they focus on risks like regulation, integration challenges or revenue volatility.

Do you think there's more to the story for Waste Management? Head over to our Community to see what others are saying!

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.