Waste Connections stock snapshot after recent performance

Waste Connections (WCN) has drawn investor attention after a year where the stock is down 18.1%, while it shows a 15.7% total return over the past 3 years and 34.2% over 5 years.

At a share price of $155.47, Waste Connections has seen its short term share price weaken, with a 1 day share price return that fell 2.24% and a 90 day share price return that declined 6.64%. However, the 5 year total shareholder return of 34.22% reflects a more resilient longer term record, so recent momentum appears to be fading.

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With the stock down 18.1% over the past year but trading at a discount to some estimated value measures, you have to ask: is Waste Connections quietly undervalued here, or is the market already pricing in its future growth?

Most Popular Narrative: 23.9% Undervalued

Against the last close of $155.47, the most followed narrative pegs Waste Connections' fair value at $204.32, framing the recent share pullback as a potential discount.

Waste Connections’ pricing strategy has shown strong execution with a price-led organic solid waste growth, resulting in high visibility for full-year 2025 core pricing of at least 6%, which is expected to positively impact their revenue. The company’s reduction in voluntary turnover and improved employee retention for ten consecutive quarters indicate a healthier company environment, likely supporting operating efficiencies and margin expansion, thereby positively impacting net margins.

Want to see what sits behind that pricing power story? The narrative leans heavily on revenue compounding, margin expansion and a richer future earnings multiple tied to quality.

Result: Fair Value of $204.32 (UNDERVALUED)

However, you still need to weigh weather related volume pressure and the company’s reliance on acquisitions, which could strain margins if integration or demand disappoints.

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Another View: Rich P/E Tells a Different Story

That 23.9% DCF style discount is only one side of the picture. On earnings, Waste Connections trades on a P/E of 37.5x, compared with 31.2x for peers and 20.8x for the broader US Commercial Services industry, while the fair ratio is 24.2x. That is a steep premium, so is the market already paying up for the quality that the narrative is assuming?

Next Steps

With mixed signals on value and quality running through this article, it makes sense to check the underlying data yourself and move quickly to shape your own view by weighing the 4 key rewards and 1 important warning sign.

Looking for more investment ideas?

If Waste Connections has you thinking about portfolio upgrades, do not stop here. The next step is lining up fresh ideas that fit your own style.

• Spot potential value opportunities early by scanning companies that appear cheaply priced relative to quality, starting with the 46 high quality undervalued stocks.
• Prioritize stability by reviewing stocks that show resilient profiles, using the 67 resilient stocks with low risk scores to focus on companies with lower risk scores.
• Hunt for less crowded opportunities by checking the screener containing 20 high quality undiscovered gems that combine solid fundamentals with lower market attention.

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.