Waste Management (WM) is back on investor radar after its Q2 2026 update, where adjusted earnings beat consensus, margins widened and free cash flow rose, even as management trimmed full year revenue guidance on softer volumes.
See our latest analysis for Waste Management.
Waste Management's recent Q2 update, softer full year revenue guidance and active buybacks appear to have shifted sentiment, with the share price falling 4.3% over the last day and 4.6% over the past week, even as the 5 year total shareholder return sits near 65%.
If this kind of steady, cash focused profile appeals to you, it can be useful to also scan a wider set of resilient infrastructure linked opportunities through the 35 power grid technology and infrastructure stocks.
The recent pullback in Waste Management after solid Q2 earnings and lower revenue guidance raises a simple issue: Is the stock now tracking fundamentals or reacting to changing sentiment around growth and cash returns?
Price-to-Earnings of 31.7x: Is it justified?
Waste Management currently trades on a P/E of 31.7x, which puts the stock in line with a peer average of 31.9x but above several other benchmarks that investors often watch.
The P/E ratio compares the share price to earnings per share and gives a quick sense of how much investors are paying for each dollar of current earnings. For a company like Waste Management, with an established footprint in collection, landfill, recycling and related services, the P/E can reflect expectations around steady cash generation rather than rapid growth.
On this measure, Waste Management is described as good value relative to its peer average, since its 31.7x P/E sits slightly below the 31.9x peer level. However, the stock is labelled expensive compared to the wider US Commercial Services industry, where the average P/E is 19.3x, and also expensive against an estimated fair P/E of 26.6x that the SWS model suggests the market could eventually gravitate toward.
The contrast is clear when set out side by side. Waste Management trades at 31.7x earnings, roughly in line with close peers, well above the broader industry on 19.3x, and also above the 26.6x fair P/E estimate that implies a lower multiple level over time.
Explore the SWS fair ratio for Waste Management
Result: Price-to-Earnings of 31.7x (ABOUT RIGHT)
However, the Waste Management story could be knocked off course if revenue growth of 5.3% slows meaningfully or if sentiment weakens further after the recent share price pullback.
Find out about the key risks to this Waste Management narrative.
Another View on Waste Management using cash flows
The SWS DCF model offers a different lens on Waste Management. On this view, the stock at $226.33 is trading below an estimated future cash flow value of $266.31. That suggests a discount of about 15%. This raises the question of how much weight to place on earnings multiples versus long term cash generation.
Look into how the SWS DCF model arrives at its fair value.
Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Waste Management for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 56 high quality undervalued stocks. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.
Next Steps
Sentiment around Waste Management looks mixed after the latest update, so it could be worth checking the data yourself and weighing both sides. To see how the current risks compare with the potential rewards that investors are watching, review the 4 key rewards and 1 important warning sign
Looking for more investment ideas beyond Waste Management?
If you like what Waste Management offers but want a broader watchlist, you could miss useful opportunities if you stop your research here. Put the Simply Wall St Screener to work and let it surface ideas that match the kind of risk and return profile you actually want.
- Target potential mispricings by scanning for quality stocks trading at appealing valuations through the 56 high quality undervalued stocks.
- Prioritise resilience by using the 89 resilient stocks with low risk scores to filter for companies with steadier risk profiles that may better suit a cautious approach.
- Spot opportunities with strong foundations by checking the solid balance sheet and fundamentals stocks screener (46 results) for businesses with cleaner balance sheets and healthier fundamentals.
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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com