Waste Management, Inc.
Waste Management, Inc. Fundamental Analysis
Waste Management, Inc. (WM) shows moderate financial fundamentals with a PE ratio of 32.40, profit margin of 10.99%, and ROE of 28.85%. The company generates $25.3B in annual revenue with strong year-over-year growth of 14.24%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 59.4/100 based on profitability, valuation, growth, and balance sheet metrics. The C grade reflects average fundamentals, with notable risks in certain areas.
Fundamental Health Score
We analyze WM's fundamental strength across five key dimensions:
Efficiency Score
WeakWM struggles to generate sufficient returns from assets.
Valuation Score
WeakWM trades at a premium to fair value.
Growth Score
ModerateWM shows steady but slowing expansion.
Financial Health Score
WeakWM carries high financial risk with limited liquidity.
Profitability Score
ModerateWM maintains healthy but balanced margins.
Key Financial Metrics
Is WM Expensive or Cheap?
P/E Ratio
WM trades at 32.40 times earnings. This suggests a premium valuation.
PEG Ratio
When adjusting for growth, WM's PEG of 7.99 indicates potential overvaluation.
Price to Book
The market values Waste Management, Inc. at 9.03 times its book value. This suggests the stock is fully valued or overvalued on an asset basis.
EV/EBITDA
Enterprise value stands at 9.10 times EBITDA. This is generally considered low.
How Well Does WM Make Money?
Net Profit Margin
For every $100 in sales, Waste Management, Inc. keeps $10.99 as profit after all expenses.
Operating Margin
Core operations generate 18.46 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $28.85 in profit for every $100 of shareholder equity.
ROA
Waste Management, Inc. generates $6.11 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Waste Management, Inc. produces operating cash flow of $6.31B, showing steady but balanced cash generation.
Free Cash Flow
Waste Management, Inc. generates strong free cash flow of $3.28B, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $8.16 in free cash annually.
FCF Yield
WM converts 3.65% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
32.40
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
7.99
vs 25 benchmark
P/B Ratio
Price to book value ratio
9.03
vs 25 benchmark
P/S Ratio
Price to sales ratio
3.55
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
2.28
vs 25 benchmark
Current Ratio
Current assets to current liabilities
0.93
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.29
vs 25 benchmark
ROA
Return on assets percentage
0.06
vs 25 benchmark
ROCE
Return on capital employed
0.12
vs 25 benchmark
How WM Stacks Against Its Sector Peers
| Metric | WM Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 32.40 | 26.32 | Worse (Expensive) |
| ROE | 28.85% | 1286.00% | Weak |
| Net Margin | 10.99% | -41798.00% (disorted) | Strong |
| Debt/Equity | 2.28 | 0.72 | Weak (High Leverage) |
| Current Ratio | 0.93 | 10.61 | Weak Liquidity |
| ROA | 6.11% | -1507802.00% (disorted) | Weak |
WM outperforms its industry in 1 out of 6 key metrics, particularly excelling in Net Margin, but lagging in P/E Ratio.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Waste Management, Inc.'s 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
73.97%
Industry Style: Cyclical, Value, Infrastructure
High GrowthEPS CAGR
90.14%
Industry Style: Cyclical, Value, Infrastructure
High GrowthFCF CAGR
86.53%
Industry Style: Cyclical, Value, Infrastructure
High Growth