Waste Management

Waste Management collects trash and recycling from homes and businesses, using trucks and transfer stations to move the waste to its disposal sites. It owns and operates the largest network of landfills in the United States and Canada. This land is the core of its moat, since a landfill permit takes years to win against local opposition, so a new competitor can rarely open a site nearby. WM also runs one of the largest recycling businesses in North America, sorting and reselling recovered paper, plastic, and metal.

It captures methane gas from its landfills and turns it into renewable natural gas, which it sells as vehicle fuel or into the pipeline grid, turning a waste byproduct into a growing source of profit. In November 2024, WM bought Stericycle for about $7.2 billion, including debt, adding medical waste collection and secure document destruction. This business now runs as the Healthcare Solutions segment, using WM's existing routes and disposal network to serve a new, regulated market.

Waste Management is priced the way a steady, wide-moat compounder usually is, meaning the market is not pricing in a big problem. Wide-moat means the analysts rate its competitive advantage as strong and lasting. A compounder is a company that steadily grows earnings over many years. Instead the market is pricing in two near-term questions.

One is whether Healthcare Solutions, built from the 2024 Stericycle purchase, can grow its revenue again while it delivers its planned savings. The other is whether two leadership changes close together, a new CFO in late 2025 and a new CEO taking over in January 2027, go smoothly. For the gap to close, Healthcare Solutions revenue needs to grow again. Management targets more than $300 million of synergies by the end of 2027, about $250 million of cost savings and about $50 million from selling more services to the same customers.

These synergies need to show up in the numbers. Incoming CEO John Morris needs to keep the operating momentum management built over the last decade. WM's core waste and recycling business keeps growing EBITDA, a measure of operating profit, and free cash flow faster than revenue. This gives management room to work through these transition risks without hurting the dividend or the buyback plan.

The next earnings report, due October 27, 2026, should show whether Healthcare Solutions revenue grows again after management trimmed 2026 revenue guidance in July on lower volumes. John Morris takes over as CEO on January 4, 2027. The following two to four quarters should show whether that handoff and the Healthcare Solutions turnaround stay on track. Even a small miss on either point could keep the stock from moving to a higher valuation.

1. Oct 27, 2026Pending

   Q3 2026 earnings: Healthcare Solutions revenue and synergiesHealthcare Solutions revenue growth, synergies on track and EBITDA guidance of $8.15 to $8.25 billion kept pass; another revenue cut or lower EBITDA guidance fails.
2. Jan 4, 2027Pending

   John Morris becomes CEOA smooth handover with no change to strategy or financial targets passes; senior departures or a strategy reset fails.
3. Jan 2027 · est.Pending

   Full-year 2026 results and 2027 guidance2026 free cash flow of $3.75 to $3.85 billion and 2027 guidance for EBITDA growth with synergies on track for more than $300 million by the end of 2027 pass; a miss or weak 2027 outlook fails.

Every passed and failed checkpoint across all picks

WM funds its trucks, landfills and acquisitions with unsecured debt that the parent company issues and its subsidiary WM Holdings guarantees. WM targets total debt of 2.5 to 3.0 times EBITDA, as its credit agreement defines it, so leverage leaves less room for another large acquisition. Read more

• Healthcare Solutions, the segment built from the 2024 Stericycle acquisition, has revenue below plan. Its revenue was $1,252 million in the first half of 2026, down from $1,265 million a year earlier, while management had guided to about 3% growth for 2026. Management says the synergies are on track for more than $300 million by the end of 2027, but the segment needs revenue growth to meet its plan.
• WM already trades close to its estimated fair value, about a 5% discount. This leaves little room for error. If growth or margins disappoint, the stock has less of a cushion than a more deeply discounted pick would.
• Recycling profit depends on prices for paper, plastic, and other recovered materials that WM does not control. Management estimates that a $10-per-ton move in the blended single-stream recycled-commodity price changes operating EBITDA by about $27 million.
• WM is going through two senior leadership changes close together. CFO David Reed started in November 2025, and CEO Jim Fish is retiring, with John Morris taking over in January 2027. Two transitions this close together add execution risk.
• New state rules on PFAS chemicals in landfills, plus rising fuel and labor costs, could raise WM's operating expenses faster than its pricing can offset them.

• August 26, 2026Jim Fish announced he will retire as CEO after more than a decade in the role and over 25 years at WM. The board named President John Morris as his successor, effective January 4, 2027. Fish stays as an adviser until mid-February 2027.
• July 28, 2026WM reported Q2 2026 results. Revenue grew 4.0% to $6.68 billion. Adjusted operating EBITDA grew 5.5% to $2.07 billion, a 30.9% margin. Free cash flow grew 35% to $1.10 billion. Management trimmed full-year revenue guidance to $26.275-$26.475 billion on lower volume expectations, but kept its EBITDA and free cash flow guidance unchanged. Healthcare Solutions revenue fell to $638 million from $646 million a year earlier.
• May 13, 2026WM promoted Tara Hemmer, its Chief Sustainability Officer, to Executive Vice President and Chief Operating Officer. Rafael Carrasco, the head of Healthcare Solutions, retired on July 17, 2026, and the segment now reports to President John Morris.