- About
- 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 North Americathe 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 WM Healthcare Solutions segment, using WM's existing routes and disposal network to serve a new, regulated market.
- Thesis
- 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 WM Healthcare Solutions, built from the 2024 Stericycle purchase, can hitgrow its cost-saving targets after running below planrevenue 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 volumes needrevenue needs to stabilizegrow again. The roughlyManagement targets more than $250300 million in targetedof synergies by the end of 2027, about $250 million of cost savings and about $50 million from combiningselling more services to the two companies,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 volumes are stabilizingrevenue 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.
- Risks
- WM Healthcare Solutions, the segment built from the 2024 Stericycle acquisition, has been runningrevenue below plan. Softer volumes there were part of why management trimmed 2026Its revenue guidancewas $1,252 million in Julythe first half of 2026, and the roughlydown from $2501,265 million in targeted deala year earlier, while management had guided to about 3% growth for 2026. Management says the synergies is not yet fully realizedare 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 75% 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 pricesprice 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.
- Balance sheet
- Cash: $557M
Debt: $23.4B
Net debt: $22.8B
Net debt / EBITDA: 2.8× (medium)
Undrawn credit line: $2.2B, to May 2029
Debt due within 12 months: $3.8B
Ratings: S&P A-, Fitch A-, Moody's A3
WM funds its trucks, landfills and acquisitions with unsecured debt that the parent company issues and its subsidiary WM Holdings guarantees. Leverage is inside itsWM targets total debt of 2.755 to 3.0 times targetEBITDA, butas its credit agreement defines it, so leverage leaves less room for another large acquisition. Most of the debt came from theWM borrowed about $75.2 billion to pay for the Stericycle purchase in November 2024. Total debt was $16.2 billion at the end of 2023. At June 30, 2026, debt was $17.5 billion of US senior notes at an average rate of 4.27%, due through 2054, and $0.8 billion of Canadian notes. WM redeemed $0.35 billion of these Canadian notes in July 2026. It also included $2.8 billion of tax-exempt bonds, $1.3 billion of finance leases and other debt, and $1.1 billion of commercial paper. The amount due within 12 months includes debt that must be repriced. This is mostly $2.0 billion of tax-exempt bonds whose interest periods end, and commercial paper that WM rolls over. The undrawn credit is the unused capacity of a $3.5 billion revolving credit line. The leverage ratio uses the $8.15 to $8.25 billion of adjusted operating EBITDA that WM expects for 2026. The ratings are from the October 2024 note issue. InterestNet interest expense was $458 million in the first half of 2026. WM also owes $3.6 billion to close and monitor landfills and to clean up sites. This long-term cost does not show as debt. WM guides 2026 free cash flow at $3.75 to $3.85 billion, so it can pay its $3.78 per share dividend and keep buying back stock.
As of 2026-06-30.
- Checkpoints
- Oct 27, 2026: Q3 2026 earnings: Healthcare Solutions volumesrevenue and synergies. Pending. Watch: Stable Healthcare Solutions volumesrevenue growth, synergies on plantrack and EBITDA guidance of $8.15 to $8.25 billion kept pass; another revenue cut or lower EBITDA guidance fails.
Jan 4, 2027: John Morris becomes CEO. Pending. Watch: A smooth handover with no change to strategy or financial targets passes; senior departures or a strategy reset fails.
Jan 2027 (estimate): Full-year 2026 results and 2027 guidance. Pending. Watch: 2026 free cash flow of $3.75 to $3.85 billion and 2027 guidance for EBITDA growth with the full Stericycle synergies on track for more than $300 million by the end of 2027 pass; a miss or weak 2027 outlook fails.
- Recent events
- 2026-08-26: Jim 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.
2026-07-28: WM 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 slightly, to $26.275-$26.475 billion, on lower volumesvolume expectations, including in WM Healthcare Solutions, but kept its EBITDA and free cash flow guidance unchanged. Healthcare Solutions revenue fell to $638 million from $646 million a year earlier.
2026-05-1213: WM namedpromoted 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.
2026-01-2928: WM reported Q4 and full-year 2025 results. Full-year revenue was $25.2 billion. Full-year adjusted operating EBITDA grew 1315.35% to $7.1758 billion, a 30.1% margin, its best-ever adjusted margin. Management guided 2026 revenue to $26.4425-$26.6625 billion and free cash flow to $3.75-$3.85 billion.
2025-12-15: WM's board approved a planned 14.5% increase in the 2026 dividend rate, to $3.78 per share per year, the 23rd straight year of increases, and a new $3 billion share buyback authorization, replacing that replaces the prior $1.5 billion program.
2025-11-01: David Reed became WM's Chief Financial Officer, succeeding Devina Rankin, who retiredleft after nearly 23 years at the company.