Waste Management · NYSE
Current Price
$230.31
Intrinsic Value
Use the calculator below to estimate
Run a full DCF analysis on Waste Management, Inc. with auto-filled fundamentals, adjustable assumptions, and sensitivity heatmap.
Open DCF Calculator for WMWaste Management, Inc., through its subsidiaries, provides waste management environmental services to residential, commercial, industrial, and municipal customers in North America. It offers collection services, including picking up and transporting waste and recyclable materials from where it was generated to a transfer station, material recovery facility (MRF), or disposal site; and owns, develops, and operates landfill gas-to-energy facilities in the United States, as well as owns and operates transfer stations. As of December 31, 2021, the company owned or operated 255 solid waste landfills; 5 secure hazardous waste landfills; 96 MRFs; and 340 transfer stations. It also provides materials processing and commodities recycling services; recycling brokerage services, such as managing the marketing of recyclable materials for third parties; and other strategic business solutions. In addition, the company offers construction and remediation services; services related with the disposal of fly ash, and residue generated from the combustion of coal and other fuel stocks; in-plant services comprising full-service waste management solutions and consulting services; and specialized disposal services for oil and gas exploration and production operations. The company was formerly known as USA Waste Services, Inc. and changed its name to Waste Management, Inc. in 1998. Waste Management, Inc. was incorporated in 1987 and is headquartered in Houston, Texas.
ROIC (TTM)
9.0%
ROE (TTM)
28.9%
FCF Yield
3.54%
Based on trailing twelve-month data, WM shows a free cash flow per share of N/A and a ROIC of 9.0%, key inputs for stock valuation using the DCF method. The P/FCF ratio of N/A and FCF yield of 3.54% are important context metrics when evaluating WM's stock valuation relative to peers.
The intrinsic value of WM depends on assumptions about future growth rate, discount rate (WACC), and terminal value. A DCF model discounts projected free cash flows back to present value — small changes in WACC can shift the estimate by 20% or more, which is why sensitivity analysis is essential.
Whether WM is undervalued depends on comparing the DCF-derived intrinsic value to the current market price of $230.31. A positive margin of safety (intrinsic value above market price) suggests potential undervaluation, but the degree of confidence depends on the reliability of your growth and discount rate assumptions.
To perform a DCF valuation on Waste Management, Inc.: (1) Start with the trailing free cash flow per share as the base, (2) project future FCF growth over 5-10 years based on Waste Management industry trends and company fundamentals, (3) apply a discount rate (WACC) reflecting WM's risk profile, and (4) add a terminal value for cash flows beyond the projection period.
DCF (Discounted Cash Flow) estimates what a company is worth today based on its future cash generation. For Waste Management, Inc., this means projecting how much free cash flow the Waste Management will produce over the next 5-10 years, then discounting those amounts to today's dollars. WM's ROIC of 9.0% shows moderate capital returns.
WACC (Weighted Average Cost of Capital) is the discount rate in a DCF model — it reflects the minimum return investors require. For WM, the capital structure and equity risk premium determine WACC. A 1% increase in WACC typically reduces the intrinsic value by 10-15%.
